Tuesday :: Apr 28, 2009

Sad, Dangerous Goodbye to General Motors

by paradox

In business graduate school sneering at GM by students and professors was a given, surely no major corporation has earned it so vividly, losing market share and watching their brand smashed in style and quality by Japan and Europe year after year, decade after decade. Watching, yes, but completely unable to do anything about it, GM Detroit management damn well knew cars, knew Americans didn’t want to buy “little shitboxes” of fuel efficiency and resolutely, astoundingly, refused to change, flipping the market Reaper off with childish obdurate denial.

Yet with the smashup and bankruptcy of GM finally here it feels terribly wrong, even if they asked for it so well—not only in their regressive, obtuse, obdurate management practices but in their massive responsibility for our climate and geo-resource problems. But despite all market logic and just retribution for obnoxious fools the breakup of GM should not be happening this year, certainly not in this manner.

Yes, even with all the intellectual contempt there’s a surprising nostalgia attached to the brand of GM at its death. I, like Marcy Wheeler, have cherished teen memories with GM cars, a time when the breakup of GM was simply unthinkable and the discovered joys of freedom and a back seat with no payment to meet yielded a special happiness in my life. Panging sentimentality resolutely put aside, however, two recent developments put in context the incorrect decision to see GM go bankrupt now.

With the country hurtling into a recession, cliff-diving into a potential Depression, this is no time to accelerate unemployment and business failure with the collapse of GM with whatever plan they come up with week to week. That’s right, complete failure, I have zero confidence in GM’s ability to recover from bankruptcy, summer shutdown and supplier problems.

There are critical and end-gaming psychological consumer issues with committing so much money to a bankrupt or just-bankrupt company, I’d personally never lay out the cash for a company in that status, and likely the American public never will, either. If GM shuts down for the summer as planned, what are all the small part suppliers supposed to do? They’re not getting any help and they’ll simply go under and vanish. How is GM supposed to “emerge” with no small part suppliers? These lofty, amazing pronouncements about how the future will just so neatly fit into plans of failure and bankruptcy, wow, I didn’t know a MBA produced that profound ability.

The context of bailing out lying, greedy, shortsighted, coercive crook Wall Street bankers is completely missing in the tough-guy market approach to GM (“tough love” is a loathsome misnomer, nothing--not one god damn atom of existence--of love is ever tough, the phrase almost always means rationalized abuse). Why in fact does Wall Street get hundreds of billions with very few strings with a few phone calls (not to mention more than a trillion dollars committed to various scurrilous schemes by the Fed), yet Detroit and Flint allowed to wither and die?

GM and the government don’t know the future for jack, of course not, what happens if GM never comes back, what if all this “emergence” is just some fantasy that launches us into a Depression? What happens if Wall Street bankers are still sitting pretty in that scenario, with a once-great American icon smashed at our feet?

The alternative is to enable yet another failing American industry, but given the choices of Depression and Hypocrisy enabling may be the only bitter choice. Right now the Obama administration has chosen stern market consequences in a market that doesn’t exist anymore, not the one we knew and learned all those years as GM earned our deep contempt. I hope they see and realize the fresh risks with that approach and just change it, simply explain that the risks of bankruptcy and summer shutdown cannot be taken, not this year with this economic environment.

I don’t see that happening, frankly, the administration will shy from the embarrassment of backtrack and inconsistency. It's difficult to get angry at them for it, either, given the completely impossible environment Bush dumped on them. Take a good, long look at the stock listing of GM (such as it is) and a local dealership with the opportunity still there, it’s April now and by June GM very well may be under forever, emergence just an impossible fantasy in a cratering economy, that once stalwart and implacable American icon of General Motors gone with the ravages of time and incompetence.

paradox :: 7:01 AM :: Comments (25) :: Digg It!