Earlier this week the United States government rejected General Motors restructuring plan. Common sense, and Occam’s Razor, which, roughly put, is a line of reasoning that says the simplest answer is often the correct one, points to the submission of GM’s plan as well as the government’s rejection of it as being a thoroughly scripted and choreographed political and economic drama.
Despite its precarious condition, General Motors had the ways and means to use internal staff and external consultants to put together a coherent and viable proposal. It’s naive to think otherwise. Lobbyists, bankruptcy attorneys, and creative bean counters were at their beck and call, for fees which a fraction of the bailout monies they’ve received would have paid for. But GM didn’t want to be solely responsible for the cuts that would have had to be made in order to get the government nod.
Enter DC, stage left. The plan’s not viable, they say. Off with Wagoner’s head, they say. Decisive action, at least on the surface, that doesn’t yet alienate the GM employees, who a cynic would say are seen as voters, not workers and families with an uncertain future. What’s next for the company is not presented immediately, but as the week proceeds, with the President safely distanced in London for the G-20 economic conference, it’s clear that GM is headed, with the government at the wheel, for a carefully orchestrated declaration of bankruptcy. A bankruptcy that’s meant to occur without causing the kind of panic that one would expect to follow such a declaration from an American industrial icon.
So far the massage is working. No riots in Detroit (at least not yet), although the internal psychological state of its residents must be fragile at best. The blame has been spread around to the degree that there’s no one party to whom all can point with an accusing finger.
When many are perceived to share the blame, no one has to shoulder more than a fraction of it. So all parties get more of pass than any of them deserve.
Nicely choreographed, nicely executed. Appearance trumps reality.
But all will pay down the line for either betting that we’re more ostrich than human, or for being more ostrich than human. The longer the short term denial, the greater the eventual pain.
Act II should be a doozy.