Tuesday, June 2, 2009

The government ownership of a majority of General Motors raises new questions about capitalism, politics and the economy.

Ira Milstein, a senior partner at GM's bankruptcy law firm, says it's uncharted territory.

Milstein says there's no book of instructions on how to run a government-owned private company.

Washington says it will stay out of day-to-day auto decisions. But bankruptcy lawyer Jerry Reisman, who's not involved in the case, wonders what happens if management wants to buy parts overseas. Reisman says that could put GM's board in conflict with its government owners.

GM's CEO Fritz Henderson says federal ownership will last, in his words, "years not months."

But he predicts GM will rocket through the bankruptcy process.