Wagoner, GM Deserve One more Shot

A big fat book has been laying on the table near my desk. I’ve noticed The ELM Guide to U.S. Automotive Sourcing, Volume II. It’s about 1,200 pages and is several books within one cover, listing and describing 3,378 domestic plants that serve the U.S. Auto industry.

For instance, Genco Stamping & Mfg. Co. is in Cookesville Tenn. and employs 105 workers stamping auto parts out of steel, aluminum, brass and copper. The Dahlonega plant of The Torrington Company employs 274 in Georgia in the manufacture of needle bearings. The last entry in the guide is ZF Group NA in Tuscaloosa, Ala. ZF’s 200 employees in this plant assembles and tests axles. Certainly, automaker claims that 3.5 million work in the overall supply chain are credible.

This guide, which has been gathering dust and is a tad pricey at $775, puts some detail on the extensive web of automotive suppliers that would be at risk if we let GM, Ford and Chrysler go Chapter 11. Those jobs and companies would all be at risk. As President-elect Obama said yesterday on Meet the Press, the capital markets are so “shaky” that it would be difficult to reorganize a company like GM under current circumstances without risking a shutdown. “I don’t think it’s an option simply to let [The Big three] collapse,” he said.

That’s why I get angry when taxpayers with no direct vested interest in the three automakers advocate bankruptcy as the solution. The pain and suffering is too great to ponder. To be honest, all Americans have a stake in the survival of U.S automakers for many reasons.

Call me a shameless apologist for the American auto makers, specifically GM. I have sympathy for GM and agree with many recent defenses offered by its leaders. GM VP Bob Lutz today gave a spirited defense and credible defense of GM and his embattled boss, CEO Rick Wagoner,  who finds himself in an impossible position. I agree with Lutz’  assertion that government money is a loan, not a gift which the term “bailout” suggests.

Firing Wagoner is like getting rid of the terrific baseball manager purely for the sake of change or at the whim of the team owner. Remember Billy Martin who George Steinbrenner kept rehiring? Rick Wagoner’s resignation potentially erases many of the gains made by GM already and leaves the company in the hands of someone who has to get up to speed when there’s no time left on the clock.

I will concede there is a viability question about GM. How can it make small, efficient and inexpensive cars and survive? After all, it’s lived off the fat, bloated SUVs and pickups for years. But if you recall, the SUV saved the company in the early 90s when an outsider name John Smith came in and rescued the struggling giant without any government assistance.

But those were different times when GM was paying the price after years of building cars lacking in quality and differentiation. GM had the late Roger Smith for to thank for that.

I say give Rick Wagoner and GM one more shot. And if you want understand what the auto makers mean to the U.S economy, thumb through the The Elm Guide if you have one handy.