The Big Three are testifying this week before Congress to get their hands on part of the big $700 billion bailout passed in October.  The testimony comes on the tail of thorough ridicule following their last trip with tin can in hand and on the heels of an unprecedented drop in sales.  Ford says they may be able to ride out the storm.  Chrysler is working with investors to find an acquisition partner.  All stand to benefit greatly from the $25-30 billion government bridge loan they are asking for, but of the Big Three GM has the most to lose if Congress says no.

The largest of the three, GM is closest to the brink of insolvency and by some reports may not have enough cash in hand to make it to the end of the year.  Analysts put the loss to the economy at 2.5 million jobs nationwide should GM kick the bucket.   GM Chairman and CEO Rick Wagoner suggests they are victims of the credit crunch along with the financial industry.  Vocal opponent to a Motown bailout Sen. Dick Shelby (R-GA) declares General Motors is in an unstoppable death spiral as a result their own poor management and antiquated business practices.

This week Congress may not be able to stop their final demise, but they are in a position to throw it a lifeline for 2009.  Is GM fit to survive in the 21st century?  A pair of perspectives from our gonzo crew.

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Hala V. Furst

It would be easy to let General Motors die. It would be easier than easy. It would take an absence of action, and nothing else. It would teach companies, especially automakers, to be more competitive, to shift with the market, to force the consumer to buy something other than giant oil tanker cars.

But the thing is, Detroit is a company town, and General Motors, Ford, all of them, are companies full of company men, and women. If we let GM die, it wouldn’t just be the end of the company and the executives, who would somehow, because they always do, land on their feet. We would be letting hundreds of thousands of men and women die. And I don’t mean figuratively. I mean, we would be resigning thousands of elderly men and women, who are relying on their pensions, to death in poverty, on a scale not seen since the Great Depression, at a time when Social Security is anything but secure.

I don’t mean to seem all doom and gloom, but this isn’t about just the death of one corporation, the refusal of one more corporate bailout. It is the final death rattle of a way of life in America. It has been on the decline for decades, but with the demise of GM, it will finally be down for the count. I’m talking about the era where men and women pledged their lives to a company, to a cause, and the company took care of them. Where a person could work themselves into old age, safe in the knowledge that the company pension would be there when they finally, at long last, sat down.

I know the pensions are often one of the reasons that these companies go under, in the same way that the Social Security fund I pay into cannot support my parent’s generation. And maybe the pensions shouldn’t have been promised starting in the 70’s or 80’s. But we are a nation that requires cataclysmic change. It seems we don’t really pay attention to much else. So until the machinery comes to a screeching, gut-wrenching, heart-stopping halt, we may not be willing to recognize that a new day is dawning.

So the real question is, are we ready to see bread lines full of grandparents? If not, we may want to consider bailing out GM. Not the company, let that die. But at least the workers.

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Rob Spectre

Creative destruction is the economic principle many Republicans assert is governing the demise of General Motors.  The company became too large to be effectively controlled and too deaf to market demands.  Yoked by excessive union agreements and irrecoverably far behind the technology curve, they say this is the kind of free market correction that is entirely painful but also entirely necessary.

A hunger for domestic automobile production isn’t going to disappear in this or any economic crisis, they argue.  A new, leaner supplier of that demand will emerge with greater product savvy and less rigid bureaucracy.  So long as Americans want to buy American, they say, a free market will satisfy the need.

As has been the case in the past quarter century of Republican politics, the GOP leadership is hopelessly myopic on this issue.  First, a 41% drop in sales is not a natural economic phenomenon – it’s a flight off a fucking cliff with paper wings.  Were this a market correction based solely on the Big Three’s adequacy in connecting supply with demand at a profit, the slope would be more spiral than slippery slope.

Second, I don’t know how Congressional Republicans can speak with any authority on how an economy they ailed should or shouldn’t be handled.  They were carrying the handbasket that got us into this mess and it was largely their misguided interpretation of laissez-faire that got us where we currently are.  GLBA has three big R’s beside it and a substantial 41% drop can be attributed to the credit freeze it generated.  Every time Richard Shelby talks about the objective course of economics, I wonder how a guy who collected a cool mil a year from an insurance company while killing new regulations as the Senate Chair on Banking, Housing, And Urban Affairs can keep his face straight while arguing for the unfettered, indiscriminate hand of the free market.

Finally, the Big Three – General Motors in particular – is not another paper-swapping investment bank.  It represents manufacturing infrastructure that is critical to our national security.  The cost of entry into this market is so high, it may be well beyond the reach of domestic investment to reach.  The only new American player in the space is the boutique green firm Tesla Motors, who have already dumped $186 million without a single product to show for it.

Losing GM means losing the kind of manufacturing capacity that made winning World War II possible which may be impossible to get back, certainly within our lifetimes.  With the growing economic power of China, the resurgence of Russia, and the instability we’ve sown in the Middle East, the ability to ramp up a large scale manufacturing effort is crucial.  Mothballing any one of the Big Three would mean reaching full tilt WWII type production would take years instead of months.  We don’t live in a world where America can operate with that kind of delay.  Keeping Motown alive in some capacity is not an economic issue, not a social issue, not even a moral issue.

Bailing out General Motors is not defending a dying American way.  It is defending America.

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