Wednesday, June 10, 2009

Goodbye, General Motors

Goodbye, General Motors
By Jerome Grossman

For decades I was loyal consumer of General Motors products. It all began when I graduated from high school and was accepted by Harvard College. My father, who had to leave school after the fifth grade to help support his family, was so proud that he insisted on buying me a tiny Pontiac, “A Harvard man should have a car." I was 16 years old.

The Pontiac had an unusual history. It had been totaled in a crash and then a friend of my father rebuilt it from scratch, painted it startling bright silver with red wheels. The tiny convertible with the exposed rumble seat made me a very popular Harvard freshman.

It also made me a loyal "Buy American" consumer supporting U.S. businesses and the workers of Detroit by purchasing GM products year after year. However, years later, my wife returned from her bridge game with a message, "My friends love the Lexus; why don't we try it."

My answer was a resounding negative: “We must support the American worker and buy American.” But the bridge friends had an answer: "Does your husband know that many American cars are assembled in Mexico, Canada, South Korea and China, where the work is done for two dollars an hour instead of 20?" So I bought my first Lexus in 2001. I still have that automobile and it is a dream, a loyal and healthy horse that seems to go on forever.

Now GM is in bankruptcy, rescued temporarily by the U.S. government. My feelings of guilt for deserting were assuaged when I learned that low wage countries will manufacture at least 25% of GM output under the rescue plan.

While the U.S. government will be the majority stockholder and will supervise the restructuring plan, President Barack Obama says that he does not want to run the company and that it should be operated on classic business principles.

I believe President Obama but some Republicans and conservatives warn of political interference in operations. They may be right. Already Representative Barney Frank, my own Democratic congressman, has intervened with GM management to extend the life of a parts distribution center in his district that was scheduled to be closed. The political motivation is bipartisan. Republicans are just as likely to protect jobs in their districts: Republican Representative Steve La Tourette of Ohio wants congressional review of company and government decisions on the automakers. In the U.S. Senate, Carl Levin of Michigan said he will do everything he can keep the GM plants there open, as will senators across the country.. Their political existence demands it.

Some think that the reduced GM will not survive for long, that the Administration is keeping it alive for political reasons and to keep the United Auto Workers functioning in election years 2010 and 2012. But the world has changed; too many unrectifiable mistakes have been made. General Motors, once the preeminent American company, may become as much of a relic as my silver Pontiac convertible with the startling red wheels


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