February 18, 2009 at 10:57 am

Daniel Howes: Commentary

Carmakers' nightmare continues

This slow, twisting automotive torture is not going to end anytime soon.

Tuesday, the race to see the "viability plans" from General Motors Corp. and Chrysler LLC revealed details that are even worse than feared. On March 31, the feds will be asking whether the automakers have made enough progress -- or whether Treasury Secretary Tim Geithner should just call the loans and push 'em into bankruptcy.

But he won't, because GM and Chrysler say they'll already be there without more taxpayer money, a lot more, from the federal government.

The stunning new cash needs of GM ($16.6 billion more in loans and credit lines) and Chrysler ($5 billion) will fuel talk in Washington and around the country that both companies should head straight to bankruptcy court. The challenge for the Obama administration is weighing the cost of Detroit's bankruptcy, including government-backed warranty guarantees and debtor-in-possession financing, against the cost to a lackluster economy in jobs and consumer confidence.

Either way, Detroit's nightmare continues. This is what a long, dark night for the communal soul looks like. There's a quest for finality that never seems to come, a search for stability amid economic drift, a hunger for certainty in wacky business conditions navigated by leaders who aren't sure exactly what to do next.

None of it comes.

All we seem to know -- the "we" being those who exist in the shrinking shadow of Detroit's automakers -- is that the next deadline will bring more of less. More jobs lost, more plants closed, more production cut, more brands rationalized, more benefits diluted, more pay reduced, more scorn and Schadenfreude from others.

Politics will slow process

And the next deadline is bringing more of less, as the details of the plans from GM and Chrysler attest. Dire outlooks from early December are even worse now, exacerbated by collapsing sales in the key global markets that essentially have financed massive losses in the United States for GM and Ford Motor Co. Not anymore.

Now, politics intrude. An unstated message from Team Obama is that the Detroit Problem, growing worse each month, is too big and too complicated to warrant the kind of crisp, painful solutions that a "car czar" or bankruptcy judge could deliver. Instead, the industry's workout will be overseen by a panel of bureaucrats likely to be the antithesis of crisp solutions.

"The more politicized the process becomes, the less likely there is to be a near-term solution," says John Casesa, managing director of the Casesa Shapiro Group in New York. "I don't know when you'll get it because clarity is going to be painful for a lot of people."

The result: An American-owned auto industry wallowing in an automotive purgatory somewhere between bankruptcy and nationalization. The companies steadily shrink, their mounting troubles only serving to destroy capital and undermine further their brands and corporate reputation.

An argument against bankruptcy, beyond the likely cost to jobs, dealers and communities, is that the process would tarnish Detroit's brands. Forget Chapter 11: As Hummer disappears by the end of the quarter, followed soon by Saab if the Swedes don't engineer their own rescue, why wouldn't this archly political process damage GM's remaining brands? It will.

Detroit is America's story

This is not just a Detroit story anymore, in form anyway. It's a localized metaphor for a nation now slouching toward a kind of bleak recession that Michigan has been living for most of this decade. The worst part: It'll end when it's over.

No one, not even the smart guys on Wall Street and in college economics departments, knows when. A chorus will renew calls to let Detroit die, as if it's a disembodied universe out of a Mad Max movie populated by losers, dolts, people who don't matter.

Except this: we are you, America, in some uncomfortable ways. The culture here glorifies the good ol' days, undervalues education, embraces victimhood and looks for easy solutions to difficult problems (see Detroit's automakers and the United Auto Workers). But the past few months look like America is getting Detroit-ified, too.

When the markets were in free-fall last autumn, a bipartisan coalition in Congress backed the Bush White House plan to bail out the people who helped cause the mess. TARP I was born. Then more bailouts. Then TARP II. Then the Obama stimulus package, signed Tuesday.

The point is that the Bigger America also is looking for the kind of certainty and stability that has been eluding the Detroit Bubble for a lot longer. And it's not coming -- at least not yet -- because we haven't found bottom.

Detroit's deepening business troubles, fast becoming America's, too, are a cautionary tale for a country beset with the legacies of its own financial overreach. We wrote the screenplay for that movie here, starring Detroit auto execs, UAW leaders and a whole lot of people who ignored the changes around them because it was too hard to change.

See where it got us.

Daniel Howes' column runs Tuesdays, Thursdays and Fridays. He can be reached at (313) 222-2106 or dchowes@detnews.com">dchowes@detnews.com or detnews.com/howes.