Commentary: Day of infamy

Do you think they'll change the name to "Government Motors?"

No, that would contradict the professed political goals outlined by President Barack Obama, who says repeatedly he doesn't want to run a car company. And it would conflict with the business objectives of General Motors Corp. CEO Fritz Henderson, who insists government meddling in GM is not "going to happen."

We'll see. There's no doubting the historic import of GM's bankruptcy filing Monday, the brutal humbling of an American corporate icon and confirmation that taxpayers in the United States and Canada will own 72 percent of an automaker to be considered an arm of government -- until it isn't.

Obama and Henderson each paint reassuring pictures of a "new GM," so easily forged, to hear them tell it, by the sacrifices of employees, communities and mostly wiped-out investors. Nothing easy about it. The pain to get there will be intense, as the next wave of plants closings and job cuts attest. The assurances of success, whatever the president and GM's CEO say, are not rock-solid, either.

They can't be -- not in the global auto business where trusting, paying, repeat customers are the lifeblood of success. Without them (or even more billions on top of the $50 billion already committed to GM), it'll be game over.

GM's government-backed bankruptcy play, the largest ever by an American industrial concern, is fraught with political risk for the president, uncertainty for GM and more angst for automotive communities around the country. It's also the only option available to escape a downward spiral that surely would have culminated in liquidation -- and it still may.

In this town, Monday, June 1, 2009, will go down as the Detroit equivalent of Dec. 7, 1941, the date FDR said would "live in infamy." GM's slide into a New York bankruptcy court is the industrial equivalent, marking the final collapse of a post-war business model that united big, high-cost business with big, high-wage labor in a marriage that delivered unparalleled prosperity to the middle class.

Until it didn't.

This is an important point: Conventional wisdom in Detroit-centric auto circles is that someone else -- aggressive foreign competitors, disloyal American consumers, greedy executives, parasitic unions, a lazy news media, to name a few -- is to blame for the forced dismantling of Detroit.

Partly, but so much more: Acceptance that good enough cars and trucks were good enough, when the evidence and the market share trends suggested otherwise.

The belief that pay and benefits could only go one way -- up -- because they always had. A culture that spent more time looking at its past in the rearview mirror instead of tooling itself, and its children, for the future.

Monday, all that was declared dead, even if it actually still lives, battered and bruised, in offices, on plant floors and in GM communities. Henderson's GM, he says, will be about two things the 101-year-old company mostly wasn't -- speedy execution and a single-minded focus on customers.

In that, there's hope amid the economic carnage of more Michigan plant closings and the prospect of more lost jobs. But stop to consider where we are here in Detroit, which is fast on its way to becoming a geographic ward of the federal government:

National governments, mostly the United States, control two-thirds of Detroit's Not-so-Big Three. American and Canadian taxpayers are "debtor-in-possession" lenders to GM. A Russian bank, Sberbank, controlled by the Russian government would hold a 35-percent stake equal to GM's in its Adam Opel GmbH unit in Germany.

Just asking, but wouldn't that make President Obama and Prime Minister Vladimir Putin business partners, at least indirectly, with Germany's chancellor somewhere in the mix?

It's stunning, this scramble to rescue Detroit automakers whose critics relegated them to complete irrelevance, wrongly. Amid punishing economic times, GM and a soon-to-emerge Chrysler Group LLC are proving to be very relevant to the economy and, thus, to presidential politics.

But can they emerge from the culling of bankruptcy, and do it with products American consumers are willing to buy? Can they resist the meddling predations of politicians and their friends in organized labor, who are likely to use the fact of taxpayer investments to try to bend GM and Chrysler to their will?

Again Monday, the president signaled that won't happen. But it already has. His proxies fired former GM Chairman Rick Wagoner at a time when the federal government didn't own a single share of the automaker. Second, GM relented to pressure from labor on its plans to assemble subcompact cars overseas, agreeing to build the cars at a yet-to-be-named plant here in the States.

Obama and fellow Democrats in thrall to Washington's powerful environmental lobby make no secret of the quid pro quo for Detroit receiving government money: Motown takes the money, and Washington gets smaller, more fuel-efficient vehicles -- whatever the market demand, apparently.

"Government Motors?" Yes, until the rhetoric of the "New GM" touted by its CEO and the president survives bankruptcy and matches reality. So far, not so much.

dchowes@detnews.com">dchowes@detnews.com (313) 222-2106 Daniel Howes' column runs Tuesdays, Thursdays and Fridays.