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Please begin with an informative title:

I grew up in Flint, Michigan.  I loved the place.  Even as it was accelerating into its smooth, steady slip toward oblivion, there was a lot that the place offered, and continues to offer.  The Cultural Center, built in the 1950s, was the other side of the cultural hegemony that the Big Three had already represented on a national level.  Today, it is one of the best endowed campuses in the state, with a planetarium, library, institutes of the arts and music, a museum, one childrens' theatre troupe and another that hosts touring productions.  Of course, that was all founded fifty years ago, and that's the last time GM brought unambiguously good fortune to Flint.

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In Flint, speculations and rumors make front page articles over whether a factory will close, when a plant will be built, when a couple dozen jobs will open up or get squeezed between the cracks.  Since almost my entire family worked for GM in some capacity or another, I've followed this closely and it didn't take long to see patterns emerge.  For all of the alleged liabilities of American operations, GM had many reasons to stay: an accomodating infrastructure, supporting industry, an already built network of factories, and a trained workforce.  And yet, they always made their staying as expensive as they possibly could.  When most of the autoworkers relocated to the suburbs, Flint itself, still dependent on the factories as the county's largest employer and its economic engine, shelled out millions annually in tax breaks and incentives for GM to stay, or even to merely slow its withdrawal.  All this was happening at a time of massive population loss, crumbling schools, spikes in crime, and so forth.  In the meantime, GM was expanding into new markets, and building vehicles in Mexico and elsewhere where a lack of regulation and an abundance of cheap labor offset other disadvantages.  The punchline is that these were different days for GM than today.  Whatever we may make of their product of the 1980s, their investment schemes had a high margin of profit, and business was very very good.

Now from an strictly economic argument, one could argue that GM was smart to pull out of Flint, or maybe not; maybe it should have left faster or maybe it should have remained entire.  What seems clear to me, however, is that the fleecing of Flint during the eighties was gratuitous.  The city seemingly got nothing out of their investment.  This could have been solicited by GM by a desire for profit, certainly, but the tax incentives did not encourage the corporation to remain; GM employees in Genesee County plunged from almost 80,000 in the late 70s to about 10,000 today.  Nor do I believe that the company could have divested itself more quickly; after all, those new workers had to be trained, facilities built, procedures split and consolidated.

We've seen all this before.  We saw it in the Wall Street bailout just two months ago.  Just because a bank or a company needs a bailout to survive, doesn't mean that they won't exploit funds to ends that are not mutually profitable.  Or, just taking a glance at the stock sharing adjustments and changes of the Roger Smith era, it doesn't mean that a corporation would even use a bailout to its own long-term benefit.  Corporations are forces of nature in a sense.  They don't always act rationally.  When they don't, we have to act rationally for them.

Bailout negotiations are basically negotiations at gunpoint, but how is it that the company facing extinction ends up holding the gun?  The Big Three's market share will presumably continute to dwindle in the near future, albeit hopefully at a slower rate, they'll close plants and hemmorage jobs, and if everyting goes perfectly, it will still be a long, long time before they can offer a fleet as well-adapted to the next global environment as those of their competitors.

This could be just like the Wall Street Bailout all over-again, and we're catching some upshot of that after just two months.

Let's learn a lesson from this very recent history and not be handing out blank checks.

Let's encourage our representatives to cautiously support a bailout for the auto industry, but let us absolutely insist that it only come with serious and meaningful restructuring that will lead to an industry that can legitimately compete.  Symbolic shuttling of executives will not be sufficient (and the Wall Street bailout didn't even achieve that seemingly obvious step); any Company that requires taxpayer money in the fight for survival is fair game for prudent meddling.  It's more than auto plants that will need retooling; it's the Big Three's entire corporate structure.

You can't get something for nothing.

There's no such thing as a free lunch.

Our families and friends haven't been exempt from these economic realities; why should the Big Three be any different?

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Originally posted to blueskiesfalling on Tue Nov 18, 2008 at 09:32 AM PST.

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