GM's bankruptcy was 40 years in the making

General Motors, as expected, filed for bankruptcy protection Monday. The 101-year-old company is expected to emerge from bankruptcy leaner and 70 percent owned by American taxpayers. Call it TM, Taxpayer Motors.

GM, once the behemoth of American industry and ingenuity, has been in decline almost since the day my parents bought the first new car they had ever owned — a 1963 Chevrolet Biscayne with a six-cylinder engine, rough fabric seats and no options, not even an AM radio. Back then, General Motors was selling nearly half the cars sold in this country. GM brands were stepping stones with each brand — Chevrolet, Pontiac, Buick, Oldsmobile, Cadillac — marking a higher rung on the economic ladder. GM was so dominant that the Johnson administration was reported to be considering filing an anti-trust suit against GM.

GM dominated the American market, but it was foreign competition that struck the thousand small blows that eventually bled GM into insolvency. GM followed a "we'll show them" strategy against the foreign automakers. GM was a giant; it could overwhelm the competition. When the venerable Volkswagen beetle, a car designed by the Third Reich as a practical, economical "people's car," made inroads, GM answered with a sportier-looking car that copied the VW's air-cooled rear engine, the Chevrolet Corvair. But the Corvair, which my father and brother owned and which I enjoyed driving, had a design flaw — the rear suspension could fold up under the car in hard maneuvering, causing the car to flip. It was the Corvair that launched Ralph Nader and was the prime target of his book, "Unsafe at Any Speed."

When Japanese automakers challenged GM's dominance, the company answered with the Chevrolet Vega, which had even more problems than the Corvair. The Vega, promoted in magazine ads as "Twinkle, twinkle, little car," had a habit of blowing its engine. The Vega was also a pawn in the battle between GM and the United Autoworkers. A worker at the plant that built Vegas bragged to a reporter that he had strung a loose nut between brackets inside the roof of a Vega, resulting in an annoying rattle that could only be found by taking the entire roof apart. Autoworkers got back at GM by sabotaging the product, never realizing they were also sabotaging their own futures. Later, GM sabotaged its own Saturn venture by abandoning the new brand's unique relationships with workers and buyers. The current Saturn lineup is just a copycat of other GM models made like all other GM vehicles.

To save money and boost profits, GM in the 1970s and '80s turned its cars into clones of each other. A Chevrolet Malibu is an Olds Cutlass is a Buick Century is a Pontiac Tempest. At one point, a family of clones spelled its own name: The Chevrolet Nova was also the Olds Omega, the Pontiac Ventura and the Buick Apollo — N-O-V-A. GM also made a habit of introducing a small car, then making it bigger and bigger because bigger cars produced bigger profits. The original four-cylinder Chevy II (a used 1963 version was my first car) grew into the Chevy Nova with an oversized V8. When gasoline prices fell, GM and other U.S. automakers leaped at consumers' interest in truck-like SUVs, preferring short-term profits to long-term sustainability. GM never seemed to realize that functionality and reliability, which Japanese automakers concentrated on, were a better means of retaining customer loyalty than planned obsolescence.

I remain skeptical about taxpayer-owned GM's ability to respond to consumer interests and produce reliable, desirable vehicles at reasonable prices. At the same time, I think it is essential that America regain its manufacturing base, which made it possible for the United States to win World War II as automakers turned out trucks, tanks and planes for the war effort, eventually overwhelming Germany and Japan. America's shrunken industrial base would be hard-pressed to convert to war footing today.

GM's future will depend on its ability to produce reliable, economical, functional vehicles that consumers will value. The company's Cadillac line, its new Chevrolet Malibu and its upcoming Volt electric vehicle hint at what's possible. Taxpayers will be looking for a return on the $50 billion and counting that taxpayers have poured into GM. Let's hope we get our money back.

Powerful enough to replace GM's president

The most powerful man in the world just got more powerful. Now he can fire the president of General Motors.

President Obama, who holds the world's most powerful office, announced today that General Motors and Chrysler have not done enough to earn more government support. Rick Wagoner, GM's CEO, had already resigned under pressure from the Obama administration. The president held out the threat of bankruptcy if the corporations don't come up with plans the administration approves. Obama wants Chrysler to merge with Fiat, the Italian automaker (apparently on the theory that it will work out so much better than Chrysler's merger with Daimler Benz), and he wants GM to do ... something different.

Wall Street was so thrilled with the president's business expertise that the Dow dropped more than 300 points within a couple of hours. GM and Chrysler have made some dumb, short-sighted decisions in the past 40 years (back when the U.S. Justice Department was threatening to sue GM for anti-trust violations because it controlled over half the U.S. new-car market), but I'm not convinced that the president and his advisers know more about car manufacturing and marketing than the folks who've spent their adult lives working on cars.

Taxpayers have poured a ton of money into the automakers already, but it seems to be the height of hubris for administration officials, with all of two months on the job, to think they know more than GM and Chrysler officials. And if the president can tell GM to replace its CEO, what's to stop him from replacing the CEO of Bank of America or Microsoft? It looks like we're gathering speed on a slippery slope.