Monday, June 1, was the end of an era for the American automotive industry. As nearly everyone not living in the jungles of Borneo knows by now, once-mighty General Motors, the flagship corporation of American automobile manufacturing and one of the most potent symbols worldwide of American industrial might, slid into Chapter 11 bankruptcy after the Great Recession dealt the long-foundering giant the coup de grace. In what is being billed as the fourth-largest bankruptcy in American history and the largest ever for an industrial manufacturer, GM claims $82.29 billion in assets against almost $173 billion in debt--this, be it duly noted, after billions in federal government bailout monies have been shoveled GM's way.
Since the beginning of the decade, the company whose fortunes were once proclaimed to foreshadow those of the nation as a whole saw share values plummet from around $70 to 70 cents. As part of the June 1 bankruptcy, GM announced plans to shutter or idle 12 of its plants, laying off tens of thousands of workers in the process. Many of its marquee brands, including Pontiac and Saturn, would be sold off or discontinued, and shareholders wiped out.
The U.S. government, with a new cash infusion of $30 billion on top of $20 billion already showered on GM, will now have an ownership stake of 60 percent. Our fine neighbors to the north got into the act, too. Under the terms of GM's bankruptcy, the Canadian government is contributing $9.5 billion in exchange for a 12.5 percent stake in the company.
Despite the foolishly optimistic vaporings of President Obama and other politicos thrilled at the prospect of Washington running an automobile company ("A new beginning ... a rebirth ... a new General Motors," Senator Carl Levin of Michigan called it), the corporation that has now been nationalized will never be more than a pale shadow of the …