GM: To Be or Not To Be

Any casual follower of business news knows that GM is at death's door. This once proud beacon of American industrial might has been sucked dry by decades of management that bought labor peace through contracts that are utterly unsustainable in today's hypercompetitive market. GM has a labor cost structure designed to succeed only if the company regains its global might which will only happen if all other automobile manufacturers simultaneously agree to close their doors and let GM have the whole industry to itself.

As our new administration contemplates a "loan" to GM to keep it afloat (let's face it folks, it's really a gift, not a loan, because it isn't getting paid back. Ever.) may I offer a small bit of advice? The government is almost certainly going to give GM $25 billion and then not: fire management, or remove the Board, dislodge the UAW, rewrite obligations to retirees, or change any of the controllable forces that contributed to the mess. How about this instead: give the roughly 100,000 retirees who still receive benefits $100,000 each to waive, irrevocably, the financial obligation GM has to them. Fire management, shrink the brand lineup, remove the Board, require labor contracts be no more, or less, generous than GM's competitors and start over with a near exclusive focus on highly fuel efficient vehicles. But please, don't do what you're probably going to do: loan the money and change nothing.

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