Matt Yglesias, responding to the automotive bailout debate, argues that it does:

What I find interesting, however, is not so much how irrational it is to attribute nationality to a business enterprise but how much nationality really does seem to matter. For example, the oil business is an global business. And the six “supermajor” firms are all global firms. But the CEO of Royal Dutch/Shell is Dutch. The CEO of Total is French. The CEO of BP is British. And the CEOs of ConocoPhillips and ExxonMobil are Americans. It’s a bit hard to understand why a competitive international labor market would work out that way. And beyond CEO nationality, local norms seem to make a big difference. The CEO of Total earns way less money than the CEOs of the other supermajors and to a first approximation the reason is that he’s French, and French CEOs just don’t get paid very well. More broadly, European and Japanese executives earn less money than American executives, with British executives in the middle. I recall that one of the issues with the DaimlerChrysler merger was that the executive pay scales were totally out of whack.

Beyond CEOs, Nestle has 15 directors. Of them one is Indian, one is Swiss/American, seven are Swiss, and the rest are from other European countries. But there’s nothing especially “European”—and certainly nothing Swiss—about the company’s actual operations. They earn a lot of money in Europe, but the majority of their revenue is from outside of Europe, and there’s production all over the world. It’s also totally normal for large multinational firms to be disproportionately owned by shareholders located in their “home country” and home continent.

Corporate nationality, in other words, doesn’t matter. But it seems as if it actually does. And for somewhat mysterious reasons.

Reasonable points all. (BTW, this is a huge deal in Canada, maybe even more so than in the U.S.).

But GM and Chrysler had U.S. management and ran their companies into the ground. Toyota, Honda, and the transplants have created jobs in America. Nationality cuts several ways.

Some time ago, when I was studying the globalization of the automotive industry and the rise of off-shore transplants, I discovered something interesting. U.S. and European companies all said it was much easier to set up cutting-edge plants outside their home company. New greenfield plants could be built from scratch, filled with new equipment, laid out flexibly, and staffed with “fresh” managers and workers. Older plants back home suffered less from being in old buildings but from built-up and near-impossible-to-change organizational structures and relationships.

Seems to me the real issue isn’t nationality of ownership or management but its quality. From an economic development perspective, I’d much rather encourage companies and plants with great management to invest and develop in my country or location than to protect and shield ones owned by my far less capable compatriots.

UPDATE: The governments of Canada and Ontario apparently now own a two percent equity stake in Chrysler, according the Conor Clarke of The Atlantic who notes: ”Chrysler is going to become part of an Italian car company. And it’s doing so with Canadian dollars”

GM workers’ significant concessions (given in the hopes of keeping GM afloat) may go down as a key turning point in the history of the North American capitalist economy and society. Although tension remains, the changing tone of union-management discussion has been noticeable as both finally recognize the challenges their industry faces – and that their long-standing ideological battles are not helpful.

Having employees and employers at odds with each other in any organization is counterproductive – literally, it’s a productivity sink. Every few years or months, the threat of a strike creates new friction and tension in many organizations. Suspicion grows. Supervisors don’t trust managers who don’t trust key workers – hardly an environment in which collaboration, creativity, and innovation can flourish.

It is groundbreaking that the North American auto workers unions have had to face the fact that they are in the same boat as auto company management, executive, and shareholders. They will either sink together, or collectively create the life raft that will save all of them.

In other workplaces today, corporate hierarchies have lessened and many workers are also shareholders. Companies that thrive on creative activities have often worked hard to eliminate the tension between owners, managers, and workers, empowering many people as professionals to make major decisions. The demographically generated talent shortage has also helped many company owners to value employees’ contributions more strongly.

But, as much as many companies based on the brainpower of creative, talented people have tried to offer an alternative view, there has remained an underlying current in society that managers and owners are inherently exploiting workers (an idea that goes back to the 1850s and Marx, Engels, etc.). The media will treat isolated incidents of poor management as if it were more widespread. Strikes still happen in the public sector (very large in Canada), and the grievances become the lead story.

This severe economic downturn is exposing myriad problems within corporations and our broader economic system. The anachronistic idea that employees are somehow separable from the broader success of any company is one of these inconsistencies.

For the world economy to recover and flourish, this belief many need to end. And these concessions may go down as the tipping point for this change.

(Please note that I am not saying that unions did not play a valuable role in human history; just that a consequence of that role was a philosophy of antagonism that no longer serves most employees or society well).

I’ve had my share of tiffs with David Brooks, but he nails this one:

Granting immortality to Detroit’s Big Three does not enhance creative destruction. It retards it. It crosses a line, a bright line. It is not about saving a system; there will still be cars made and sold in America. It is about saving politically powerful corporations. A Detroit bailout would set a precedent for every single politically connected corporation in America. There already is a long line of lobbyists bidding for federal money. If Detroit gets money, then everyone would have a case. After all, are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler? …

If ever the market has rendered a just verdict, it is the one rendered on G.M. and Chrysler. These companies are not innocent victims of this crisis. To read the expert literature on these companies is to read a long litany of miscalculation. Some experts mention the management blunders, some the union contracts and the legacy costs, some the years of poor car design and some the entrenched corporate cultures … A federal cash infusion will not infuse wisdom into management. It will not reduce labor costs. It will not attract talented new employees. As Megan McArdle of The Atlantic wittily put it, “Working for the Big Three magically combines vast corporate bureaucracy and job insecurity in one completely unattractive package.”