Thursday, September 10, 2009

Will GM Become a Not-for-Profit?

Not-for-profits are the basis upon which eleemosynary activities take place. Most of these nonprofits, known as 501(c)(3) organizations, are corporations created to support a particular cause. However, with the downturn in the economy, many companies have become de facto not-for-profits, even though they have yet to draft the requisite mission statements to replace their original for-profit goals.

While Citibank did show profits in the last quarter, they have developed a pattern that puts them squarely in the not-for-profit category. Bank of America became a candidate for not-for-profit status when it acquired Merrill Lynch. Bear Stearns might have been rescued from the jaws of JP Morgan Chase when it was on the verge of collapse, and Lehman Brothers might have avoided its fall, if only these two dinosaurs had quit the investment banking business and declared themselves charities.

Though shares in the insurance giant AIG, whose London office singlehandedly engineered the creation of the credit default swaps that brought down the American economy, are trading briskly, this shouldn’t prevent AIG’s board from declaring it a not-for-profit. There is no doubt that AIG runs enough executive dining rooms to allow it to become one of the world’s great soup kitchens. Didn’t Maurice Greenberg, the ousted AIG executive who so vituperatively argued for the competency of his decisions, once say, “Let them eat brioche”?

General Motors would make a great not-for-profit, as would Chrysler. The only question is, would these two automotive giants continue to manufacture cars, or would their assembly lines be better used to produce avant-garde plays in nonprofit venues like the Brooklyn Academy of Music? Even if the assembly line is not a proscenium, who’s to say it couldn’t house a theater? We already have theater in the round; the GM plant at Ypsilanti would be a perfect location for theater on the belt.

Who knows what wacky Wachovia will be when it grows up? Can we ever forget that Wells Fargo was once a stagecoach company? What does that mean in terms of its potential viability as a 501(c)(3)? Quite simply it means that once they retire from the business of making money, they’ll have something to fall back on.

Goldman Sachs and JP Morgan need not feel like they are being left out. Sure, they have paid back all their stimulus dollars and are making money hand over fist, but that doesn’t mean that someday they won’t have a chance to find a hallowed place in the not-for-profit world.

As the recent crisis stock market crisis showed, anything can happen, usually overnight. That’s what makes America great.

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