I would even if the Obamas hadn’t named him after Bo Schembechler. However, back to reality. Nobody can wallow in depressing news all the time. But ignoring approaching difficulty is about as smart as putting off a mammogram.
So let me be blunt. If we assume the best-case rational scenario about the future of the auto industry, the entire Midwest is going to be in for some severe and pretty rapid economic downsizing.
And we need to start thinking about how to cope with it. Here’s what‘s going to happen. By the end of this month, we will know whether Chrysler is able to pull off a merger with Fiat that the government has virtually ordered them to make happen.
If they do, Chrysler will continue to exist, for awhile. But some models and plants are certain to be phased out, if only gradually. Some say Fiat is mainly interested in the dealer network, and that over time, Chrysler, and Chrysler jobs, will mostly fade away. On the other hand, Fiat could give Chrysler a new lease on life. But if the deal falls apart, Chrysler will have to declare bankruptcy.
That will not be pretty. The company may be broken into chunks, some of which would cease to exist. And while somebody will keep making Jeeps, there is no guarantee they will make them in Toledo. But while Chrysler has a shot at avoiding bankruptcy, at least for now, the much larger General Motors has a much smaller chance.
On June 1st, or maybe a little before, odds are that GM will declare bankruptcy. The Treasury Department is telling them to get ready for what they call a fast, “surgical” bankruptcy.
That doesn't mean that General Motors will go out of business. It won‘t. I would bet there will be a GM twenty years from now. But it will be a much leaner, meaner and smaller GM.
As the Chicago Tribune noted Sunday, “even if both automakers survive, they will be smaller and pay lower wages and benefits. More communities will lose production and parts plants, and the states that have relied heavily on those manufacturing jobs, especially Michigan, Ohio and Indiana, will take a big hit.”
This will be a blow that will take years, or longer, to overcome. Millions of us are going to have less money.
We can wait for this to happen, or, as individuals, as communities and as a state, we can try to figure out what to do next, how to cushion the blow, and keep what auto jobs remain.
Then, we need to set about trying to attract the jobs of the future and preparing our kids to be ready to fill them. That may not be easy. But to my mind, it is a lot better than blaming someone else.
Or just running away.
Just a few months ago, it had been regarded as high treason for several southern-state Senators to have suggested that GM go through bankruptcy and reorganize. It had been widely, and inaccurately reported/presumed that those Senators actively wished GM to fail, for various made-up reasons such as the fact that transplant makers (VW, Toyota, BMW) had plants in those southern constituencies.
It was all a lie -- basically anti-Republican propaganda. Still, we all wintessed the spectacle of Governor Granholm, Senator Stabenow, and Rick Wagoner all solemnly swearing that "a bankrupt automaker cannot sell any cars, and won't survive." They had all been basically forced into those statements at dagger-points, by our friends at the UAW. A normal bankruptcy reporganization, under real law, would be a real kick in the pants for the UAW. As such, it was intolerable for the union, and for the union's political stooges. (Like Granholm, and Stabenow, and, for a while, the desperate Rick Wagoner.) Even if we do see some sort of hybrid government-backed pre-pack reorganization orchestrated for GM by the White House, it is likely to ignore usual legal checks and balances to placate the UAW.
All I ask is that as soon as the Democrats and Obama make any formal legal move toward a bankruptcy, whatever they decide to call it, they will simultaneously offer a written apology to Senators Shelby and Corker, who were right all along.
Posted by: Anonymous | April 13, 2009 at 02:58 PM
The auto industry in our state does not need to file bankruptcy nor should the UNIONS be indicteded and scapedgoated as the reason why our auto industry is in a meltdown..
We need to ackowledge that the end of the automobile is upon on us and the world and rather than engaged in endless attacks and wild speculation on how to save something that has a Darwin ending we should prepare right now for a new massive transit paradigm..
We can be the masters again of the people moving business..
Posted by: Thrasher | April 14, 2009 at 11:28 AM