What's Good For GM........

So it finally time for us to test that old saw, "what is good for GM is good for America". As this scribbler predicted, Ford emerges as the most viable car company while Chrysler and GM are poised to become history (at least in their current guise) as the bailout failed in the Senate yesterday.

Entering bankruptcy will be painful, but not necessarily bad for America in the long run, for a number of reasons. Firstly it will signal that badly run companies must succumb to market forces at some point, no matter their size - the checkbook, if not closed, is at least in need of a refill of fresh checks. Secondly, it will focus the minds of the surviving entities and we will have better vehicles as a result. Thirdly, the suicidal race to the bottom in terms of discounts will hopefully be reduced to a gentle glide toward efficiency: he who is efficient will sell at the most attractive prices. Fourthly, it will extirpate the fat and impossible demands of labor that are crippling our car makers. Finally, it Will reaffirm that we are indeed a capitalist society, not a corporate welfare society.

But where from here? Well, like guys who have their fantasy football teams, here is my fantasy US car maker breakup scenario:

(1) Chrysler sells Jeep to Tata Motors, who urgently need an "in" to the mass US 4X4 market, and something to erase the memories of dismal British quality (if only to replace it with dismal Jeep quality, but better the devil you know). Tata also gets Hummer for free. GM should be happy to get rid of the cash drain.

(2) GM sells Saab to Ford who, with Volvo, would have a credible European premium brand base in the US. Talks of selling Volvo are insane, given the myriad Ford products that are based on Volvo products. Ford needs a reasonable premium European alternative in the US.

(3) Lincoln and Mercury are history. Ford concentrates its premium brands on Volvo/Saab combo, incorporating the best of Mercury (the Mariner. Period) and Lincoln (everything except the Town Car).

(4) Pontiac is gone.

(5) Buick is gone.

(6) Saturn is euthanized after a long agonizing death.

(7) Chrysler gets a much needed boost by absorbing Cadillac and merging its "premium" Chrysler line. This would give Cadillac a wider market (a Cadillac minivan for heavens sake! Soccer moms rejoice! Owning a Cadillac that gets more than 10 miles to the gallon and can seat 8 - it could be cool to drive a minivan again). And Chrysler would gain some street cred.

(8) Chevrolet,GMC and Dodge merge to form a company that sells lower end pickups and sedans for people who like to buy their cars where they buy all things utilitarian (hey, Sears! Why not sell Craftsman products at these dealerships?).

Hey, that would be an ideal world - at least for me. I think however, that if Washington keeps weighing in, we will end up with no synergy and a big bill. Time will tell, but for now, let capitalism ring!