And that’s the best news the auto industry, and the state of Michigan, has had in a long time.
Here’s what I mean. If you have cancer, you can’t possibly get better until you admit you are sick. Ford, General Motors and Chrysler have been in bad shape for a long time.
We all knew this, but didn’t face up to it.
A few years ago, I asked an auto writer how GM could go on losing billions, year after year, without eventually running out of money. I was told I didn’t understand the economics of the industry, and that a lot of this was really paper losses and tax write-offs.
We all - the government, the media, all of us - took assertions like that at face value. What we should have remembered was what Mrs. Smith taught me in the second grade.
Which was that ten minus ten equals zero. Except the auto industry passed zero a long time ago, and got down into the minus numbers. Now, at least, they are starting over, after a whole lot of stress, trauma, and white collar and blue collar blood on the floor.
And here’s why there is reason for hope. First, take the one automaker not in bankruptcy, Ford Motor Company. Three years ago, they were the first to think outside the box. They hired a executive from an entirely different culture to shake things up.
Today, though hit by the recession, Ford is not in receivership. It has a bunch of new exciting cars. It may soon be the number one domestic automaker for the first time since the 1920s.
Chrysler had been essentially given up for dead six months ago. But with a big assist from the federal government, it has now merged with Fiat, which may actually be a good fit. Of course, we won’t know for sometime how well this will really work.
But they have a shot, and they are still alive. General Motors remains the big question mark. For decades, this has been a poorly run, provincial and arrogant institution.
GM resisted effort after effort by outsiders to change it. Ross Perot failed. John Smale ultimately failed. The smug men who drove this company into the ground thought GM was just too big to fail.
Well, they were wrong. Now, their GM has been destroyed, and that may just save this company. The U.S. taxpayers own them now, and the new board is bringing in a tough turnaround specialist.
Edward Whitacre, GM’s new post-bankruptcy chair, sounds like just the man to exterminate any last complacent thinking. Gerry Meyers, the last chair of the former American Motors Corporation, said “He is blunt, but he’s so often right that you accept the abuse.“
Rough days lie ahead. But think of this. Five years ago, our auto industry was headed to the museum. Now, the cries of pain you hear just might be those of something healthy struggling to be born.
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Posted by: David | June 20, 2009 at 01:18 PM