The bureaucrats and politicians at GM and the bureaucrats and politicians in DC are carefully and politely carving up the cadaver that was once GM. The autopsy is being performed in Washington behind closed doors, perhaps in the Rayburn building. The scenario could play out like this: While GM executives sit out in the hallway, UAW bosses sit in secret sessions with Congressional Democrats, pounding the table and demanding that they and their union members be compensated for delivering the vote. Democrat party leaders scratch their collective heads, trying to figure out a way to put money in the hands of unions without rewarding automotive execs for sub-par performance. This is no easy task, even for experienced enablers of parasitic behavior like those on Capitol Hill.

Meanwhile, the remaining GM execs are in a huddle trying to figure out how to save their jobs or cobble together a nice golden parachute that doesn’t draw too much attention from the media, the unions or the clowns in Congress. Rick Wagoner’s exit package will be closely scrutinized. They’ve already thrown white collar retirees to the wolves - the government will likely take over the non-union retiree pension programs and slash pension payments and benefits. The media won’t report on it.

President Obama has, in his infinite wisdom as Supreme Leader, appointed a leftist social scientist as the auto czar. Not a car guy. Not an engineer or a corporate finance guy, but a socialist academic who’s never held a real job in his life. Edward Montgomery has never had to deliver a product on time, on budget, with repeatable quality and show a profit – not even an ice cream cone. There is no evidence that Edward Montgomery has ever changed the oil in his car, much less displayed any knowledge of automobiles or the industry. Instead, Edward Montgomery will become the most powerful automotive executive in US history so that he can preside over the ‘equitable’ distribution of money to the UAW and skilled trade unions. He’s certainly not interested in having GM or Chrysler throw off a profit, because he probably doesn’t even understand how that happens. Therefore, GM’s new board of directors, hand-picked by Mr. Montgomery, will probably be composed of radical environmentalists, labor union representatives, academics, ‘victims’ of corporate excesses and ‘community’ leaders. GM will become very much like the old Soviet Union’s state-run enterprises - cranking out sub-par goods at outrageous prices. In fact, the Democrats can probably still find some old, disgruntled Soviet apparatchiks that can show them how best to milk the system for all it’s worth.

GM and possibly Chrysler will be forced to build cars designed by bureaucrats and social activists. These vehicles will make the infamous Soviet-era Trabant look stylish by comparison. Of course, most Americans won’t buy them, prefering to pay a carbon-credit tax on a real car made elsewhere — like Japan, Korea, India or China. The Obama administration will then give these unwanted GM cars away to undeserving wards of the state, who’ll leave them lying by the roadside once they have a flat tire. And the American taxpayer will be on the hook for this entire mess.

But, it’s too easy to blame Obama and the Democrats for the mess. After all, they’re just taking advantage of a situation they didn’t create. No, that happened on Rick Wagoner’s watch, along with an entire gang of GM exec’s that just plain didn’t do their job. The UAW’s attitude is understandable to a degree - they can’t save GM even if their members worked for free. It’s not the union’s fault that GM management wasn’t looking ahead, that it wasn’t nimble enough to create a car company that could roll with the punches like a Honda or Toyota. Yes, the car business has been cruel to everyone, but Toyota lost $2 billion in 2008, while GM lost something north of $40 billion. Both firms sell about the same number of vehicles.

GM points to ‘legacy’ costs such as retiree benefits. Toyota has similar costs. Its labor force is actually older than GM’s and Japan also mandates similar retirement benefits for unionized auto workers. The money is distributed differently, but the numbers are similar. The same is true for German autoworkers who receive 80% of their working salary during retirement. And yet, both the Japanese and German automakers are in better shape than GM.

The blame is to be shared equally by GM management and UAW/skilled trades union bosses. On the part of GM management, a chronic shortage of vision and leadership allowed the company’s bureaucracy to bungle forward, oblivious to the realities of the marketplace.  On the union side, the UAW and the skilled trades unions did their level best to create work rules that hampered productivity and ballooned the cost of tooling up for a new vehicle. They were adamant about preserving jobs in order to protect that flow of dues into union coffers. Too bad it backfired on them. GM’s senior management was too timid to confront the unions and demand more cooperation. Much like the state and federal government, union bosses could not grasp the fact that more productive union workers would make the car companies more profitable and they would in turn build more manufacturing plants. Those plants would need more workers. Instead, union bosses dug in their heels and insisted on increasingly unproductive work rules and procedures that hamstrung automakers and gobbled up available cash.

Why would the unions do such a thing? It would seem short-sighted and self-destructive. Because, union workers and union bosses were firsthand witnesses to the bad decision-making emanating from GM’s executive suites. Those decisions cost them jobs and opportunities. When a new product fails, like GM’s infamous Pontiac Aztec, management doesn’t get laid off or fired. Assembly line workers do. When GM’s board of directors approves investment in a new vehicle line, executives aren’t called on the carpet when it doesn’t sell. Instead, white collar and blue collar workers are asked to make sacrifices and the auto suppliers are told to cut their prices. The automotive industry as a whole has been making sacrifices for the better part of two decades. GM’s senior management has not.

So, when GM is on the ropes, executives shouldn’t expect too much help or sympathy from the UAW or the supplier base, even though the fate of both are closely tied to the failing giant. On the political front, GM has bellyached for years about the unfair trade advantages held by imported brands. Those arguments began to fall apart when imports set up manufacturing facilities in the US while GM continued to move jobs overseas.

It’s likely that GM will go the way of Hudson, Kaiser, Studebaker, Rambler and the venerable Hupmobile. There’s nothing griven in stone that says a corporation must live forever. Big corporations are like miniature civilizations. They possess their own culture, social pecking order, rules of etiquette, ways of doing things. And like any civilization, they have a birth, a period of vibrant growth, maturity and finally, a decline followed by death or dismemberment. Younger, more aggressive corporations feed on the remains. In the end, GM’s demise may give rise to smaller, nimbler carmakers that can remain competitive in the world markets. Propped up by government, GM will simply remain a huge and costly socialist experiment, draining the country of resources that could be put to better use. Steamships and the Pony Express are gone, along with buggy whips and hoop skirts. As unpleasant as it may be in the short term, maybe it’s time for GM to ride off into the sunset. In this case, the pieces will be of greater value than the sum of the parts.

Champagne corks are popping in Detroit’s most exclusive clubs and watering holes. George W. Bush, anxious for a positive lift at the end of his presidency, skirted Congress and even his own Treasury Secretary to dole out taxpayer funds to money-hungry carmakers. For the moment, GM’s chairman and his hapless crew can hold on to their jobs, while across town Chrysler’s crippled top management breathes a sigh of relief. The $14 billion dollars is a stop-gap, a temporary plug for a sinking ship. Imagine what that $14 billion could have done in the hands of thousands of small entrepreneurs and business owners. But, that’s neither here nor there. The management and non-union staff of the domestic carmakers aren’t really going to benefit much from the handout. Neither will George Bush’s legacy or the American taxpayer.

Given that labor unions will be the single largest beneficiaries of the auto bailout, UAW president Ron Gettelfinger acted like a typical union ingrate when the handout was announced. He figuratively spat in George W. Bush’s face, defiantly announcing that the union will sacrifice absolutely nothing in exchange for the money. This in spite of the fact that Bush’s gift merely suggested some concessions. Gettelfinger went on to say that his union would revisit the deal once Obama and the new Congress were installed. This isn’t suprising. It’s not even outrageous by union standards. It’s a cancer that’s been growing for decades. And with Obama in the White House and Democrats controlling Congress, the UAW and its sister unions are poised for a comeback.

The unions have in fact given up absolutely nothing, while asking everyone else, including their own members, to make sacrifices, however modest. It’s important to understand that the union organization itself is a separate entity. UAW president Ron Gettelfinger’s salary and benefits are not being threatened. Neither are those of union local presidents, union administrators, benefits planners, money managers and other union employees. The dues-paying ‘members’ are employees of the carmakers, not the union itself. And they do need to be reminded of that occassionally. It’s not the UAW or the AFL-CIO that created their manufacturing jobs. It was a for-profit corporation.

One can always condemn the unions for their reprehensible behavior and the fact that union leadership encourages the rank and file to work as little as possible for the highest pay rate possible. But, the blame for that union attitude rests squarely with GM, Ford and Chrysler management, as does pretty much everything else that ails the auto industry. It’s the short-sighted, self-serving and chaotic management style of this insular and clannish business community that’s wreaked havoc with hundreds of supplier companies, the lives of thousands and now threatens the greater economy.

At the height of the bailout crisis just days before the Bush announcement, GM management ordered its EDS supplier to prepare a company-wide email blast that all bonuses and raises for 2009 would be cancelled. Once the Bush bailout money was announced, that email blast was cancelled. In other words, the taxpayer money would allow GM to continue with business as usual. One would think that given this is taxpayer money, those bonuses and raises would be curtailed as a responsible measure to safeguard the public’s interest. No way. That’s not how Detroit works.

GM and Chrysler will burn through the money that the labor unions allow them to keep in about 60 days. They will return to Washington for another Oscar-winning performance. One would think these captains of industry abhor the notion of groveling in front of Congress for money. Nothing could be further from the truth. Don’t assume that these guys are entrepreneurs or capitalists. They are neither. These auto execs are bureaucrats and politicians as skilled as those facing them in Congressional chambers. They don’t have the vision, the guts or the leadership skills to pull these automakers out of the mess they themselves created. They have the savvy and decision-making skills of a potted palm. And the American taxpayer is going to make sure that they, along with their union counterparts, enjoy the ride.

Appearances are deceiving. It may look like Republican senators are unwilling to help fellow Americans keep their jobs and save an ailing industry. That’s how the mainstream media outlets play the story. Inconvenient facts like Ted Kennedy abstaining or that a nearly equal number of Republicans and Democrats voted against the measure are ignored. Americans don’t need to know that. They only need to know that rich and elitist Republicans voted against it. George W. Bush, a virtual recluse soon to be evicted from the White House, is scrambling around for a few spare billion. In the end, the automakers will get their money. Democrats will declare victory. Union members will continue to hate George W. Bush, dutifully following their leaders. The media will continue to bash Republicans even though most of them wanted to see a successful bailout bill.

But then, what about the money? $14 billion or $36 billion, the number really doesn’t matter, is basically a transfer payment to the UAW and skilled trade unions. GM and Chrysler execs will take a small cut for distributing the money in the form of paychecks. Union employees of GM and Chrysler will accept those paychecks, pay 35% in federal, state and local taxes, and then cough up another 4% to their respective unions. Who exactly benefited from this? Why government at all levels, of course. Taxpayer money given to the automakers comes back in the form of income, excise and sales tax paid by auto workers. Secondly, the union is guaranteed its income in the form of dues and management fees for retirement contributions and benefits taken from auto workers’ paychecks. And then, of course, auto execs can expect a little something under the Christmas tree this year for their heart-wrenching performance at the hearings.

The bailout money won’t be used to make the automakers more competitive, more stylish, more valuable or more environmentally friendly. The bailout will allow automakers and the labor unions to continue on as before, except that the government is now covering part of the horrendous operating losses. In order to be ‘responsible’ with taxpayer money, government bureaucrats will demand operating efficiencies from the car companies. And in response, the bureaucrats running those car companies will announce major cost-cutting programs designed to squeeze money out of everything and everyone.

Who gets hurt? Those who can least afford it. Stockholders have already been hammered, including GM retirees who held onto GM shares as part of their retirement programs. Banks and finance companies that have extended credit to GM and Chrysler are in a constant turmoil, re-stacking the loans and turning over paper so they don’t have to officially call in loans or notify the government that both firms are falling down on their obligations. GM and Chrysler employees who don’t belong to a union will take an awful drubbing. Many have already lost their jobs. The ones who remain are having an equally tough time. Just because GM and Chrysler have shed 20% of their white collar workforce over the last two years doesn’t mean that the work goes away. Designers, engineers, technicians, middle management and various specialists are working 50-60 hour work weeks, shouldering the load of their departed colleagues. Some are routinely working 80 hour weeks, frantically trying to keep ahead of a growing workload.

But those who suffer most and will suffer even more are the automotive suppliers - their shareholders, bondholders, managers and employees. And it’s the employees that hurt most. Unlike the major automakers, employees of auto suppliers are in a constant state of retrenching and readjusting their standard of living - downward. When auto executives demand better pricing for a tire, a piece of plastic or a radiator, the money comes right out of the pockets of supplier employees in the form of pay or benefit cuts, and/or working longer hours for the same net pay. If the supplier employees are themselves union members, the blow isn’t as severe, but the hurt is then pushed disproportionately onto unskilled, non-union employees. This is happening not because auto supplier managers are exploiting their workers. It’s that after a decade or more of cost-cutting demands from automakers, there’s no place else to go. Every ounce of fat has been squeezed out of these supplier companies.  Ironically, these supplier jobs are the ones that Washington claims to be protecting, along with automaker jobs. What will in fact happen is another round of pay and benefit cuts for supplier employees, or the plants close and the jobs move overseas.

The managers running the auto supplier firms aren’t doing much better than their employees. Fifteen years of aggressive cost-cutting and brutal global competition has left many auto suppliers in a fragile state - razor thin margins, shaky balance sheets and little, if any, working capital. The Detroit 3 have foisted the costs of their poor decision-making and inefficient business practices onto their supplier base, which is groaning under the load. The net result is that a single bankruptcy of a major automotive supplier can stop the flow of critical parts and supplies to an auto assembly line, shutting down production. If there are no vehicles to sell, there is no cash flow. No cash flow means nobody gets paid. Everything starts to unravel.

But there is a bright spot in this dark and dreary situation - only, it’s not in Detroit.  Ask any automotive supplier to name their most profitable, stable and problem-free account, and they’ll whisper the name of a Japanese, German or Korean manufacturer with plants in the US. Yes, the transplants are staying afloat and they’re fostering the kind of business relationships that allow their suppliers to do so, as well. Even in the midst of an economic free-fall, they’re doing better than their American competitors. Hhhmm. How could that be?