A quick check of the headlines and blogosphere reveals some very innovative approaches to ‘rescuing’ GM and its brethren in Detroit.
Most all of them forsake a cash bailout (or otherwise pecuniary reward) for various plans to remake the companies: management and the boards must resign, production lines must be obligated to make only hybrid vehicles. Probably all of the ideas involve putting many thousands of people out of work, whether explicitly or implicitly required.
So here’s a dim bulb question for you: If you change the people and the products, what’s left of the company? What would we be saving with our tax-payer dollars?
Certaintly, we’re not talking about car companies anymore. Swap out the people and products, and you’ve got tangible assets (like factories and machines) and intangibles (designs and branding, for instance). As for the latter, I’m not sure the intangibles are worth much of anything, consideed in the light of any reasonable cost/benefit analysis of the companies’ many billions spent on marketing. Attach a GM, Ford, or Chrysler badge to a vehicle, and its value increases by…what, anything? Or does it actually decline?
The very idea of rescuing these companies relies on there being some residual value to those names. It would require some miraculous re-engineering to find it, and I worry that the ultimate payoff might be the creation of differently-configured but otherwise identically incapable (or unneeded) car companies.
The factories and machines, however, have some tangible, depreciated value,. Couldn’t they be repurposed to make products that a market might need? Solar panels, some other widgets, even floor polish. Who cares? If the punchline is to rescue jobs, the presumed rescuers should open their minds to how they achieve their goal.
A healthy first step would be to stop thinking about the companies as car brands. They’re not; rather, they’re businesses in search of a purpose. And profitability.