Former General Motors President Charles "Engine Charlie" Wilson never said, "What's good for General Motors is good for the country" even though the oft-repeated quote has stuck with him since 1953.
During a hearing about his appointment as U.S. defense secretary, Wilson was queried on his integrity by New Jersey Sen. Robert Hendrickson.
Wilson replied that for years he thought, "what was good for our country was good for General Motors and vice versa."
Now, the industrial icon is either weak enough to file for Chapter 11 bankruptcy protection or strong enough to buy ailing Chrysler, depending on whom you believe. Yesterday, Wall Street was cheering reports that GM talked with Chrysler about buying its smaller rival.
GM's stock soared 32 percent. GM would only say it routinely discusses "issues of mutual interest with other automakers."
Some analysts said they doubt GM would buy Chrysler because it would have to take on the company's dealers, including underperforming stores that are hard to jettison.
"The largest small business in every community is an auto dealer, and they have undue influence in state legislatures," said George Hoffer, professor of economics at Virginia Commonwealth University.
Investors apparently think the company is in better shape than it was Friday when shares slumped to the lowest level in half a century after a Standard & Poor's analyst said GM may have to seek protection from creditors. GM put out a statement saying bankruptcy is not an option.
Still, the question remains, does GM still matter to the U.S. economy?
The automaker has 43,000 suppliers, from janitorial firms to upholstery makers, said Donald Mazzella, chief operating officer of Information Strategies in Ridgefield.
GM and other domestic automakers are hurting because they relied too heavily on gas-guzzling but profitable trucks, and were unprepared when customers wanted more fuel-efficient cars as gas prices hit $4 a gallon this summer. GM also is weighed down by high pension costs as well as the credit crisis, which is preventing some customers from buying a car.
"It still sells more cars than all but one manufacturer (Toyota) and touches 71 percent of all communities in the United States through its suppliers and dealers," he said.
GM has been under attack in recent days by short sellers, said Marc Scheinman, professor of marketing at Pace University's Lubin School of Business in New York.
"These people are looking for blood," he said. "GM is vitally important and psychologically important to the economy."
Scheinman points out other automakers, including Honda and Toyota, posted sharp sales declines last month.
U.S. auto sales for September plunged to less than a million vehicles. Sales for last month tumbled 26.6 percent, to 964,873 for the worst showing since 1993.
GM is hardly the industrial powerhouse it was in the 1960s when it controlled 60 percent of the nation's auto market, as its market share has plummeted to around 22 percent. The market cap of GM has dropped to $3.8 billion.
But the company still is a big employer with 263,000 workers worldwide and 6,500 franchised car dealers who employ about 100 workers each, according to estimates from analysts and the company.
There are a few hundred GM dealers in New Jersey, said Sheldon Sandler, chief executive of Bel Air Partners, a Skillman-based consulting firm that advises auto dealers.
"GM dealers employ thousands of people in New Jersey," he said.
Customers are having a hard time getting loans because of the credit squeeze, said John Sternal, vice president of marketing and communication for LeaseTrader, a Florida website that allows consumers to swap leases.
"It's harder to get a loan today than it was two years ago," he said. "Dealers are requiring customers to put down more of a down payment."
Domestic automakers such as GM also have a credibility problem with young buyers, even though the automaker has one of the best lineups it has ever fielded, experts said.
"I don't see kids graduating from school and saying, I have to have XYZ car," said Fariborz Ghadar, director of the center for global business studies at Penn State University. "I do see them wanting an iPod or a new computer."
This story posted by LeaseTrader.com, the automotive service company that lets people transfer out of their Car Leases early. If you're looking to swap a lease or transfer out of your car lease, please visit www.leasetrader.com