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As goes General Motors, so goes the nation

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POSTED June 3, 2009 2:34 a.m.
As much as I don’t like the idea of Uncle Sam nationalizing General Motors regardless for how short of a time period it might end up being, it is tough to argue against the move.

Much ado has been made about how President Obama is going to face a tight-rope playing to two of his core constituencies in terms of getting votes at election time – auto workers in the Rust Belt and environmentalists who believe the federal government isn’t aggressive enough in demanding higher fuel mileage and cleaner running vehicles.

Obama is also our commander in chief. We can ill-afford to lose the bulk of our vehicle production facilities and still be able to maintain a strong military.

That may sound a bit whacked but it wasn’t all that long ago that auto plants – due to their ability to build  vehicles – were retooled to meet the challenge imposed by World War II.

No one wants war but they aren’t going away. And unless someone thinks the next war we get into is going to be a nuclear confrontation, you’re still going to need things like vehicles whether they are Jeeps, Hummers, personnel carriers or tanks.

Looking at the nationalization of major production capacity as an infringement simply on the free market is the same myopic thinking that got us into the financial mess we’re in now. Remember, everyone thought it was going to be sunny forever. We were caught up in the euphoria of free money from housing appreciation, the high-tech frenzy, and good times that we never prepared for the inevitable down cycle. The same is true when it comes to war and peace.

We can ill afford not to think in the future when it comes to our military, national defense, and future wars. Since the beginning of time it is rare when several years pass without some type of armed conflict. It may be a sad commentary on the human race but it is reality.

Having said that, allowing General Motors to completely collapse and all of its plants being shuttered is a bigger threat to our security than it is to our economy.

Contrary to what is going on today, it is not government that powers the economy and provides us with financial might but the private sector.

What has gone wrong – terribly wrong – is the ascension of greed on the part of the business side of the equation and unrealistic expectation on the employee side. The old GM – pre-1990 where most of its troubles are deeply rooted – did fine as long as people bought their vehicles. It was much easier for those running the company to focus on big cars with big profits since America was rolling in money whether it had real value or not. A more prudent business model would have been concentrating on fewer options like the Japanese who had perhaps six variations per model as opposed to Detroit’s option combinations that often ran into the high hundreds per model. It wasn’t as much as accommodating the consumer as it was convincing them they needed to buy something that was better in the name of pumping up profit margins and balance sheets. Tried and true vehicles were deep-sixed such as the S-10 Blazer and Taurus – which was since reborn – because they weren’t making a big enough profit. Forget the fact people were still buying them and the minimal changes made them profitable. They just weren’t big buck profits.

At the same time, the unions wanted the world and they wanted it now. Call it overshooting the runway. Then again, management gave in because strikes were disrupting the free flow of truckloads of money.

No matter how right GM was getting “it” in the past few years from quality to mileage to performance to dependability and to styling they had so many self-inflicted wounds that it was just a matter of time before a draconian move was needed to convert General Motors into Government Motors.

Charles Wilson – the president of GM in 1953 – was definitely a prophet when he declared before Congress that “as General Motors goes, so goes the nation.”
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