My Solution to the Failure of GM and the Auto Makers

I think we should solve the problem of the auto industry by creating a Silicon Valley for auto making.  GM, Ford, and other troubled auto makers should take a "packaged bankruptcy" that allows the pensions and healthcare of GM workers to be separated from the company into a government administered trust.  This will take care of the innocent bystanders of this failure of an industry and keep them out of the fray.

Then, GM should be broken up into smaller companies that produce the components of the cars they "used" to build in house.  These smaller companies would be on their own and structured to operate within their cash flow.  Their job would be to continue to produce a component of the car manufacturing process. 

In conjunction with the break up, the Government should create a stimulus package for the Detroit area incenting entrepreneurs to create small car companies using the components produced by the old GM operating companies.  This could foster growth similar to the growth we saw in Silicon Valley (Hardware manufacturing giving way to software development giving way to web development, et al).   Companies like Tesla and others could create their own ecosystems out of the carcass of the old GM.  This ultimately would save more GM jobs and put more ex-auto workers back to work than any auto industry bail out would.

Ultimately the real winners would be the US.  Because we will have created a sustainable, grow-able ecosystem of automobile making once again.  Opening up avenues for the entrepreneur to thrive or fail on his or her own merits while saving what is best about our current auto industry as the foundation for the next phase of growth.

The auto companies put the lid on growth for all these years.  Entrepreneurs like Tucker, and others were crushed by their need to maintain the status quo.  It makes sense that a new, more sustainable industry should grow from it's own ashes.