Maybe French President Nicolas Sarkozy is right, and we really are reinventing capitalism. It sure feels that way when the topic is the fate of General Motors Corp., as it so often is these days.
Adding another voice to the hubbub of opinion Tuesday is former General Electric Co. chairman Jack Welch, in the BusinessWeek column he writes with wife Suzy. They call for a
bankruptcy restructuring for both GM and Chrysler, with the federal government as the debtor-in-possession lender. Then the two would merge, reap synergies, tear up contracts, purge marques and eventually emerge as a globally competitive company.
The Welch take is in line with an influential
column published Nov. 10 by Paul Ingrassia of The Wall Street Journal.
So is Andrew Ross Sorkin's DealBook column in Tuesday's New York Times.
Meanwhile GM CEO Rick Wagoner continues to work Washington in search of a loan with far fewer strings attached. Congressional Democrats are sympathetic. Republicans aren't. And President-elect Barack Obama wants a
Car Czar.
Elsewhere, the German government is looking into a
possible loan to GM's Opel subsidiary (and fretting that Detroit might be coveting a share). And Japan's finance minister says his government
wouldn't object to a GM bailout because of the economic damage that would be caused by a GM collapse. This, despite the fact that U.K. Prime Minister Gordon Brown has warned that a U.S. auto industry rescue could be protectionist in nature and lead to global trade frictions of the kind that made the Great Depression so awful. Wonder what the Indians and Chinese think?
Where all this leads is hard to say -- harder, indeed, than commentators on any side of the issue tend to acknowledge. Presumably America's trading partners would find a more radical restructuring of the U.S. auto industry more acceptable, since it would lead to cars being produced at market prices, rather than subsidized ones. But the reality is that they probably don't entirely know yet.
Reinventing capitalism turns out to be a lot like inventing it. There's no master drawing board. Come up with a plan, but be prepared to adjust it. Then take one step at a time and see what happens. -
Kenneth Klee
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Juergen Lasowski
And the winners are...
Today GM suffers a loss of about $2,000 per vehicle sold. On the other hand Toyota whose employees are not part of the UAW earns a profit of about $1,200 per vehicle sold. If GM was able to operate with labor prices near Toyota’s it would have pocketed an additional $29,715,200,000.
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