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It Takes a Lot to Laugh, a Bankruptcy to Cry
by Dean M. Peters , Editor
January 15, 2010

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More than a half century ago, Charles Wilson (not to be confused with the former U.S. Senator from Texas or the current U.S. Representative from Ohio) was running General Motors. Upon Dwight Eisenhower’s election in 1952, he nominated Wilson to become Secretary of Defense. This triggered some controversy because Wilson held many shares of GM stock, which he was reluctant to sell. He did eventually sell them under pressure from the Senate Armed Services Committee, which held his confi rmation hearings. However, during those hearings Wilson was asked if he could make a decision as Secretary of Defense that went contrary to the best interests of GM. His response led to one of the most misquoted statements of modern times. Wilson said he could indeed make that type of decision, but that he couldn’t foresee any such situation “because for years I thought what was good for the country was good for General Motors and vice versa.” Wilson was eventually confi rmed and served as Eisenhower’s Secretary of Defense for about fi ve years, but history trimmed and simplifi ed his statement into “What’s good for General Motors is good for the country.”

There may have been a time when that statement was true in both its original and its revisionist form. But that time is not the present because on June 1, 2009, the company that was once the largest commercial enterprise in the world fi led for protection from its creditors under the bankruptcy laws of the United States. We had plenty of warning that it was coming, but for those of us who grew up thinking GM would never need protection from anything, it was still a shocking day. And it was a sad day, too – for American business, for American manufacturing and for the American people.

We need not deal with blame here, though there is plenty of it to spread around. Rather, let’s just hope that GM doesn’t spend too much time in Chapter 11 because what’s emerging in bankruptcy is a company that is 60% owned by the U.S. government, with the remaining 40% to be held by the Canadian government, the UAW and bondholders. Speaking plainly, there is so much that stinks about this arrangement that it could fi ll this column in the next issue, and perhaps it will.

Maybe I should be happy. After all, as one of 304 million American citizens, I now own 0.0000002% of GM stock, which as of GM’s May 1 fi ling comes to what used to amount to 1.22 shares. Maybe we should all be happy about our windfall in GM shares, but if this is happiness, I’d rather be sad. I hope Bob Dylan will excuse my paraphrasing a song title of his, but in these troubled times, when companies are going broke and good manufacturing jobs are being lost by the thousands, it takes a lot to laugh, but only a bankruptcy to cry.


by Dean M. Peters , Editor
ForgeEditor@forgemag.com
Editor Dean M. Peters has written extensively on metal working markets and the issues that affect them. He can be reached by e-mailing ForgeEditor@forgemag.com

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