GM to Close Plants

Monday, November 21, 2005
GM announced today that it would close a dozen plants and eliminate about 30,000 jobs. This is of course devastating to a lot of workers, their families, and the communities they live in but it is probably the right thing to do.

However, what caught my eye was the UAW's response to the news. They called it, "extremely disappointing, unfair and unfortunate." I'm not sure what the UAW expect to happen. It is quite clear to me that GM, with its huge pension obligations and outdated cars, simply can't compete with the Japanese auto manufacturers. You can hope and pray that Americans want to buy more expensive, less reliable, and less stylish cars in order to keep your business running but in the end, it probably won't help.

No doubt, that management at GM has screwed up in the past and is a major cause of this current contraction but the past is in the past. Is it fair that they got to screw up the business and the workers have to pay for it? Probably not. But there is something I learned when I was eight. Life isn't fair. If GM doesn't have the capacity to support all these plants and workers they simply don't have it. You can't keep running a business at a lost, because sooner or later everyone suffers.

I speak from experience. My company has had to go through several layoffs in the past few years. Each time, it was not the fault of the people getting laid off, just the reality of the business. In fact, if the owner would have just had the foresight to lay people off sooner than he did, he might still have his business and saved the jobs of many people who got laid off at the end.