GM’s bankruptcy marks the end of an era of second-best arrogance
By Jennifer Hadley 06/11/2009
When I logged onto Facebook last week, I saw my friend Chris had sent me a status update: “Can’t believe that GM has been dropped from the Dow. As a kid growing up and memorizing the Dow components, this is truly the end of an era.”
The first thing I thought was, “God, Chris, get a life.” That thought was then followed immediately by “Good riddance!”
It was just last December when I opined how insanely arrogant I found it that GM was adamantly refusing to consider filing for Chapter 11 bankruptcy protection (“The Other Big Three,” Dec. 4). And for six painful months I watched as one of America’s iconic companies (listed on the Dow Jones since 1925) literally groveled at the feet of our government, pleading for more and more money.
Acting out of desperation, it truly seemed as if GM was saying “Just another $ 15 billion and we’ll turn this around. Come on, we’re GM, cough up another $10 billion, you know we’re good for it” — all the while GM gave absolutely no indication that they had any viable plan for just how they’d use our loot to turn their disastrous situation around.
So it is with more than just a touch of smugness that I look at their June 1 Chapter 11 filing and think “Told you so.” While I don’t generally find self-righteousness a particularly attractive personality trait, in this case I’m cutting myself some slack. See, I don’t know the slightest thing about corporate America. And I certainly don’t know what it takes to run a global company. But even I could plainly see the writing on the wall here.
If a dingbat like me can see that bankruptcy for GM was only a matter of time, well for heaven’s sake; shouldn’t our government (or anyone with a little more “pull” than I have — Will Smith maybe) have been able to see it too? Perhaps they did, but figured prolonging the inevitable as we adapted to our new administration would be better for American morale. (Ironically though, with news of GM’s Chapter 11 filing, stocks surged 2 percent, marking new year-to-date highs for the Dow Jones, NASDAQ and S & P. So take from that what you will.)
Nonetheless, I grieve for those who are getting the short end of the stick in this filing. That includes the more than 650,000 people who will see their health insurance coverage reduced, the investors who will watch their $27 billion evanesce, and the tens — if not hundreds — of thousands of Americans who will soon find themselves unemployed. Finally, I grieve for US taxpayers, who have already dumped more than $19 billion into the company, only to find that we have to pony up another $30 billion to foot the bill for the bankruptcy reorganization.
The truth is we all lose and, in a sense, it is the end of an era. But romanticizing GM’s past, particularly the past several years, when we’ve watched it fall further and further behind Asian automakers in terms of affordability and technology isn’t healthy either. We need to acknowledge that GM flat-out failed. They failed just as WorldCom, Lehman Brothers and Washington Mutual failed before them. And there’s no doubt that more failures are sure to come.
Personally, far from lamenting the loss of an era in the American auto industry, I welcome in the new epoch. And I sincerely hope that those who will lead the auto industry into this new era will bear in mind that those who cannot remember the past are doomed to repeat it.
Contact Jennifer Hadley at email@example.com.