Robert X. Cringely: Where’s Engine Charlie?

if Bob Cringely is this worried, we ought to be too… LINK
by Robert X. Cringely

First Corvette 1953

First Corvette 1953

Charles Erwin Wilson, known as “Engine Charlie,” was president of General Motors and later Secretary of Defense under President Dwight Eisenhower. He is broadly — and incorrectly — quoted as having said during his Senate confirmation hearing “what’s good for General Motors is good for America.” His actual quote is more nuanced: “For years I thought what was good for our country was good for General Motors and vice versa.”

This is a fascinating bit of history because we aren’t talking about today’s General Motors or even today’s United States of America but the GM and the USA of 1953 — a time when both were leading the world. Yet look at the equivocation in Charlie’s statement — I thought, not I think.

Look, too, at our biggest companies today like Apple, Exxon-Mobil, Google, Microsoft, General Electric, and even, yes, General Motors. Can we still maintain, as Engine Charlie kinda/sorta did, that what’s good for those companies is good for America and vice versa?”

No, we can’t.

A tax policy that has companies diverting revenue to other countries with lower taxes and then holding trillions in cash offshore to further avoid taxes may be good for the companies, but it isn’t good for America.

An immigration policy based on lying about shortages of technical talent in order to reduce real wages and longer-term costs is good for the companies but it isn’t good for America.

That’s what’s happening right now with S.744, a bad bill that will give a green card to every foreign STEM student receiving a master’s degree or higher — this at a time when less than 50 percent of U.S.-born STEM graduates are finding employment in their fields of study.

And sometimes what happens isn’t good for the companies or America. This latter point requires some elaboration.

Again, let’s stick with General Motors. The popular management mantra for nearly every public company, including GM, is that management should “increase shareholder value.” The main point, indeed the only point, we’re told, of running a public company is to make the stock price go up. Anything that doesn’t contribute to increased earnings, which are supposed to translate into higher stock prices, isn’t worth doing. And so pension plans are looted and communities abandoned without a second thought.

Yet following the financial meltdown of 2008, General Motors went bankrupt, was eventually saved after a fashion by a government bailout, and what became of shareholder value? It disappeared completely, those shareholders who hung on losing everything as the value of GM shares went to zero and the company was delisted from trading. Shareholders, those very folk whose value was above all supposed to have been increased, lost everything.

So while the function of the public corporation is supposed to be increasing shareholder value, there are evidently other underlying values that are even greater. In the case of General Motors circa 2009, that greater value lay in continuing to service the company’s debt while also rewarding GM management.

What was ultimately protected in 2009 were the banks and the executives and not much else. Despite the vaunted firing of GM CEO Rick Wagoner after his mistake of flying in a company jet to Washington, DC and not driving, Wagoner still walked away with a package worth $10 million. If that doesn’t sound like much retirement money for a titan of industry remember that during Wagoner’s tenure as CEO GM had a cumulative operating loss of $85 billion.

Rick Wagoner, who came up at GM through the Chief Financial Officer’s office, remember, lost approximately $30 million for GM every day he was CEO.

And the guy was CEO for nine years.

Now you may wonder why I’m on this particular rant and why General Motors seems to be in the middle of it? GM is in this case the poster child for a greater American malaise that I have been worrying about, which I’d characterize as the looting of America.

It’s not a question of whether America’s best days are past or can it’s greatness be regained, the problem with America is the people who think they are in charge have simply given up. Worse still, they appear to be too stupid to even know that’s what they’ve done.

The political wrangling between national parties today reminds me of action heroes and villains (it doesn’t matter who is who in this case) fighting atop a moving train. No matter who wins the fight the train is still moving and as long as the fight continues the train will never stop.

What if in all this wrestling the train is going somewhere really terrible but the combatants, trapped in traditional enmity compounded by new-fangled grudges and excuses, don’t even know it? That’s how Washington feels today.

The parasites believe they are in control of the host. The liars, cheaters, bullies, con artists, misguided ideologues and former student council presidents who have been fighting for control of this nation since the 1960s have now thrown away enough treasure and eaten enough seed corn that we as a nation are nearing a tipping point. We may well be past that tipping point. And the way our leaders behave, they assume we are past it.

Look at the later days of any empire. There’s still wealth and grandeur, but there’s also corruption. The court becomes interested more in intrigue than substance not because intrigue is more fun but because substance is viewed as being out of reach.

That’s the way it seems today in our government and most others, where we spend a lot of time arguing and very little time actually getting things done. Debts rise and money is thrown away for what? Our leaders have forgotten what cooperation and communication are even for.

Which brings us back to Charles Wilson, who as Secretary of Defense trying to downsize the military-industrial complex after the Korean War said, “the price of progress is trouble, and I must be making lots of progress.”

Where are you, Engine Charlie? We need you.

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