Now, the United States of America—you and I—will be GM’s majority shareholder. This situation gives a whole new meaning to Charles Erwin Wilson’s 1952 testimony to the Senate Armed Forces Committee: “What is good for the country is good for General Motors, and what’s good for General Motors is good for the country.”
That’s why I’m troubled by what I’m not seeing in this deal.
At the behest, as I understand it, of its new majority shareholder, GM will refocus its production on small, fuel-efficient vehicles and sell off or close the divisions that have built heavy, fuel-guzzling but profitable vehicles. This decision will make environmental advocates happy, but only those who have no stake in GM’s financial success—again, remember, that’s us, the citizens of the U.S.A. For us GM shareholders, the company’s focus on smaller cars is only half of the formula for success. The other half must be demand from GM’s customers for small, fuel-efficient vehicles.
What would motivate this market to buy such vehicles? High fuel costs; nothing else. That has been the lesson from every oil crisis since 1973. When fuel costs were high, people bought smaller cars. When the price of oil collapsed, the party resumed. Bolstered by narrowly focused lobbying from consumer groups, the auto industry successfully fought back attempts to raise “corporate average fuel efficiency” (CAFE) standards for two decades.
We can’t afford to play this game any more. Now those Hummer-happy consumers stand to lose a lot of money if GM’s small-car strategy, imposed by us, the majority shareholders, fails. We are going to have to get used to paying more—a lot more—for our automotive fuel if we’re not to lose our shirt with GM.
I could appeal to your better nature and say we should make fuel expensive to motivate ourselves to reduce our damage to the environment and our dependence on oil imports. But I’ve seen enough comments from people who think climate change is hooey (please, spare me any more) that I’m going to take this tack: We must advocate a government policy that will make gasoline and diesel fuel so costly that the behavior of U.S. car buyers will change. I've heard several proposals, but I don’t intend to debate them. I just want to see something done that will ensure that GM’s small-car strategy will find a market.
Do I want to pay more for fuel? No. Do I think the U.S. economy will emerge unscathed from a dramatic rise in fuel costs? No. Then why would I want to raise fuel prices? To get the country I love, and for which I have gone to war (Vietnam, I Corps, 1967-68) back to living within its means and behaving as a responsible member of the world community, caring for the planet’s environment.
Remember: “What is good for the country is good for General Motors, and what’s good for General Motors is good for the country.”