DETROIT IS IN a fix. Its identity as the American city that churns out automobiles is at stake. With Chrysler already filing for Chapter 11 bankruptcy protection last week, General Motors is likely to follow suit.
The industry as a whole should not be allowed to fall. Bankruptcy will put a damper on consumer confidence and demand for vehicles. Its trickle-down effect will impact the manufacturing industry worldwide.
The solution lies in spending reform. President Obama’s administration should come up with a reform package for the automobile industry, by pumping in cash and incentives, for bringing around a boom in demand. General Motors is a consumer-facing company, whose success or failure is in the hands of millions of Americans.
The right business environment and the government’s prudent role can help thwart this crisis.