There used to be blue skies at General Motors…

There used to be blue skies at General Motors...

There used to be blue skies at General Motors…, photo by Derek Farr ( DetroitDerek ).

This photo is part of Derek’s great Detroit set of photos (slideshow). Derek writes:

A view out of General Motors World Headquarters, located in the Rencen Building in Downtown Detroit. There was a time that even thinking of General Motors running out of cash would be laughable … not anymore.

Indeed. This morning I’ve read editorials in the leading papers on both sides of the aisle that show a rising sentiment against the Detroit car companies. In Bailout to Nowhere in the New York Times, David Brooks suggests that it’s a bad idea to try and manage the economic jungle that claimed PanAm, ITT and Montgomery Ward and replaced them with Microsoft, Southwest Airlines and Target.

In the Wall Street Journal Robert Hahn and Peter Passell suggest that we should Stimulate Car Buyers, Not Car Makers:

Since a big fiscal-stimulus package for fighting the recession — some combination of tax cuts, extended unemployment compensation, infrastructure grants and assistance to states — is coming soon, why not stimulate consumers to buy cars? Why not offer eye-popping rebates — say, $3,000 — for a limited time to buyers of cars and light trucks? It would probably make sense to phase out rebates for the most expensive cars, and as a treaty obligation, it wouldn’t do to discriminate against foreign makes.

How much downstream benefit this would generate and for whom is hard to predict. Still, it is a fair bet that most of the money would be quickly recycled in the form of demand for everything from auto parts to car mechanics’ salaries — just what you want to happen in a recession.

What do you think? Are we watching the sunset of the Big Three … and will the sun rise for them and for the Michigan auto industry?

Ercy posted a link to GM Facts & Fiction. It’s by GM, but I think that GM has a part of the story to tell too. Found an interesting column in the Freep through their links by Susan Tompor titled Where’s the love? I never knew Detroit was a dirty word (please go read it). She makes a lot of great points including:

We’re watching one huge disconnect here.

We have the worst financial crisis that most of us have ever seen. Automakers sell big-ticket items that generally require financing. Michigan has been in a recession for years — not just a few months. We are on the edge. And somehow, still, no one here deserves any help.

General Wesley Clark suggests that aiding the American automobile industry is not only an economic imperative, but also a national security imperative in What’s Good for GM is Good for the Army.

7 thoughts on “There used to be blue skies at General Motors…


    It’s easy to demonize the American auto industry. It has behaved with the foresight of a crack addict for years. But even when people set their own houses on fire, we still dial 9-1-1, hoping to save lives, salvage what we can and protect the rest of the neighborhood.

    This whole matter needs some intensive thought. At the moment, Washington has tremendous leverage over the failing auto industry. The government should craft a rescue plan that is both tough and very, very smart. That means dragging the industry (kicking and screaming, no doubt) into the 21st century by insisting on ironclad commitments to design and develop vehicles that make sense economically and that serve the nation’s long-term energy security requirements.

    What I would like to see is creative thinking on both ends of the bargain. Let the smartest minds design a bailout that sparks a creative revolution in the industry. Think of it as project synergy.


  2. Mitt Romney says Let Detroit Go Bankrupt.

    Michigan Lt. Governor John Cherry responds:

    There are no human benefits to Mr. Romney’s you’re-on-your-own approach, only continued loss of jobs, homes and health care for millions of people.

    A bankruptcy in the auto industry will cripple our economy and worsen the human toll of our current economic challenges.

    Now is not the time for Mr. Romney or his supporters in Congress to advocate for experiments with intriguing financial techniques on some grand scale. It is time to work cooperatively on a solution that invests in security for American workers and in our technological strength.


  3. God please let the sun shine on this beautiful state! Lodged between huge auto vices … with one hand wishing to shake ‘The Big Three’ for allowing ‘lowest price to win’, sending work both overseas and Mexico forcing not only our family business but many suppliers to tumble and downsize. Then with the other hand, shake elected law-makers (were they napping during this crisis) to understand how the tread of auto/truck/suv/ tires ride across the entire country … the rythmic heartbeat of America!


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