What, by contrast, should we demand from GM in return for our largesse? I don't think we have any legislators or regulators with the experience and flair to design new cars or oversee the marketing program, manage the dealer network or decide which lines to cut or gut rehab. We'll have to depend on management to do this. And the management that will be in charge is going to be, in essence, the same management that screwed things up.

Oh, we can replace the people at the top, if we want (it would probably be a good idea, but I don't know how it would play politically). But American business writing considerably overstates the value of a CEO. Not that being a CEO is easy, or that they don't do valuable work; I venture to say that 100% of the commentators who think that running a major company is a matter of riding around on the corporate jet and stealing from the workers and shareholders would be surprised at how quickly the company sank under them if they were thrust into that cushy sinecure. But while a bad CEO can ruin a good company, it is not necessarily the case that a good CEO can save a bad one.

Big organizations are like ocean liners; they turn slowly, if at all. Corporate culture is simply an amazingly powerful thing, almost always beyond the ability of one man (or woman) to change. I have spoken to people at organizations that replaced two thirds of their staff in a buyout, and nonetheless found the old culture running the place rather than the new, dynamic environment they'd hoped to create. A very small cadre of old workers can perpetuate the old culture surprisingly well, because they're united, while the new people coming in have no common culture to bring against the old guard.

Too, CEOs at failing companies are often operating under more legacy constraints than they are given credit for. One often hears people rail against the UAW when talking about the auto industry; more rarely do you hear about the supplier network, the dealer network, and the politicians at local, state, and federal levels, all of whom exert considerable leverage over Big Three CEOs.

Congress, or some regulator, has no ability to fix the corporate culture that failed in the first place. No matter how many executives you fire, the middle management, the engineers and marketers and purchasing agents and sales force, will stay the same. We don't have anywhere else to recruit a whole new workforce from, even for a stripped down company. Even if we were going to go outside the industry and get new people, how on earthy would you persuade them to move to Detroit? Maybe you could do it by throwing money at them--but can you imagine the reaction from Congress if the new Big Three leadership proposed raising management salaries by 30%?

Indeed, a bailout will mute the one thing that sometimes does turn around dysfunctional management: the shock value of failure. Failure is nature's way of saying "don't do that anymore!" We're whiting that out and replacing it with "Keep going!"