Bad for GM; Bad for America?

Sunday's Baltimore Sun has a must-read by Michael Hill on America's industrial woes:

As recently as 1980, GM sold 44.5 percent of the cars bought in the United States. Last year - even with heavy discounting - that was down to 27.3 percent. . .

GM said it expected to lose $850 million in the first quarter (the actual numbers are due this week), its bond rating plummeted to near junk status and its stock fell to a 10-year low.

There are many reasons that GM is in such trouble, but the bottom line is that it is not making enough cars that people want to buy.

"I am holding on to what I know and remember as the American automobile industry," says Stewart W. Leslie, a historian of technology at the Johns Hopkins University who teaches a course on the history of the automobile. "A lot of us are desperate for that. But they can't build the cars we want. . .

Instead of leading the way, American automobile makers always appear to be reacting to innovations from Japan and Europe, always one step behind, playing catch up.

Now, it's caught up with GM.

Crunch the numbers - particularly the huge health care and pension obligations it agreed to in labor contracts signed during the salad days - and it is hard to imagine how GM survives.

"GM has become essentially a giant health care provider that also makes some cars," says economic historian David Sicilia of the University of Maryland, College Park.

Read the whole thing--read it and weep.

(via reader Ken Robinson)