I have gotten a lot of email on my posts about allowing GM to die. Here are a few thoughts:
- No matter what our mutual preferences, GM is not actually going to die. It will go in to chapter 11 and reorganize, and, as that law intends, will continue to operate through that reorganization. While Lehman and Enron liquidated, they were really special cases having more to do with financial than operating assets. In the last 20 years, Texaco, PG&E, Worldcom, Delta, and UAL have all passed through chapter 11, and all operated their businesses through bankruptcy. In fact, all of Enron's pipelines and other operating assets are running A-OK right now, just under new ownership. Do you remember all those news stories about massive natural gas shortages because Enron's pipelines all stopped operating when it declared bankruptcy? Yeah, neither did I.
- You are welcome to write me about how I suck because your job at GM (or retirement, or health care, or all of the above) is important to you if that helps you psychologically to manage a terrible and stressful time. But, to cause me to back off my opinion about GM and the bailout, you need to tell me why your job is more important than someone else's job. Because, unlike private enterprise, the government does not create wealth, but can only move it around (with a leaky bucket, at that). GM has wasted hundreds of billions of dollars of investment, so having the government invest money to save your job will likely cost >1 job somewhere else. Just because we don't, and may never know, who that specific person is does not make this an ethical choice.
- I too, all things being equal, value having a healthy auto industry in the US (which in fact we still have -- it just happens the headquarters of many of the companies that run the plants are over in Japan). However, if you wish to argue that the bailout is necessary to save a US auto industry, you in fact need to argue that the current set of managers/contracts/systems/performance measures/organization/etc. of GM are better able to manage the employees and assets of GM than a different owner with different managers and approaches. Because having GM fail does not make the assets or trained people disappear, it merely makes it more likely they will be managed by a different entity. So all a bailout does is save the GM entity that manages these assets and people.