WASHINGTON -- General Motors' plant closings will no doubt deepen America's pessimism about the U.S. economy, even as other automakers here are building plants and selling cars like crazy.
The sheer size of this mega-corporation, still a major automaker, and the magnitude of its cutbacks -- laying off 30,000 workers and shutting all or part of 12 manufacturing plants -- is enough to cast a pall of gloom over an economy still trying to shake off voter anxieties about its recovery.
But this is a huge, highly diversified economy that produces $12 trillion worth of goods and services annually and will certainly survive GM's latest downsizing -- as long as we pursue the kind of capital investment, savings and tax-cut incentives that have made us one of the strongest economies in the world.
There should have been no surprise about GM's announcement. The company that once manufactured more than half of all the cars and trucks sold in the United States has seen its market share shrivel to 26 percent and has more than $4 billion in losses in North America alone. Its stock value has plunged. Its debt rating is at near junk-bond status.
GM has never been able to shake its image as an overweight, slow-moving behemoth whose huge bureaucracy prevented it from competing with its slimmer, quicker and far-more-efficient rivals. To its credit, GM has instituted changes in its management and plant operations, eliminating overpadded middle management that took forever to make its marketing decisions, while its fleeter rivals, Toyota and Honda, were outracing them.
So, last week, GM said it will shut down six assembly plants in Michigan, Oklahoma, Tennessee, Georgia, Ohio and Ontario, Canada, and will close or shrink another half-dozen parts plants elsewhere by 2008.
It's not that Americans are buying fewer cars or that the U.S. auto industry is shrinking.
"Sales in the United States have continued to surge for the largest Japanese automakers, which include Toyota, Honda and Nissan Motor Co.," Washington Post writer Sholnn Freeman reported last week.
We're buying more cars and trucks and more vehicle plants are being built in America -- there just not GM's.
Toyota, for example, seems to announce a new plant opening here about every other year. Honda can't seem to keep up with consumer demand for its most popular models. These are well-engineered cars made in America by American workers.
"In recent years, the Japanese have consistently beaten GM, Ford and Chrysler to the market in growing vehicle segments, such as soft-riding car-like SUVs and gas-electric hybrids," the Post reported.
Today's the Day: Scots to Vote For Whether or Not to Secede From the United Kingdom | Christine Rousselle
Lt. Col. Oliver North: Someone Needs to Tell The Truth, Obama's ISIS Strategy is Mission Impossible | Katie Pavlich
Townhall Magazine's October Issue Preview: Obamacare's Illegal Insurance Company Bailout | Conn Carroll