General Motors Files for Bankruptcy, Marking the end of an Era

On Monday, June 1, 2009, the long-anticipated moment finally came. General Motors CEO Fritz Henderson announced that the former giant automaker had declared bankruptcy and filed for Chapter 11 protection in New York. General Motors is the fourth largest bankruptcy to date after Lehman Brothers, Washington Mutual and WorldCom – all of which happened in a mere eight years. Neither one of the other automakers, Chrysler or Ford, has come close. While the move had been long in coming, there is still shock, anger and denial in some corners of Detroit and the rest of the Auto World.  After all, it was still profitable as recently as 2004. Shareholders are angry because of the lost profits; many dispossessed workers are still in shock, as they tread on the unfamiliar world of post-Industrial revolution labor.  For most of us, we are still in denial about the whole thing.

General Motors is now the ward of a reluctant government. President Obama said that he expected the Draconian restructuring to be done quickly, and GM to be in and out of bankruptcy as soon as possible, following Chrysler’s lead. There was a sense of aloofness about his remarks, as well as the rest of Washington’s attitude towards the whole matter. Though it’s not as if lawmakers wanted GM to fail. Only that they had enough of hearing about the troubled automaker’s woes… and why should they care.

Why, indeed? Of course, it’s terrible when several hundreds of thousands of jobs are lost. However, that card has been long overplayed by Detroit executives. So what? Most of the states in the Union have already been hammered by the recession, sliding into the economic abyss, with several millions filing for unemployment (including this writer). California’s unemployment numbers trumps Michigan’s – about six million to 600,000, not that this is some beauty contest.  The bigger deal was that GM and Chrysler stopped being relevant the moment  people started buying less of the American brand names and turned to inexpensive, high-quality, socially-conscious alternatives.  Laid-off autoworkers and former execs expressed bitterness about the rest of America not caring, that there was more money pumped in the Big Banks, raising the whole “Us versus Them” mentality, and that the banks in Wall Street hogged most of the bailout money. Please. I suggest they take a look at how the rest of us poor non-union sods are dealing with misery right now.

For all the hackles raised by GM and its apologists, the US has been humoring big American car companies for a very long time.  No one can really argue that GM or Chrysler didn’t get any breaks from George W. Bush and his cronies, when Republicans were at the height of their power. When we first saw oil tighten up and gas prices break the $2 cap, that should have been an opportunity for GM and the rest of the Big Three to quietly prepare for an inevitable future. Instead, former CEO Rick Wagoner and Chairman Jack Smith decided to stick to the short-term profits that SUV’s and trucks provided for the company. Ford, by contrast, had begun experimenting, eventually producing the Ford Escape hybrid vehicles. Incidentally, Ford has remained relatively unscathed from the whole ordeal, even going so far as to declare itself sufficiently solvent (with only $14.6 billion in losses) and refusing any aid from the government.


That’s why all this crying gets nowhere with us. While the Heartland bemoans the loss of a giant, it’s time for them  to seriously get their heads out of their asses. Times are tough, oil isn’t cheap and gas is still expensive. No one can indulge in muscle cars and big trucks as much as they have in the past, if at all. If Detroit wants us to empathize with them – they should also see how the rest of the nation feels, too. We’ve got our needs, too.  Jobs are important, but if the product made is something totally irrelevant to our own problems, if it burns holes in our wallet – why should we bail you out? On that sore note, Jobs – We all need those, too. And money, to be able to afford to pay for your products. If, like Ford – and other companies such as Honda and Toyota – you wake up to Us – the Consumers – and our concerns, then perhaps we’ll have more of a talking point, even before you need to go to Washington to ask for bailout funds again.

A Giant has fallen. That is not such a bad thing, if the government guides the new General Motors to the path it should have taken all along: Becoming a smaller, more streamlined, more competitive and speedier entity, creating vehicles and equipment that best serves it customers, without costing them so much in gas or energy. That also takes the current administration and Congress one step closer to fulfilling its benign environmental agenda, and ensuring the rest of the industrial world follows the way.

It does well for us to remember a little of physics: The bigger they are, the harder they fall. We as Americans don’t need any more giants. We have been under their power for much too long, equating machismo with big-name brands. Now, times are tough and in this kind, big doesn’t cut it anymore. We need more organizations that people can respect and trust to do the right thing. Instead of glorifying “Generals”  as we have in the past, we should honor our “Privates” and “Majors.” Instead of relying on a big name brand for our identity, we should continue to be independent and multilateral, diverse in our approach to our economy, as we always have been in America. A giant has fallen. Now, more heroes can come to the fore and take the lead, in the right direction this time.

Here are a few related links for further reading:

GM Bankruptcy: What You Need to Know

GM in Obama’s Repair Shop

GM, China Tentatively Agree on Hummer Sale

Copyright Anabasius 2009


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