Friday, March 13, 2009

The General Motors Cargo Cult

The current uncertainty over the future of General Motors hangs like a cloud over the Flint area. People are concerned about the impact a possible GM bankruptcy will have on the local economy, which to me seems somewhat like wondering about the environmental impact of pissing into a cesspool of raw sewage.
While I honestly hope GM can pull out of this having learned a valuable lesson about building quality innovative transportation products that people will actually want to buy and that values long-term planning over short-term profits, I must admit there’s a part of me that wonders whether the demise of GM wouldn’t actually be a blessing in disguise for this beleaguered city. I’ve been around long enough to remember not only the tail end of the glory days of this community, but also the beginning of the demise of the domestic auto industry and the reaction of the civic leaders to it. Basically, that reaction was “If only we [insert whatever you want here] then General Motors will return and everything will be okay!” If only we buy American. If only we increase tariffs on Japanese imports. If only we give GM tax cuts. If only the UAW wouldn’t demand such stupid things as a living wage and safer working conditions. I’ve heard it all. Repeatedly. For decades.
It began to sound like one of those South Pacific “cargo cults” where the native islanders try prayers, shrines and rituals in hopes the material wealth of cargo brought by US soldiers during World War II would return. We “civilized” people may scoff at the naivety of these Pacific natives, smug in the knowledge that the cargo ain’t coming back and that these islanders are wasting their time. Yet many in this community have acted exactly the same way with regard to General Motors. “If only we…”

General Motors isn’t coming back.

They wanted cheap labor while we wanted an honest wage for honest work. So they and many other formerly domestic manufacturers went elsewhere to build their products. These low-wage foreign workers, though, weren’t able to afford their products. And the American consumer, now faced with lower wages from service sector jobs but still having higher material expectations, had to use more credit to buy the products that used to be manufactured here. And eventually the amount they owed exceeded their ability to pay it back. They maxed out their credit cards, defaulted on their loans and the lending institutions that bankrolled it all started tanking.
I openly acknowledge the fact I am not a financial genius. I console myself, however, with the knowledge that – apparently – neither were the people on Wall Street. I do think, however, there are lessons to be learned from this debacle, First of all, we should forget about General Motors. It was a nice run and it was fun while it lasted, but if you’re waiting for their return to fuel this city’s future prosperity, you’ll be waiting a long, long time. The best hope for this city is entrepreneurship combined with long-term planning and (perish the thought!) an underlying ethic that not only values people over profits, but recognizes that taking care of people can LEAD to profits! To put it simply, if you pay your workers well, they can afford to buy your products. Money will change hands which in turn will lead the economy toward prosperity.
If you can, patronize a local start-up restaurant or small business. They’ll appreciate the business and you might be surprised by what they can offer. And if they become successful, hopefully they will learn from the past and value more than just the bottom line. Sure, I recognize that businesses have to make money and I’m all for them making a fair profit. But the days of the CEO’s making 9-figure salaries while their employees go without health benefits and are paid crap wages have got to end. (As an aside, many employers don’t think they should be directly responsible for the health care costs of their employees. Actually, I agree. I’m for socialized medicine. But that’s another rant for another time.)
I remember a line from the Michel Moore documentary “Sicko” where someone in France described the difference between Europe and the United States. “Here, the government is afraid of the people. In the US, the people are afraid of the government.” Sobering but true. While I don’t advocate violence in the streets, or ANY violence, for that matter, I do think people need to wake up and start raising a little more hell. We’ve been far too quiet for far too long.
We need to wake up to the fact that tribal dances won’t bring the Marines back to Polynesia and that “If only we…” won’t bring General Motors back to Flint. We need to rely on ourselves. We need to work together.
The future is unwritten. Let’s go out there and kick some ass!


  1. Wow, what great idea to save Flint. It's almost along the lines that I've been thinking about. Almost.

    My idea is that everyone should move out of Flint and then every remaining remnant of humanity (down to the last brick) should be buried beneath Yucca Mountain. Then trees should be planted in their place.

    Seriously, though. I think the City has to get beyond GM if it ever hopes to improve itself. I'd recommend sending this to the Journal, if anyone ever bothered to read it.

  2. If I ran the show in Flint, I would investigate what other cities like Pontiac and Ann Arbor have a hard time offering to companies looking for a new place to expand and funnel all money and energy into a strategy that would make Flint be an attractive option.

    Oh wait...Flint or the average company have any $$ to play with in the foreseeable future. Looks like Flint's best bet is to cut as many losses as it can (get as small as possible and be centered around the Universities) and start from there.

    Aaron Stengel