By Staff
Just a short time ago, most people never would have imagined they’d see the day General Motors declared bankruptcy.
With everything that has happened to our economy in the past year or so — bank failures, mortgage-industry meltdown, stock-market nosedive — nothing really compares to this. They don’t call the behemoth Detroit-based company “General” for nothing.
But from our point of view, the forced temporary nationalization of the auto company will yield positive results — which couldn’t have come about any other way.
GM chairmen over the years have admitted their inability to alter the course of their massive ship. It was too big, too strangled by powerful unions and, ultimately, a bureaucratic nightmare.
Now it is forced to become lean and mean — as it should have been all along.
According to The Associated Press, GM expects the bankruptcy proceedings to last 60 to 90 days, and, if successful, the company will emerge with a smaller work force, fewer plants and fewer dealerships.
The plan, the AP explained, is for the federal government to assume 60 percent ownership in the company, the Canadian government 12.5 percent, United Auto Workers 17.5 percent and unsecured bondholders getting 10 percent.
GM follows the example of smaller rival Chrysler LLC, which filed for Chapter 11 protection April 30. The government’s partial stake in GM mirrors a significantly smaller ownership of Chrysler along with federal equity in banks, AIG insurance and two mortgage-industry giants.
With GM’s bankruptcy filing, the country’s worst economic crisis since the Great Depression has become even more surreal. That fixing the economic mess falls on the shoulders of a new president and his administration still dealing with wars on several fronts makes this darn near a perfect storm.
But there’s a potential silver lining to the storm: As with GM, Chrysler and other companies across the country, perhaps all of us will emerge from this frightening experience tougher, stronger and smarter.
And despite the continued swirl of isolated bad news, the economy seems to be slowly improving. So hang in there everyone, and we in the newspaper industry will do the same.