I have been thinking a lot about this issue. I can see the machinations of the auto lobby, union labor, and the Michigan congressional constituencies at work trying to fight for a huge bailout. We know that GM and its suppliers employ hundreds of thousands and provide healthcare for many more.
But GM has been a bad company for my entire life. They have been trending down forever and they do not run a company that can be globally competitive. I know management’s argument about the burdens of labor, the American healthcare system, and poor government collaboration. Ask yourself this: Do you believe General Motors will ever make a car that you actually want? Companies need to get better if they want help. I think the track record is clear that GM has not been able to right the ship over the past couple of decades.
Fred Wilson says bust up the company. Perhaps. I think bankruptcy might be a better process here. A managed restructuring will allow GM to restructure and shed all the absurd assets. The company has too many brands, too many cars and few of them are ready to deal with the long-term energy crisis we face. I know the idea of losing GM is very scary to those that have long fought for labor in this country. But this is a new administration that has asked for sacrifice. Would you rather see the country invest in new infrastructure or rescue the company and industry that has been unhealthy for a generation?