Friday, May 15, 2009

Government And PR 

Here is a good reason why one doesn't want government in the auto business. GM is facing a PR nightmare should it import low-cost autos from China. The unions will pressure the White House, which will turn the screws on the CEO of GM. The company, however, needs to find a way to make a small car profitably, but given its overhead, it hasn't been able to do it in years. The unions don't want to give up any more in terms of wages and benefits, but in order to build small cars and make money, they will have to bend. Chapter 11 bankruptcy is looking inevitable for GM, if only to get out of the predicament the company is in. It will be sad if that happens, but a reminder that no company is safe -- ever. Only a few years ago, GM was the example of America's manufacturing might. The husk of a company that remains has potential but not the power.


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