GM in Obama's repair shop
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BARACK OBAMA, the nation's pragmatist-in-chief, would never have accepted the political risk of running
To head off the damage - both to the Midwest and to the nation's future as a leader in worldwide manufacturing - Obama had little choice but to become the major owner of a reorganized GM, and to push Chrysler into the arms of
The international business community would likely have condemned a hands-off stance by Washington toward GM's fall as harshly as it has judged the federal government's laissez-faire approach to Wall Street's wheeling and dealing before the recession. On the Richter scale of global economic seismic shocks, a GM collapse would have left Lehman Brothers' in the dust.
Still, polls show the US public has misgivings about this government intervention, much as it had about the bailout of Wall Street. As the "structured bankruptcy" of GM proceeds, Obama could face as much criticism from labor and its congressional supporters as from free-marketers. In one of the first steps in shaping the "new GM," Obama and the other governments with ownership stakes - Canada and the province of Ontario - will be signing off on the layoffs of 21,000 union workers and the shuttering of 12 to 20 factories.
Obama has made it clear that he wants the government's role in GM to be as brief as possible as it restores itself as a maker of "high-quality, safe, and fuel-efficient cars of tomorrow." He should not waver on that promise of fuel efficiency if GM executives seek to bend efficiency rules to supply a niche market for gas-guzzlers. If GM and other US automakers had not largely ceded the small-car market to the Japanese and Europeans over the past 30 years, they would not be in the plight they are in.
Obama said he hopes the sacrifices made now will ensure "all of our children can grow up in an America that still makes things." As modest as that aspiration seems, the past blunders of Detroit and other US industries have placed it at risk.
