General Motors smashed up Editorial Comment is free The Guardian

27 Апр 2014 | Author: | Комментарии к записи General Motors smashed up Editorial Comment is free The Guardian отключены
General Motors EV1

General Motors: smashed up


As car crashes go, this one was a long time coming. General Motors may have waited till yesterday to throw in the towel and file for bankruptcy — but it was a move that had been trailed for weeks. And critics of the auto giant (and there are enough to fill several Cadillac showrooms) have been predicting its inglorious demise for years.

Demise is the right word, whatever the officials say. Barack Obama swore yesterday that Chapter 11 would give this iconic American company a chance to rise again; and, with a 60% stake in the 100-year-old firm, the US government has a big incentive to make it roadworthy again. But the GM that emerges from this episode will surely never revisit its heights as the world’s mightiest corporation.

The new normal, to use the American term, will be very different from the old. GM will be smaller, it will have fewer workers and showrooms, and it won’t make so many models. Oh, and it might finally make a serious push on electric cars — a decade after ditching its EV1 electric vehicle.

That last item would be very welcome, and others on the list are at least realistic in a world where the largest carmaker is Japanese rather than American. But they will nevertheless be a massive shock both for GM and for Michigan, Ohio and Indiana. Not only are those states heavily dependent on the auto industry, they all also helped Mr Obama build his majority — which means that whatever happens to GM could have a sizeable impact on his prospects for re-election. That link does not seem to have registered with the president, who has treated Detroit far more brusquely than Wall Street. He has appointed former investment gurus to plot out the future path for the car industry, for instance, even while reform of the US banking industry has remained largely an inside affair.

Given yesterday’s quasi-nationalisation of Detroit, the Obama administration will surely have to make more decisions on GM’s future; the big question is whether those decisions will have a political edge. Will GM be able to carry on making cars abroad while closing down plants in America? If so, Mr Obama will be risking electoral unpopularity.

But if not, he will struggle to justify his decision in purely commercial terms.

What has also been consigned to the past is the old model of mass production. As much as the Model T, mass production was made in Detroit. Indeed, Henry Ford wrote the Britannica entry on the subject. But producing large numbers of the same thing stopped working for Detroit as it concentrated on producing big gas-guzzlers that only sold in America during booms.

By the time of this crash, GM and the others were still in the game of mass production — but of increasingly niche vehicles.

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