Democracy Soup

Making sense out of the world of politics

GM went bankrupt: So now what do we do about Detroit?

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Originally published on on Mon, 06/01/2009 – 1:27pm

The GM headquarters (right) loom large on the Detroit skyline literally and figuratively. If GM can’t bounce back, it may bring the Detroit area down with it.

So what do we do now about Detroit, General Motors, and the auto economy?

Yes, General Motors declared bankruptcy earlier this morning, throwing out yet more GM workers, endangering their pensions, and throwing a major sector of the U.S. economy into flux.

This isn’t just about GM. In today’s story below the radar, Chrysler won court approval to sell the majority of its assets to the Fiat-led group, this comes a month after the company filed for its own bankruptcy protection.

The old slogan “As GM Goes, So Goes the Nation” doesn’t literally apply, but this is serious business.

We’ve heard about the shareholders, the dealers, the banks, and even occasionally, the workers. But we hardly see anything about the companies that supplement the auto industry, such as the companies that make auto parts. What are we going to do about them?

The United States is a country that makes very few things, and cars are one of those things. Our economy can’t rise to the level of even where it was 30 years ago without the ability to make things.

Michael Moore, who knows a lot more about General Motors than most of us, suggests we use the auto plants to make bullet trains and light-rail trains. Moore notes that during WWII, “GM halted all car production and immediately used the assembly lines to build planes, tanks and machine guns.”

As wonderful as that idea is, what we see from the people in charge — at GM and in politics — is a lack of innovation about what GM can be or should be. If eliminating half of the company’s brands is going to be a significant highlight of the “new GM,” we are in deep trouble.

And even if GM somehow makes it back — and President Obama makes it clear that GM can be brought back from the brink of insolvency — in the short-term and long-term, there is a lot of collateral damage done to the people of Southeastern Michigan, Northwestern Ohio, and Southern Ontario in Canada. And there are plants outside this area that will be closed down as well.

This isn’t just about a bankruptcy of a company — this is about a region of the country that has very little prospects outside this industry. This isn’t to say we need to keep building cars that don’t meet the needs of consumers. But we need to build something. And that vision of what we need built has to be significant — requiring something beyond political capital.

Brian Deese is the person being tagged as the one who will dismantle GM and hopefully, possibly rebuild it. Along with the “car czar” Steven Rattner, this is the team that will guide the company in a new direction. There is a lot on their shoulders — not just an industry, but hundreds of thousands of people are at stake.

If we don’t do something about GM, Chrysler, and even Ford, which still isn’t in great shape, we need to do something for the people of this region. The best solution is to have them build something that can do us good — and they are already well-trained. Sadly, such a simple task somehow requires bold action in a political climate where timidity rules.

Photo by me, taken in May 2009


Written by democracysoup

June 1, 2009 at 1:27 pm

Posted in Uncategorized

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