Timing is Everything

It is sad to read some of the comments by General Motors employees after the announcement that over the next three years 25,000 jobs (about 23 percent of its work force) will be cut and several North American factories will be closed.

Barney Morgan, who has worked for G.M. for 28 years, said he was used to watching the number of workers around him shrink. At G.M.'s Flint Metal Center, where Mr. Morgan is a crane operator, the number of jobs is down about a third since 1998, when the plant had close to 3,400 employees. "We're downsizing everywhere," Mr. Morgan added. "What used to take 15 people to run now takes 6 or 7."

"It's not like it used to be," said Bridget Campbell, 49, a welder at Flint Metal who has worked for G.M. for 27 years. "When I hired in, just about everybody could get a job. Nowadays, you have to know somebody to get in."

Nice, average people, Barney and Bridget seem to have been born about 30 years too late. Had they been born earlier, things would be much different for them today - they would have been retired for some time now, and would have already been the recipients of generous pension and medical benefits provided by GM during their golden years.

Even during the last few years when GM was borrowing billions of dollars to make ends meet, and when what profits they were able to generate had more to do with finance than manufacturing, they kept their promises to their retirees - at a cost of $1500 per vehicle sold.


Now the fate of both the employees and the retirees is unclear. If GM goes the way of Bethlehem Steel, pensioners will be in for quite a surprise when the PBGC (Pension Benefit Guarantee Corporation) starts issuing their monthly checks.

In many ways, GM is just a smaller version of the entire United States. Though they were once great, their business model is now fundamentally flawed, and they have been mismanaged recently - the entire organization has been kept afloat during recent years, only through more and more debt.

Like social security and medicare recipients will find out sometime in the future, timing is everything.