Back in the days when socialism was still something people believed in, the most wild-eyed radicals had a vision: Someday, after the revolution, the "means of production," including the auto factories and the companies themselves, would be owned by the "people" -- the government and the unions.
So how is this for irony: General Motors, once the largest corporation in the world, the Cold War symbol of triumphant capitalism, is now proposing that the government become its majority owner -- with the United Auto Workers union owning most of the rest.
Chrysler's proposal is that the company will be owned 55 percent by the UAW, with most of the rest owned by the Italian automaker Fiat, who will actually control and run what was once the quintessentially blue-collar American company.
And if that happens, it will only have been possible because of President Obama's offer to throw in a further "dowry" of $6 billion to smooth the marriage with Fiat. Chrysler has, of course, only avoided bankruptcy this long because of $4.5 billion in "loans" since Christmas. As most Americans know, that is a handful of lug nuts compared to General Motors, which has gotten $15.4 billion.
General Motors, in fact, wants another $11.6 billion to help it stay alive, in return for which the government will get at least a 50 percent stake in the company. The specter of a government-owned auto company is raising all sorts of eyebrows, especially among those who remember what a disaster government ownership of automakers like British Leyland turned out to be in Europe.
Best guess, and hints from President Obama, is that Washington intends to sell their share off, when and if the automakers are healthy enough to attract investors again.
Whether General Motors can avoid bankruptcy is still an open question, although the odds of that seem to have gotten better over the past week, with the unveiling of a reorganization plan that seems to have the Obama administration's tacit approval.
Many of the smaller bondholders are balking at the proposal, which would swap the money GM owes them for an equity stake in what is still a very shaky enterprise. But it is hard to see why they might think they would do better if the firm goes bankrupt.
Even if General Motors does survive, it is still by no means certain when, or if, the stripped-down company will become profitable again. The new GM will consist of Chevrolet, Cadillac, GMC and Buick, which has bizarrely become the car of choice in China.
And there is another elephant in the room nobody wants to talk about: the fate of retiree pensions and health care. Under the deal worked out with the union, GM will be putting far less into the pension and health care funds than before -- when there were already concerns that the plans were underfunded.
This is largely why the United Auto Workers are being given a 39 percent equity stake in the remodeled company.
What is certain is that, brave or not, we are entering a new world here. More than half a century ago, Charles Wilson, a former GM president who had become U.S. Secretary of Defense, famously said "What's good for the country is good for General Motors, and vice-versa." One has to wonder if he would say that now.
Budget nightmare update
Last week in this column, I took Michigan lawmakers to task for not moving faster to deal with the current budget deficit, which they were estimating at $785 million.
This is, mind you, for the fiscal year ending Sept. 30, in which most of the money already has been spent. I also suggested final deficit numbers were likely to be higher than that.
Even I was shocked by the actual new estimates that state leaders released Wednesday. The deficit is now thought to be $1.2 billion, or $1.5 billion if you count the school aid fund.
The governor's office said she would issue an executive order this coming Tuesday making some cuts, but indications were that they are nowhere near the amount needed. Republicans, meanwhile, have called loudly for spending restraints, but have been slow to suggest anything other than some small-scale and largely cosmetic corrections reforms, such as privatizing some prison services.
The longer Lansing dithers, the more difficult, draconian and ill-advised the eventual last-minute cuts are apt to be. In fact, though everybody says that education is the one area they don't want to cut, it is likely that cuts at least to higher ed, followed by massive tuition increases, are something that may be impossible to avoid.
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