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Subject: Lt. Gen. Motors=
Date: Wed, 28 Oct 92 04:28:31 EST
Message-ID: <3.1992Oct28.042831@AmeriCast.com>

Lt. Gen. Motors=

 GENERAL MOTORS is for better and worse a symbol of the American
economy. Its prominence as largest manufacturer and No. 1 au-
tomaker is part of the reason; unfortunately, its monumental
losses in recent years have been emblematic as well. That's why
the belated decision of the company's outside directors to force
the resignation of Robert Stempel as chairman and chief executive
was a healthy sign.

 A lot of U.S. companies in basic industries have been hurting
through the 1970s and 1980s. The tendency has been to look out-
side - if not beyond the nation's borders then at least beyond
the company's - for explanations and villains. Unfair foreign
competition has been one such whipping boy; the burdens of U.S.
government regulation (or deregulation, as the case may be) and
taxation are regularly cited for their destructive effect as
well. Management can also be counted upon to blame the high cost
of U.S. labor; labor is meanwhile of the view that unimaginative
management is to blame.

 In fact, at some level management always is, if not to blame, at
least responsible in the sense of being the one to steer. The
Stempel ouster represents an acceptance of that responsibility.
The board that had appointed him only 2 1/2 years ago ack-
nowledged in effect that it had made a mistake and that he was
too much a creature of the smug and laminated General Motors cul-
ture that it was his job to uproot.

 A lot more jobs are now likely to go by the boards as this giant
company continues to try to become efficient; some entire commun-
ities will be hurt. One question is, what are the policy implica-
tions, which is to say, what should be the government's role not
just in the rolling readjustment of General Motors but of all the
companies in other major industries (including defense) for which
it stands?  The competition and readjustment issues have figured
to some extent in the presidential election campaign. The answer
is surely not protectionism; in the long run that temptation
would hurt the U.S. economy more than help.

  But neither is reflexive laissez-faire a particularly edifying
approach (not that a government as large as this can ever prac-
tice true laissez-faire, anyway).  Free-trade agreements (and
some regulatory decisions) perhaps do need to take the temporary
weak spots in the U.S. economy into account. The government may
be able to help as well in educating and retraining workers, sub-
sidizing and even organizing research - and of course if it can
begin controlling health care costs. Some people call that sort
of thing an industrial policy, even when relatively modest in
scope and degree of intervention. But a good industrial policy
reserves support for the lean companies and industries that earn
it, which brings us back to General Motors. Wish it luck.

 02:03 10-28C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
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