Lay off GM, it’s adapting to survive

Trump should applaud companies that innovate

General Motors’ plan to close plants in Michigan, Ohio and Maryland (along with one in Canada) is proving the old adage that politics make strange bedfellows. In this case, it has put liberals and President Donald Trump on the same page.

American taxpayers bailed out GM a decade ago, they remind us, and this is what they do? Why, it’s just corporate greed and betrayal, they thunder.

That’s a worthy debate, yet the bailout was a decade ago — an eon in these fast-moving times. In the 10 years since, everything has changed. The market has changed, the economics have changed, consumer preferences have changed. Three-quarters of vehicles sold by GM today are trucks and SUVs, a big jump from just a few years ago, while sales of sedans and smaller cars have plunged — changes “fueled” in no small part by low gas prices and higher mileage standards. The market for electric and self-driving vehicles, meanwhile, is expected to grow rapidly in the coming years.

Corporate nostalgia is one thing, economic survival is another. Companies must always look to the future, anticipate where the market is headed, and position themselves accordingly. GM CEO Mary Barra is right when she says, “We are taking these actions now while the company and the economy are strong to stay in front of a fastchanging market.”

Political trouble, economic gain

This type of market disruption is always painful for some, but it is how society as a whole advances — inch by painful inch.

Trump and other politicians are understandably unhappy whenever a factory closes and jobs are lost. Trump, with his what’s-in-it-for-me approach, rightly sees this as political trouble. He has made a big show of bragging — including in Ohio — that manufacturing jobs were coming back; you can expect his boasts to be used against him two years from now.

And yet elected officials must also encourage — and help — companies to innovate and take risks, for this is how future industries, jobs and wealth are created. Americans aren’t buying Impalas, LaCrosses and Cruzes anymore, so why should GM squander precious resources making them? Doesn’t it make sense to shift resources to building future products people will want?

Just as Henry Ford’s Model T rendered the horse and buggy irrelevant in the early 20th century, the shift toward electric and self-driving vehicles will bring huge changes to the U.S. economy — leaving many of today’s products in the dust. If you think GM should keep making antiquated products, than you must like rotary phones, VCRs and the Walkman. Or, if you’re the president, perhaps you think the future is in coal.

Good stewardship requires risk

Speaking of Ford, it recently bought a scooter company. What’s a car company doing getting into the scooter business? you might ask. Ford’s answer: We’re in the mobility business of helping people get from point A to point B. Sometimes that’s cars, sometimes it’s not.

Companies are adjusting to changing times; workers must, too. Federal, state and local governments can play a role with job training and education. In the three states where GM will close plants, the economy is strong and unemployment rates are low: 3.9 percent in Michigan, 4.6 percent in Ohio and 4.1 percent in Maryland.

Hopefully, we can help those affected move on to brighter futures. But propping them up so they can produce goods that no one is buying is bad economic stewardship. Innovation and risk-taking, that’s the way forward.