General Motors is on the verge of bankruptcy and liquidation. The ineptitude and greed of his management, his board and his union are finally catching up with the former king of the auto industry.

In liquidation, foreign companies will buy several of its most modern plants. Any asset will be bought for pennies on the dollar. Most of its workforce of white and blue collar workers will be unemployed. The domino effect on suppliers, vendors, and customers will be ruinous. A liquidation will degenerate into a national depression.

The management has repeatedly tried to save this legendary company, but it did not have the vision, the capabilities and the financial backing. The GM board has been the main cause of the slow death of this company. In the face of continuing losses, the board insisted on healthy quarterly dividends. Not making enough cash and paying dividends is stumbling towards the abyss. Any sudden drop in sales or margins drives the company into insolvency.

GM’s top management and its board of directors made a fatal miscalculation; they bet that Congress will never allow GM to go bankrupt. This bet was not unwise. After all, the US Congress had saved Chrysler a few decades ago. When the US financial crisis threatened global markets with collapse, the US Congress supported rampant fraud and gambling in the financial industry in grand style. AIG, one of those gambling insurance companies, received a huge financial rescue package. The Big Three could continue their business for years with a similar gift.

During the last decades, the automotive industry has been under constant attack from the competition, from its investors and from the government. GM management was unable to defend against them. GM lost a lot of its market share, investors ransacked its cash, and the US government told the auto industry how to design cars.

The US government’s ill-advised meddling in fuel efficiency and emissions has cost the auto industry dearly. Huge amounts of research funds were spent to comply with marginally effective government regulations. The US Congress deserves a lot of blame for legislating very expensive and wasteful solutions to previously unresolved technical problems.

When Waggoner and his compatriots came to claim their bailout package, they were admonished by Congress for flying to Washington on corporate jets. They may have realized for the first time that their future was much more precarious than they expected after seeing the generous, incompetent and ineffective bailout of the financial industry just weeks before.

After assigning blame, it’s time to look at possible solutions. The liquidation of General Motors will do a lot of damage in the most inopportune period in the economic history of the United States. is unacceptable Giving massive loans to GM is also not the right solution. Instead, GM needs a complete reorganization, new management, a new board of directors, new products, and a competitive wage and benefit structure for its blue and white collar workers.

Going through bankruptcy proceedings is a viable approach. Unquestionably, bankruptcy is a difficult road. GM’s image will be severely damaged and future customers may be concerned about car warranties and used car values. Future sales will certainly take a hit. Bankruptcy takes a long time and will further damage the company and the crippled US economy.

A better way is an offer by the US government to buy all of the company’s assets through a newly formed, government-organized, and financed automobile corporation. GM stock is cheap. Its shares are worth two billion dollars; buying the company is feasible. The new company can agree to honor ongoing transactions, guarantees for future products can be issued and honored, pension obligations can be settled permanently, and the public would be assured of the future viability of the product. A fresh and unrestricted start-up would be guaranteed.

In addition, the United States Congress must consider strategic and security aspects. No one else can muster the legislative and financial wherewithal to create a massive, highly competitive, and critically needed new manufacturing entity. The wide range of existing products and production facilities and the huge, sunk and unrecoverable investments must be harnessed to create a rejuvenated company that is lean, mean and efficient. This company is to be managed to rebuild the value of the shares for future recovery of government funds through the sale of shares held by the government.

Above all, the new GM needs an infusion of capable management, cash, new products, and a board made up of all the company’s new shareholders. Management systems for sales, production, finance and other complete requirements are in place and can be used to start the business immediately. The company can quickly become competitive after a thorough cleanup of unearned preferences, outdated policies, and inefficient practices.

America cannot afford to lose the millions of manufacturing jobs that will result from GM closing. There is no cheaper way to preserve and create jobs than to reorganize the old leaderless GM and get going with a newly energized and innovative successor corporation. It would be crazy to let a company with product lines like Corvette, Cadillac, and GMC go out of business. The costs and losses of a failure are incomparably greater than the amount of temporary financial assistance to a reorganized and competitive successor company.

The United States cannot afford another financial meltdown while we still watch in dismay and amazement at the mismanagement of Congress’s $700 billion bailout attempt.

Saving GM will be good for America, Ford and Chrysler!