When GM President Charles Wilson lightly said in 1953 (during his confirmation hearings for secretary of Defense) that "what was good for the country was good for GM, and vice versa," he synthesized a very big idea: GM and the U.S., each vast conglomerates, each general and united in their own ways, had undergone a de facto merger.
The final chapter of that merger plays out this week as GM weathers a reorganization that will leave the federal government owning 70% of the company. In the midst of the deepest recession since the 1930s, it's hard not to see GM's bankruptcy as a signal moment in a larger history. If mighty GM can fail, cannot also the United States? And the answer is, absolutely.
For The Record
Los Angeles Times Wednesday, June 03, 2009 Home Edition Main News Part A Page 4 National Desk 1 inches; 41 words Type of Material: Correction
GM history: A timeline on the history of General Motors and an accompanying photo caption in Monday's Section A said that Cadillac introduced the first car with air conditioning in 1953. The first car with air conditioning was a 1940-model Packard.
For The Record
Los Angeles Times Saturday, June 13, 2009 Home Edition Main News Part A Page 4 National Desk 1 inches; 37 words Type of Material: Correction
Vintage car photo: In the June 1 Section A, a photo caption that accompanied a column by Dan Neil about General Motors' history identified a car as a 1958 Cadillac Eldorado. The car's model year is 1957.
This is the lesson of GM's bankruptcy, and it has little to do with market share and miles per gallon. It's a rebuff of the notion of exceptionalism. Any organization that fails to sufficiently safeguard its means of self-correction and reform, that forsakes long-term investment for short-term gain, that piles up debt year after year, will eventually fail, no matter how grand its history or noble its purpose. If you don't feel the tingle of national mortality in all this, you're not paying attention.
Many will step forward this week to recite the familiar litany of complaints against GM: It treated its customers poorly; it built boring and awful cars that alienated generations of buyers; it built binge-drinking dinosaurs and murdered the electric car. It bet the farm -- or at least southern Michigan -- on America's lust for big iron, trucks and SUVs, which left GM undefended when gas prices peaked at around $4 a gallon last year. Its executive leadership was myopic and insular, its board packed with thumb-twiddling cronies. If corporate mismanagement were a crime, you could lock up every one of these guys and throw the key in the Detroit River.
In his book "The Fifties," David Halberstam described what many regard as the moment of GM's original sin: In 1958, after a long-standing prohibition, it became permissible to discuss the company's stock price in management meetings.
From there, it was only a matter of time before the company twisted in Wall Street's wind and strategic decisions were calibrated according to dividend pennies.
I have my own theory. In 1999-2000, GM had a golden opportunity to right its ship by backing Democratic presidential candidate Al Gore. This might seem counter-intuitive, at least, since the auto industry has long postured against Democratic candidates as being pro-regulation and anti-business. Gore himself is an avowed enemy of the internal-combustion engine.
