The Common Good

Do Detroit and the Big Three Automakers Have a Prayer?

Sojomail - November 20, 2008


I came here 25 years ago to live in the countryside and raise my family. We wanted to resettle the whole land of Israel. But now when I see how our soldiers treat Palestinians at the checkpoints, I am ashamed. I want us to get out of here. I want two states for two people. But I can’t get any money for my house and I can’t leave.

- David Avidan, an Israeli living in the Jewish settlement of Rimonim. He is one of 280,000 Israeli settlers living on Palestinian lands in occupied West Bank territory. (200,000 more Israeli Jews live in East Jerusalem, also captured and occupied since 1967.) According to Avshalom Vilan, an Israeli Parliament member from the left wing Meretz Party, “Half the settlers beyond the barrier are ideologically motivated and do not want to move. But about 40 percent of them are ready to go for a reasonable price.” (Source: The New York Times)

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Hearts & Minds by Jim Wallis

Do Detroit and the Big Three Automakers Have a Prayer?

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My hometown of Detroit was on the front pages of the New York Times, the Washington Post, and the Wall Street Journal this week. The CEOs of Ford, Chrysler, and GM all came to Washington to ask for a bailout of emergency loans.

I was back in my hometown a few months ago. We drove around the dying town and passed a park where a tent city had sprung up. I couldn’t help but be nostalgic for the days when I grew up. Almost every kid’s dad had a job, a pretty good one, with a fair wage and benefits. Our houses weren’t very big but we were happy, and we could even take a vacation once a year to a nice campground outside the city. My dad worked for the power company, and I grew up knowing that all I had to do was ask and I could also get a job there out of high school.

Mitt Romney grew up in Michigan as well and took a trip down memory lane in a New York Times op-ed. He argued that it is time for the big three to go bankrupt so they would then drastically restructure themselves. Remembering back to when his father took over American Motors (since bought by Chrysler):

The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it.

When I was growing up, companies and their investors thought about long-term relationships, not just quarterly profits. They considered the effects of their decisions for decades to come, not just about what would happen with yearly dividends. Romney also remembers those days when his father worked with Walter Reuther, head of the UAW in a restructuring:

The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.

Michael Gerson also toys with the idea of letting GM go bankrupt, but concludes that it would be too risky and “could result in a bottomless psychology of panic.” And, on the pages of the Wall Street Journal, the CEO of GM pens a plea that they are just about to turn a corner if given a little more time.

Into the competing voices, Washington Post business columnist Steven Pearlstein wrote about the “partisan stalemate” in Congress. "Then," he continued,

in steps [President-elect] Obama with the utterly reasonable proposition, delivered in a television interview, that while the failure of General Motors, Chrysler and Ford posed as much of a risk to the economy as AIG and Freddie Mac, he wasn't about to provide three uncompetitive companies with a bridge loan to nowhere. As a condition of his support, he would require that all the constituencies -- the shareholders, creditors, workers, pensioners, managers and dealers -- make the necessary concessions needed to restructure these companies and put them on sustainable, competitive footing. ...

Yesterday, before the Senate Banking Committee, top company and union executives stuck to their story of victimization and imminent transformation. But the Bush administration, Democratic leaders and many Republicans in Congress seem to have embraced the Obama principles.

The latest news reports today indicate that Congressional action before Thanksgiving is unlikely. So today, my prayers are with my home city. I pray for the hundreds of thousands who are wondering about their jobs, the executives with difficult decisions to make, and that our legislators will have wisdom and work for the common good.

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