A sad day. Both I and my wife have many connections to Chrysler, Detroit, Michigan, and many other places supported, in part, by Chrysler. Many friends, acquaintances, and family members will get hit hard.
The Detroit News has a quick summary of the impact of the bankruptcy filing designed to save the company:
The Obama administration says the bankruptcy of Chrysler LLC should not affect “ordinary” operations of Detroit’s No. 3 automaker.
But Day One of Chrysler’s Chapter 11 era was anything but ordinary — two top Chrysler executives said they will leave, nervous suppliers refused to ship parts and Chrysler said it will shutter most plants during bankruptcy and disclosed plans to close six U.S. factories as part of its restructuring, including three in Metro Detroit by 2010.
“Once you pull the bankruptcy trigger, there’s no such thing as business as usual,” said Aaron Bragman, a Troy-based auto analyst with IHS Global Insight.
Nothing really all that good for anyone in Detroit or Michigan, although I suppose it beats a straight-out liquidation.
But I have to admit that I’m conflicted by this.
There is nothing new about car companies failing or getting absorbed by other automakers. That’s been happening for the entire history of the car industry. (Chrysler itself absorbed American Motors in the 1980s.) This also happens throughout our economy. I believe there is a value to this kind of economic churn. It’s how we free up the resources to create the new things we want and need. So, I don’t find myself fretting about the disappearance of the organization called Chrysler itself.
No, I’m far more worried about the human suffering that will result from this. A great many people will see their prospects in life quickly and permanently diminished. In the short-term, many people will struggle to provide themselves with the essentials of modern life – like food & water, shelter, adequate health care, and having the resources to educate their children. In the medium-term, many of these people will struggle to find a new economic life – because of the poor economy in general, but more specifically because of the housing bubble bust. It’s hard to leave Michigan – or any state or town where a Chrysler-related employer is located – if you’re underwater on your mortgage. (The Census Bureau recently reported that fewer people are moving nowadays, with large economic consequences.) In the long-term, some people might recover, but it’s unlikely that many of the unionized workers will find anything remotely like what Chrysler provided.
I’ve said this before. Liberals shouldn’t worry much about saving organizations. Economic churn is a good thing. But liberals should fight with every ounce of energy to make sure that people – actual human beings – don’t get flattened along with an organization.
It’s time for health care reform. It’s time for retirement reform. It’s time for educational financing reform. And, most importantly, it’s time for wage reform.