In this town, Monday, June 1, 2009, will go down as the Detroit equivalent of Dec. 7, 1941, the date FDR said would "live in infamy." GM's slide into a New York bankruptcy court is the industrial equivalent, marking the final collapse of a post-war business model that united big, high-cost business with big, high-wage labor in a marriage that delivered unparalleled prosperity to the middle class.
Until it didn't.
This is an important point: Conventional wisdom in Detroit-centric auto circles is that someone else -- aggressive foreign competitors, disloyal American consumers, greedy executives, parasitic unions, a lazy news media, to name a few -- is to blame for the forced dismantling of Detroit.
Partly, but so much more: Acceptance that good enough cars and trucks were good enough, when the evidence and the market share trends suggested otherwise.
The belief that pay and benefits could only go one way -- up -- because they always had. A culture that spent more time looking at its past in the rearview mirror instead of tooling itself, and its children, for the future.
Very sad that GM failed. Sadder is that the Government Motors company is not going to rescue Detroit. More people will lose their jobs and their cushy benefits, more young people will leave Detroit.
President Obama claims he wants to get out quickly, but we know that once the government steps in, it takes a lot to get out. He claims he does not want to run GM, but he's already fired its CEO. The New York Times draws this parallel:
So, just as George Bush spent much of his presidency seeking a way out of Iraq, Mr. Obama may spend much of his seeking a way out of the morass of new government investments in the private sector. The hardest part will be knowing how to time the withdrawal of government support — a balancing act between maximizing the investment of taxpayers and risking the company’s fragile state.
Sounds about right.
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