Memo to GM: Drop Dead

Many of the readers on this site support or invest in cleantech companies, of which green cars are an important component. We’ve all seen the dire predictions about what will happen if the Big Three automakers fold. Millions of people will be thrown out of work, the economy will implode, etc. If this happens in a vacuum, true, but nothing happens in a vacuum.

American automakers have been producing a mediocre product for decades, and have fought cleantech at every turn (remember the EV1?). They’ve earned their failure, and should be allowed to go into bankruptcy so that their assets and workers can be reallocated to companies that are not freighted with old baggage.

The government should send a clear message that it will bail out soon-to-be-idled auto workers and their suppliers, but not the companies themselves. Let’s look at where the real value is in the American auto manufacturing base.

The value is not in the upper layers of management or the corporations themselves. The value is in the millions of people who are employed by the auto industry, in their institutional knowledge and skills, and in the factories in which they work. Those people will still know how to build cars even if they are out of work for a year, and if supported during this interval, most will find work with new and more dynamic companies. Meanwhile, the factories will still be there. Such assets that can be sold in liquidation to entrepreneurs seeking to build new car companies.

I view this chapter of the economic crisis as a great opportunity, a chance to drive a stake through slow-moving companies that have done more to retard innovation than anyone. Get rid of the corporate shells and the bloated management and start anew. Provide special programs to support idled workers, fast-track universal health care so company-sponsored health insurance is rendered moot, and spend the rest on funding and incentives for new car companies to scale and bring hybrid and electric cars to mass production.

Remember, it took the U.S. just months to retool the auto industry in response to WWII. This may be the best opportunity in half a century to restart what was once the pride of this country’s manufacturing sector. It’s called creative destruction. The U.S. car companies have earned it.

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