Wednesday, February 11, 2009

General Motors gives up

For all the hand-wringing and teeth gnashing in the Bush and Obama administrations and in Congress over whether and how to help the nation's ailing automobile industry, the most important answer was missing because the question was not asked. Does the industry want to be bailed out? The corporate bigwigs at the major carmakers were happy to take the billions of dollars in loans the government forced on them, and even agreed to come up with plans showing how they expect to regain viability. But don't expect to see anything approaching realistic. It's too late for that. General Motors Corp., perhaps the greatest industrial dynamo the world has ever seen, has given up. The nation's largest automaker made that clear yesterday when it announced plans to lay off 10,000 workers, according to the Detroit Free Press. This follows months of cost-cutting and plant closures to try to stem years of losses. But don't be fooled. A company planning to develop a new fleet of technologically advanced, fuel-efficient and reasonably priced vehicles -- necessary to compete in the evolving domestic and world economies -- would not be laying off workers and seeking government protection. Yesterday's announcement said GM would cut 14 percent of its worldwide workforce and temporary reduce pay for a majority of white-collar employees in the U.S., the Free Press reported. GM actually plans to cut more than 31,000 jobs by 2012. "These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long term viability," the company said in yesterday's statement. CEO Rick Wagoner, in Washington to meet with congressional leaders, said GM's announcement was "indicative of the kind of things we need to do to get this viability plan in shape and respond to these tough market conditions.” But that only is necessary if GM plans to become an average company and accepts being in second place behind Toyota or in third or fourth place behind other forward-thinking automakers -- or if GM really plans to give the taxpayers' 13 billion dollars to its shareholders and seek bankruptcy protection.

No comments: