GM Commentary from the Right Wing

A Detroit News Column:

GM should define how its cutbacks will add to its value

Daniel Howes /

February 19, 2006

An old business adage holds that companies can't cut their way to prosperity. Nowhere is that more true today than at General Motors Corp., where a culture of cutbacks reigns with little countervailing force.

That's not good if Chairman Rick Wagoner and GM's directors expect their employees and the consuming public to rally behind a cause that is affecting their futures and will determine the future of the independent American-owned auto industry.

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When GM's financial engineering is over, its work force is reduced, its manufacturing empire is smaller, its dealer body is winnowed -- when all the "problems" are "solved" -- how will the new GM be different from the old one whose culture of bureaucratic denial, misreading its home market and complicity with labor brought GM to its current crossroads?

What, in short, is the vision for a "new" GM that will be as dynamic and competitive at home as it is in places like China, Poland, Russia and South Korea? A credible answer to that fair question is the positive side of the negative and long-running exercise shaking Michigan to its foundations and forcing the proud United Auto Workers to face compromises it probably never thought its members would be forced to contemplate.

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BrooklynDodger(s) was going along with this pretty good, until "complicity with labor." The Dodger(s) assume this complicity was giving hourly employees job security, decent retirement benefits and reasonable health care. How is that a problem? When the history of this period is written, the Dodger(s) hopes it will consider how treatment of the salaried employees wounded the companies.

The Dodger(s) think the problem was decades of disinvestment, in order to keep the cash flowing in order to keep the stock price up. The same as Ford and Chrysler. The strategy was to make only enough cars to meet the CAFE requirements, and sell luxury trucks [SUV's] which generated profit while isolating the companies into a segment of the market vulnerable to gas prices.

"Restructuring" is closing plants and shedding workers, reducing production capacity and, selling off assets.