Not too long ago most Americans accepted the adage that what is good for General Motors is good for the nation. That symbolic concept of U.S. industrial might certainly has slipped dramatically over the last four decades, but at this moment it just may be truer than ever.
For those of us of a certain age, the possible demise of the nation’s auto building giant and its remaining competitors in Detroit, Ford and Chrysler, is inconceivable. The loss of national pride alone is almost as devastating as the impact on jobs, GDP, taxes and personal income and those figures are enormous.
American entrepreneurship and ingenuity so long admired around the globe would lose what credibility it has left. No longer would we be the geniuses of industrial development as evidenced by our remaining brands still represented on the world’s highways.
Americans would still be employed to build cars here in plants owned by foreign companies. But making Toyotas, Nissans or Mercedes, as good as these cars are, has far fewer economic benefits or personal satisfaction. It just doesn’t feel the same as producing those wonderful American contraptions that for generations were the stuff dreams were made of.
Even as kids of the Depression and World War II, we argued endlessly on school buses and at recess about the merits of each new model and whether one could get off the starting block quicker than another.
A generation later country boys in revved-up, stripped-down models called stock cars, once used for delivering moonshine, turned their dreams into a popular and successful new racing spectacle called NASCAR. Somehow a Toyota version seems like a final capitulation to another culture.
The crisis has been increasing steadily through years of bad management, antiquated business models, foreign competition, overindulgence of labor demands, lack of quality control and the ups and downs of the cost of fossil fuels. Now the combined credit crunch and the panicked tightening of consumers’ pocketbooks and the huge costs of health and pension plans are threatening to finally crack the engine block once and for all.
Should we let it happen? Actually, how can we let it happen? The fiscal impact of that would be enormous. Some 2.5 million jobs lost, bankruptcies of suppliers overwhelming. Another $125 billion loss in personal wealth and billions on billions more in tax revenue. Should we not include the automakers in the $700 billion bailout? That’s the question coming to a showdown on Capitol Hill - the last big fight between President Bush and the Democrats.
President-elect Barack Obama seems to have made up his mind that we can’t stand by and do nothing. So if Mr. Bush means what he says about making this a smooth transition, he will go along with that plan despite what his current advisers say. After all, it is a difference of only a few weeks before Mr. Obama makes it happen.
But GM is hemorrhaging so much cash it may not last until Inauguration Day, Jan. 20. The company itself says bankruptcy would be unacceptable, ultimately sounding its death knell. Who would want to buy a car made by a company that is in bankruptcy and may not be around to service it? Yet a number of airlines have maintained their flight schedules during bankruptcy and emerged successfully in the end.
Chrysler, under the brilliant Lee Iacocca, not only stayed alive by borrowing from the federal government but also paid back the money in record time. It was a lot less and the circumstances were somewhat different, but the principle was the same. Congress decided saving a car builder was in the national interest. On a much broader scale, it is even more so now.
There is no assurance the industry can survive in the long run even with our help. But how can we not try? Without the Cadillac, what do we use to measure the best of everything else?
Dan K. Thomasson is former editor of the Scripps Howard News Service.