A global view of General Motors’ Bankruptcy

With each passing week, the news seemed more and more inevitable. Still, it’s impossible to totally prepare for the shockwaves when a company the size of General Motors declares bankruptcy. Not long ago, GM was an icon of America, perhaps THE symbol of American might, creativity, and ingenuity. GM built sexy sports cars and luxurious sedans that were the envy of the world. No longer.

The company itself symbolized the strength and vitality of the city of Detroit. Today, the city and company lay in smouldering ashes.

The reverberations of a General Motors bankruptcy aren’t isolated to Detroit, the Midwest, or the U.S. The effects of GM’s bankruptcy are being felt far and wide. Declaring bankruptcy serves as a timeout, a way for GM to effectively wipe the slate clean and start over. But the rules apply only in the U.S.

What about the seatbelt factory in Mexico City that supplies products for GM cars? Or what about auto parts suppliers in China? What does a GM bankruptcy mean there?  I interviewed William Holstein, author of  “Why GM Matters,” to talk about some of these issues.

And what about Ontario Canada? That province produces some 20 percent of GM’s North American vehicles?

A few weeks back, I visited Ontario and met with several auto factory workers, some employed, others out of work. Many seemed in a state of shock. The livelihood they had known for decades was vanishing; they were watching their lives disappear. I met one young man, Euan Gibb. He’s in his early 30’s and still has time to switch gears and find a new career. He might have to do just that. I called him up shortly after GM declared bankruptcy. Gibb said he’d like to go back to building cars. But he says, “I don’t see a way in.” That’s not just because jobs are scarce. Gibb says he’s not attracted to the auto industry, with its focus on short-term profits and minimal input from the workers. To lure Gibb back, the industry has to change.

To lure buyers back, GM has to change its vehicles. GM is already trying to move past bankruptcy, advertising itself as the “New GM.” New is often associated with improved. We’ll all have to wait and see.

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