The New GM

Published by at 11:25 am under Economics

The new GM could fit in the trunk of a Volkswagen

In the bizarro backward-land that is the North American auto-rescue world, the industry would be saved by chopping it into an itty-bitty, teenie-weenie fraction of what it once was.

Jobs would be saved by slashing jobs. Free enterprise would be protected by giving ownership to governments and unions. Public demand would be satisfied by offering fewer products, and specializing in models buyers want least. Parts suppliers would be assisted by reducing the capacity of their customers.

It’s a big rescue plan in which little is rescued. The industry that’s too important to die would employ fewer workers than Microsoft. If GM is essential to the U.S. economy, what’s that make Starbucks, which will have four times the employees?

At least 50% of GM would be owned by the U.S. government, another 39% by the United Auto Workers — if they’re willing to take it.

After a hundred years of demanding more and more from the employer, the union is being offered a major chunk of the company itself. Here, you think it’s so rich, you take it.

Chrysler would similarly give itself away — 55% to the UAW, 35% to the Italian carmaker, Fiat. At this rate the union that’s been trying to dictate to management for as long as anyone can remember would become the biggest beast on management row.

Only Ford (maybe) would be left with actual managers managing. Pattern bargaining would become one set of UAW negotiators confronting another group of UAW negotiators, calling one another varmints and thieves, both sides threatening to shut themselves down unless they agreed with themselves, and fast.

Barack Obama, the great left-wing president, would succeed in nationalizing what was once the country’s mightiest employer, but only to slash at it more fervently than any corporate fat cat ever dared.

He’s already fired one GM chief executive because he didn’t chop fast enough. GM once had 150 plants in operation; new CEO Fritz Henderson’s plan, worked out in close cooperation with Mr. Obama’s auto advisers, would leave it with 34. It would reduce its dealerships by half, and they would sell only four models – Chevys, Cadillacs, Buicks and GMC trucks. Chrysler would similarly cut back on its offerings and adapt some super-duper secret Italian technology from Fiat that would somehow spruce up sales figures.

Hands up everyone who’s ever owned a Fiat. Anyone?

Fiat specializes in minuscule little gas-sippers that are just great for the narrow streets winding through Italy’s scenic 2,000-year-old village squares but have had little success in North America, where no one buys them. But slap a Chrysler banner on them and they’re going to become popular, right? Because only super-popular companies like Chrysler are found teetering on the edge of bankruptcy.

If anything in this upside-down, inverse universe leaves room for optimism, it may be the sense that the industry and all its associated players have finally passed through the various stages of apathy, denial, rejection and anger, and landed somewhere in the vicinity of acceptance. Supposedly acceptance is essential to recovery. Ponder that, when you’re trying to pass a tractor-trailer in your Fiat-powered Cherokee.

By Kelly McParland

The national Post, April 28, 2009.