From The Age – Business Day:
A STEADY trickle of gold rings bearing the letters “GM” has found its way into the Main Street Pawn Shop in the heart of the scruffy carmaking city of Pontiac.
GM veterans have been pawning once treasured company rewards in distress or disgust at the state of the biggest American car manufacturer, which is expected to declare itself bankrupt tomorrow.
“They have such a bad taste in their mouths that they don’t want them,” says Shelby Berger, co-manager of the family-owned shop. Mr Berger says he has handled more than 25 rings since Detroit’s motor industry went into a tailspin.
In a practice long since abandoned, GM awarded the ornaments for sales excellence, loyal service or for graduation from the company’s engineering academy. They now fetch more than $US200 each. Mr Berger’s pawn shop is one of the only prospering businesses in Pontiac, a city of 65,000 people 30 minutes’ drive north of Detroit. The area is dominated by an 83-year-old GM truck plant, which has shrunk to a single shift and is to stand idle for much of the summer as the carmaker freezes production lines to save cash.
“It’s affected the pawn industry in a positive way but we’re locals so it hurts to see our neighbors in a financial crisis,” says Mr Berger. Behind his modest storefront is a trove of hard-earned possessions. The most hard-up come in with single compact discs, which can be enough to generate a $5 advance.
GM’s blue-collar workforce in the US, which numbered 113,000 three years ago, is due to shrink to 38,000 by 2011. Under bankruptcy, the US Government is set to take a stake of as much as 70 per cent, with unions and bondholders owning the rest of the once-proud manufacturer, which owns brands including Chevrolet, Cadillac, Opel and Saab.