June 2, 2009
By James R. Healey
General Motors' bankruptcy is the fourth-biggest, measured by assets just before filing for Chapter 11 protection, but it's No. 1 in symbolism: An American icon throws in the towel. The inventor of the car payment, the tailfin and planned obsolescence no longer can hack it.
No choice, CEO Fritz Henderson says in the court filing: "In the face of the global meltdown of the financial markets, and a liquidity crisis unprecedented in GM's 100-year history, there is only one way …"
There are GM contributions to celebrate, perhaps as many to vilify. But in either case, it's hard to ignore the sheer impact of the once-colossal U.S. car company. And it's hard not to wonder whether a smaller, post-Chapter-11 GM ever will have as much influence. And if not, if it's just another car company, will it prosper? . . .
"Both economically and culturally, it's been one of the most important institutions out there," says Michael Davis, who teaches economics and finance at Southern Methodist University's Cox School of Business. He's also a car enthusiast and owns an older Ford Mustang. "We've been a car culture. We just love that stuff," because of GM, he says. "It's part of who we are."
Davis says GM gets credit for "this whole notion that your first car would be a Chevy and then a Pontiac and so on, and you'd have a Cadillac when you moved to Florida" to retire. . .
Says Davis, the SMU economist: "I'm rooting for (GM). Speaking not as an economist but as a car guy, it would be wonderful if somehow they recaptured that luster, that magic. I'd like to think that somewhere there'll be another Corvette or 1964 GTO, whatever it would be; some really great car.
"Speaking as an economist, I'll give you the typical economist's answer: Time will tell."
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