I had a dream recently, as I often do when I’m driving my car, about the fate of the automotive industry. In it, the government, played by Susan Sarandon, is driving in a car with General Motors, played by Geena Davis, toward the edge of a cliff. The two have pledged eternal commitment to one another, and they think that, by plunging to their deaths, they will prove a point. No one has any earthly idea what the point is, but it is a dramatic point nonetheless.
The dream prompted me to ask questions about the fate of GM. Is GM totaled? Should it be scrapped? Many high-profile politicians and business leaders I posed these questions to said, “Yes. Absolutely. I’ve answered your questions, now please release my daughter.”
But I disagree. GM is an American institution that is worth saving. True, there has been some mismanagement. “Buyer Beware” was perhaps not the best advertising slogan. It might have been a mistake to build a line of SUV’s targeted at the pre-teen demographic. GM should not have copied Japanese production methods so thoroughly that it put the steering column on the right side of its cars. But these missteps obscure GM’s great successes, successes that a post-bankruptcy GM can build upon. Did you know that GM engineers and scientists have built a machine that can burn fuel at nearly 100% efficiency? Imagine what GM could do if it put that machine to work on gasoline instead of money.
What this tells us is that GM is worthy of a bailout. Unlike one CEO whose name (John Thain) I won’t mention, the CEO of GM has not and will not spend the bailout money on lavish office furnishings. I have visited the office of GM’s CEO. Mind you, it is nicely appointed, with a leather interior, built-in satellite radio, and several large cupholders, but it is not extravagant. GM will spend our money wisely.
But whether GM is worthy of the bailout is irrelevant to the bailout’s main purpose. The main purpose of the bailout is to save jobs, jobs that are essential to the recovery of America’s manufacturing sector, jobs like Union Boss, Union Underboss, and Union Mafia Liaison. On top of the jobs saved, a rescued GM will create thousands of new jobs by dismantling its manufacturing infrastructure and building each car by hand, something the Japanese can’t claim. Japanese cars are unlovingly built by hyper-efficient, reliable, cost-effective, superior and potentially self-aware robots. But with GM’s ability to market its cars as hand-crafted, together with an attractive GMRP (Government Mandated Sticker Price) of $375,000 and “Buy American” legislation that makes not buying GM cars a federal crime, GM has a strong chance to keep pace with the Japanese for as many as six months before needing to beg for more money. At that point, GM will have to go to Plan B, which is to undertake a massive taxpayer-funded effort to buy Toyota Camrys in bulk and replace their hood ornaments with GM’s. To help market the re-branded cars, GM will build a plant—in America—to manufacture “Made in America” stickers, which the Camrys will bear proudly, together with a suboptical disclaimer that the phrase refers to the sticker itself, and does not necessarily imply anything about the rest of the car.
GM is not getting a “free ride” with the bailout, though. There are conditions. GM must transition from the “slow-track bankruptcy” it’s been on for the last thirty years to a “fast-track bankruptcy,” a restructuring plan modeled after the plot of “Weekend at Bernie’s,” a movie in which two naïve bunglers prop up a corpse and pretend it’s alive in order to stave off inevitable disaster, but a movie which nevertheless spawned a sequel. GM, too, will have a sequel.
It’s a little bit scary to think that, as part of the bankruptcy, the government will take a majority ownership interest in GM. Americans are used to the government confiscating property indirectly through the tax system, but for the government to take property directly is troubling to many. I am troubled too. I am skeptical of the government’s plan to build cars according to “traditional American values of fuel economy, safety, and Bolshevism.” But I also see the advantages. By being an extension of the government, GM will have constitutional authority to declare war not only on prices but on foreign competitors. It will be able to meet the threat of imports with continuing innovation and naval blockades. And don’t worry about the ability of the government to manage a company as well as the private sector. Congress will ensure the new GM’s ability to remain nimble in the marketplace. As of this moment Congress is setting up a Commission for the Nimbleness of Government-Owned Enterprises, which will review and score every management decision of the new GM leadership against soon-to-be-developed nimbleness benchmarks. Consistent with the urgency of the situation, the Commission could be up and running as early as 2014.
Critics say that it doesn’t matter what the government does, because none of it will change the fact that Americans have no desire or ability to buy more cars. But what about monster truck rallies? Don’t they need car husks to be crushed by the monster trucks? And don’t daredevils need dozens of cars to jump over, and clowns need cars to comically emerge from? These are huge pockets of demand that are currently going unmet. As if this demand weren’t enough, there is also latent demand in the traditional markets, especially for hybrid vehicles, a technology that GM is way out in front on. By 2010, GM will be rolling out its new line of hybrids, which, through a marvelous feat of electromechanical engineering, will draw power alternately from gasoline and pedaling.
I hope that the above paragraphs have convinced you that GM is worth saving, if not by their logic then by their obfuscation of the real issues. Thank you for reading this. Your daughter will now be released unharmed.
Photo courtesy Flickr / dave_7