"What's good for General Motors is good for the country," a former president of the company said 50 years ago.
Today, that apparently means bankruptcy.
The government, and by extension all taxpayers, will wind up with a controlling interest in the company (60 percent of its stock). And in the long run, the move may save the company as it protects itself from its creditors and reorganizes.
The ripple effect is enormous, however. At least one major parts supplier has gone under already, costing thousands of jobs. GM will be cutting its workforce and already has cut some of its sales outlets, costing thousands of more jobs. The creditors who don't get paid, or get paid only a fraction of the dollars owed, also will be hurt badly.
And all this because of some truly stupid decisions made by corporate executives over the years, as well as unions that demanded pay scales so great the company simply couldn't remain profitable.
Furthermore, it places Obama and the Democratic Party that controls Congress in an uncomfortable position. Long known as the defenders of unions, the bankruptcy they will help orchestrate will hurt those unions enormously.
This reorganization will allow, among other things, the company to functionally break the union and bring benefits and pay scales down (from $45/hour) to levels that would give the company a chance to survive. But those employees who remain with the company, and see their wages go down significantly, will be badly hurt as well. Even survival sometimes has a terrible economic price at the human level.
In the long run, it may save what is left of the auto industry in the United States, which represents literally millions of both direct and indirect jobs.
But GM will become a poster child for the poor decisions "super corporations," both manufacturers and on Wall Street, have made in the name of greed over recent years.
Like it or not, it is going to trigger a wave of corporate oversight regulations that will probably be unprecedented in U.S. history, and it will be a long time before the pendulum begins to swing back to the middle, where it belongs, between no regulation, which got us into this mess, and over-regulation, which has its own well-known problems.
In the end, however, the change that is needed most is a new mindset among corporate leaders that profits must be part of an overall strategy that supports workers and stockholders, both, and that sound business practices must take precedent over the need for multi-millionaires to become billionaires. After all, you really can only spend so much on yourself. It's not a game to see who can collect the most vacation homes, yachts and private jets. Eventually, you have to start thinking about the people who work for you and the country as a whole.
-- Kelly Everitt