November 16, 2008
Vietnam, Marriage, Iraq, Afghanistan & GM — the common threads: your money and getting out.
Without debating what must by now be regarded by all as an irresolvable debate, the wisdom or folly of US involvement in the Vietnam War, at least 58,159* Americans perished (Not including the 3-4 million Vietnamese on both sides and the 1.5-2 million Cambodians and Laotians; not included only because their losses, as grievous and condemnable as they were, do not immediately serve my efforts to make this as personal as I can.) en route to teaching Americans lessons concerning entering military conflicts; lessons we obviously failed miserably to learn. The lessons, as with marriage, as with Iraq, and as with Afghanistan, and now, seems likely, with General Motors, it’s a whole lot easier getting in than it is getting out, and you better have an extraordinarily clear reason why you’re getting in, it better be damned important, and you had better have a defined exit strategy in place before you embark on the adventure.
Let’s think about GM for a few moments, because it’s important that each of us spend more than fleeting moments musing over an issue that will involve spending billions of our kid’s future, given that that’s who will get stuck with the tab.
As a native Detroiter and the son of a Ford designer, no one has expressed greater outrage than have I over the mismanagement of an industry; consistent, unrelenting mismanagement that’s been at least three decades long now, in their collective rearview mirrors. Suffice it to say I have neither a warm spot in my heart, nor a soft one in my brain, for the brain-dead way a great American industry has been driven off its wheels. That ought not, however, to send the American people to a collective knee-jerk response to the complicated dilemma facing each and every one of us: to bail, or not to bail; that is the question, but what are the probable reactions?
By the way, I don’t have a single one of the answers. Not even murky guesses. It’s all kind of like the time 13 or so years ago when I blew the C-5 and C-6 disks in my neck. Dr. Cornbleet told me I essentially had only two choices. The first was surgery. I asked him, rhetorically, that after enduring the pain of the surgery, the six months of recovery while wearing a neck collar . . . “I’d be guaranteed to be 100%, right?” He said, “Wrong, no guarantees.” “Well, then, what were the odds of success?” When Dr. Cornbleet said 50-50, I told him he could engage a contortionist’s sexual act on himself. I then asked what else he had.
Fortunately the physical therapy worked. But the point here is that no one can give a guarantee that any prescribed action, or the absence of one, will have the results hoped for. That does not, however, mean we are advised to just sit on our collective hands, or spend much time wringing them. The costs either way are incalculably extreme . . . for each and every one of us; not just including us, but especially for our kids.
According to Commerce Department figures, one in ten jobs in the United States is tied directly to the auto industry: Big 3 manufacturing and assembly; thousands upon thousands of small job shops provide the parts that go into every vehicle; retail auto dealerships, trucking and rail and Great Lakes and big river shipping get the raw materials to the plants and the assembled vehicles to the showrooms; giant regional and more local warehouses store the parts that the dealerships and retail auto parts stores order every day. The chain is virtually endless, and the chain is more than 20 million employees strong, or weak, depending on how you classify it.
Some have posited that, as the companies got themselves into this mess, and once the government begins down that slippery slope the slope itself becomes endless, “let ‘em go Bk. It’s how the free market system is supposed to work.”
I’m not philosophically opposed to that line of thinking. Nonetheless, as I’m spending time thinking, I need to think what a GM Chapter 11 bankruptcy would mean. First, making a tens of thousands of dollars purchase is not at all analogous to buying a computer. Buying a depreciating asset is not an investment, it’s a purchase the consumer thinks of in the long term. And that consumer will not sign anyone’s dotted line without a better than 50-50 bet the manufacturer will be there for the dealer whose going to back the deal; repair it with manufacture-quality parts when they’re needed.
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