GM is Dead! Long Live GM!

The news came down in Monday, June 1st, around 9 in the morning: GM, whose failure was about to be announced, and Citigroup, the huge bank bailed out by the state, were taken off the Dow Jones industrial index, which lists the top thirty companies on Wall Street. They were its pillars – such is the power of clichés – we were nearly going to write “unstoppable.” Until 2007, GM was the top car manufacturer in the world; Citi, the premier deposit bank. And here they are, from one day to the next, dropped from the holy of holies. Nationalized even.

Because no thing or person is unstoppable. The proof: GM in bankruptcy? It was considered unthinkable. Never say never… It is one of those other clichéd expressions that one thinks of as being representative of American character, the country where anything can happen.

All the same, GM is bankrupt… it’s difficult to swallow. Even with public support for an umpteenth wave of bailouts, we had time to prepare ourselves for this mentally. When the fatal outcome came, we were carried away at first by a torrent of emotions. However, what hits the country the most, in the country where ideology fights pragmatism, is the general “crisis management” mode. It’s kind of like a media-cized staging where the show must go on quickly… Now let’s get down to business.

First came an onslaught of grandiloquence. “The Fall of an American Giant,” said the New York Times. The Wall Street Journal announced “a new era” in automobiles.

On the right is Fox Business News, where the prosecution has continued since Barack Obama’s election in a vein that is somewhat hysterical and out of step. They talk about the “terror” being evoked by the “socialist push” in the heart of America.

MSNBC, the rival on the left, evokes the necessary “refounding” of American industry. Everyone judges the event incommensurable; nearly a wake. It’s a time of definitive phrases that will be quickly forgotten. The Wall Street Journal’s editorialist created the title “Obama Motors” which replaced General Motors. The president is accused of having brought back to life the old “industrial policy that even the French had long ago abandoned.” The French! That’s sinking low…

The chairman of the Republican National Committee, Michael Steele, railed against “another handout to the union cronies who helped bankroll his presidential campaign,” for you know who. Larry Klayman, president of Freedom Watch, a group with ultra-conservative leanings – that has been up to now obsessed solely with the Iranian threat – committed to “intervene to try to kill this ill-conceived Obama plan,” the fear of public investment, now and forever.

It’s also a time where we must not completely despair over automobile workers whose morals are at their lowest. The Detroit Free Press explains: “We’ve survived like this and we will succeed here,” and seemingly GM is receiving more assets than any other entity to do so. In a measure of support, the newspaper cites remarks from a Texas specialist of legal liquidations, John Penn, ex-president of the American Bankruptcy Institute. Go into bankruptcy and you will see: they will come out of it rejuvenated, slimmer, ready for new adventures.

It’s finally a time where we hear some essential or very prosaic questions. Those are: does the rescue of GM foreshadow a return to a willing public industrial policy in the United States? In the sale of Opel, has the American treasury shown an unexpected protectionist eye? In what measure will the restructuring of GM, with over 60 billion dollars of public funds, and its vast closure of factories, result in favor going to political elections over economic rationality?

As early as Monday in the Free Press, various representatives from Michigan (all Democrats) each explained why his district deserves more than the others, in order to be preserved from the blows to come.

In Lansing, the capital of Michigan, the “Car State,” it was only Monday that 500 participated in a march titled “Save Hope.” They heard Senator Debbie Stabenow tell them: “Times are tough, so are we.” In Livonia, where the closure of the GM factory took place some months ago, the mayor, Jack Kirskey, explained to his flock of 300: “This isn’t the time to cry but to go out there to find new companies that will bring jobs here.” They will either believe it or they won’t, and when they see Flint, they struggled when seeing the companies rush off. That didn’t prevent them from admiring the enthusiasm.

In capitalism, one ignores the charm of the bourgeoisie, a “do or die” capitalism, a disturbing authenticity, an inclusive brutality.

In short, it isn’t a question of dwelling on its exit for long. The obligatory ritual and the quakes that accompany misfortune quickly leave remaining the only question of interest (on the industrial plan, we agree that in human terms, that’s another affair). The question is: bankruptcy? Okay, but “is it going to work?” The Wall Street Journal posed the questions in the first paragraph of its article.