A Glittering Past, and a Future Full of Uncertainty
It has, sadly, become conventional wisdom: We don't make anything in America anymore. We simply order it up from China. And now, with General Motors in a tailspin that could last years, it seems an apt moment to take another look at the nation's place in the world and in the world's ever more integrated economic life. CEO Rick Wagoner's announcement that GM will shed 30,000 jobs and close eight factories is, regrettably, just the beginning. Here's what else is likely to happen: Toyota will, before too much longer, knock GM from the perch it has held since 1931 as the world's largest automaker. GM, which generated patriotic fervor with its "Keep America Rolling" promotions after 9/11, will send a big chunk of its manufacturing and development work overseas. Unionized workers will protest, and perhaps strike. Regardless, they are in for a rougher ride than they've endured during any recession of the past 30 years. After earlier slowdowns, high-paying union jobs returned. This time, they won't. Period. In fact, the jobs are disappearing now in a strong economy. That represents the "displacement" caused by globalization, which, supporters like to say, will ultimately lift all boats. Well, most.
What's happening to General Motors, however, is exactly what is good for the company. And it would be good for the nation if it happened faster. Back in the 1960s, when GM controlled half of the U.S. auto market, it could dominate simply by dint of its heft. Today it can't. Korean car companies, once the butt of jokes, now turn out fresh products twice as fast as "The General" and compete with all-American GM brands like Chevrolet and Pontiac. The same thing is happening in the steel, textile, technology, and computer-programming industries--and may soon touch you and me. We tend to believe that, as Americans, we are entitled to dominate. Yet the upstarts who challenge us are ferociously hungry--and talented to boot. Many of them, like us, believe in a manifest destiny--just not in English.
General Motors, most experts believe, will eventually emerge as a smaller, more competitive company. It may even return to robust health one day. If GM is ever going to be a true world-beater again, however, it is first going to have to learn the lessons of humility. That may be the new American Experience.
This story appears in the December 5, 2005 print edition of U.S. News & World Report.
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