As president of General Motors when Eisenhower tapped him to become secretary of defense in 1953, “Engine Charlie” Wilson voiced at his Senate confirmation hearing what was then the conventional view. When asked whether he could make a decision in the interest of the U.S. that was adverse to the interest of GM, he said he could.
Then he reassured them that such a conflict would never arise. “I cannot conceive of one because for years I thought what was good for our country was good for General Motors, and vice versa. Our company is too big. It goes with the welfare of the country.”
Wilson was only slightly exaggerating. At the time, the fate of GM was inextricably linked to that of the nation. In 1953, GM was the world’s biggest manufacturer, the symbol of U.S. economic might. It generated 3 percent of U.S. gross national product. GM’s expansion in the 1950s was credited with stalling a business slump. It was also America’s largest employer, with over 460,000 employees. Its blue-collar workers received (in today's dollars) $60 an hour that year in wages and benefits.
Today, Wal-Mart is America’s largest employer, the majority of whose employees receive just over $10 an hour. And General Motors is filing for bankruptcy. Wilson’s reassuring words in 1953 now have an ironic twist. There will be little difference between what is good for America and for GM because it is soon to be owned by U.S. taxpayers who have forked out more than $60 billion to buy it.
But why would U.S. taxpayers want to own today’s GM?
The answer, after the jump.