If you've been listening to the debate over the fate of the U.S. auto industry over the past year, or perhaps longer, you've undoubtedly heard the speculation that either General Motors or Ford or both may slide into bankruptcy.

I've avoided for a long time speculating myself whether it will happen since I honestly didn't feel confident that I had the answer. Now I think I do. All patriotism aside, I have the opinion that I don't think either remaining American automaker will file for bankruptcy, or maybe even worse, be acquired by a foreign-owned automaker. But there are two things I think have to happen, or that GM and Ford must do, to avoid the filing.

1. As they both focus more on the American market, they must not lose their focus on vital overseas markets (notably China).

2. Stop listening to the numbers of the American public (the foreign car loving part) that whine and complain about their every decision.

The first suggestion is obviously more challenging than the second, and I realize it almost sounds like something a globalist, free trader, or internationalist would say. Those of you who have read my "Buy American Mention of the Week" articles for long know that I am none of those. I'm a self-described nationalist and protectionist. I don't believe trade for the sake of trade is either necessary, necessarily good, or the engine of prosperity. If it were, we would surely be in utopia by now.

According to the May 1, 2006, issue of Business Week, we imported $1.21 trillion worth of foreign-made goods in 2005, and that's excluding Canada and Mexico! That's twice the number of imports compared to 1992 when Ross Perot warned us about NAFTA's giant sucking sound, and it's an 80-fold increase compared to 1960. If trade were the answer to prosperity, both consumer debt and national debt levels would be negligible.

It's perfectly fine to import things like bananas that we can't grow in the United States or certain fruits from other countries in the off-season, but trade for the sake of trade is not only potentially destructive to American jobs, it's also kind of silly when you think about it. Remember, I'm not saying all trade is bad, but trade for the sake of trade is silly. If both the United States and Germany produce socks, for example, of what benefit is it for Germany to buy our socks and for us to buy Germany's socks rather than for each country to simply buy their own socks? Other than needlessly polluting the environment by running ships all over the place and hiring more port workers and coast guard personnel, the answer is "not much." In fact, it's actually a drain on the economy since these are government (taxpayer-funded) jobs. And why would we import anything from Germany we can't make here since their labor costs are higher than labor costs in America?

The only reason would be to help American companies secure a higher market share for their products in the foreign country than they might otherwise. If GM makes some of their Cadillacs in Germany, they stand a better chance of increasing their sales there, just like some Americans reason that it's good for America if they buy a Toyota that is made here.

This brings me back to the two things GM and Ford must do to stay out of bankruptcy. It's kind of silly that the same Americans who spew venom at GM and Ford for investing overseas are the same ones praising Japanese companies for increasing investment in America. That's why GM and Ford should just tune out American auto whiners and strengthen their focus on both America and countries abroad.

Regardless of whether it was a reaction to criticism for not focusing enough on the market here at home, GM has pulled out of quite a few overseas ventures. They sold 17 percent of their 20 percent stake in Suzuki for $2 billion, their 20 percent stake in Fuji Heavy Industries, exited an alliance with Italian-owned Fiat, and on April 12, 2006, they announced plans to sell their 7.9 percent stake in Isuzu for close to $300 million. Their 50.9 percent stake in the formerly struggling car brand Daewoo is turning out to be a smart move.

Although GM paid $2 billion to separate from Fiat (selling Suzuki cancels out that loss), it is questionable whether it makes sense to exit foreign ventures altogether. On May 24, 2005, the Wall Street Journal detailed how Isuzu's net profit increased a record 9.7 percent as their sales in Asia skyrocketed. Does it really make sense to sell a stake in a company that is making record profits? I can see why it may make sense for a company to sell a stake in a profitable non-core asset like Kodak did with a profitable Lysol in 1995 (Lysol is now British-owned), but Isuzu is certainly not a non-core asset.

On the domestic front, GM sold their stake in the immensely profitable GMAC real estate business on March 24, 2006, for about $8.8 billion. Will any of this really matter to criticizing foreign car lovers? Probably not. They've shown their hypocrisy in bashing GM for ventures overseas, even profitable ones, while applauding Japan's ventures in our market. A double standard to be sure.

They conveniently ignore the fact that Japan shuts us out of their market while they are allowed to flood ours. If Chevrolet sells 500 cars a month in Japan, it's considered a good month. They also conveniently ignore the fact that foreign nations like Japan pick up the tab for the health care of their citizens rather than have companies like Toyota, Nissan, and Honda do it.

What does matter is that GM is now super-flush with cash (around $36 billion), and if they play their cards right, starting with items number 1 and number 2 at the beginning of this article, they just might make it. China has been a huge success for GM, where GM is the leading seller of automobiles and made an income of $218 million in the first three quarters of 2005. In fact, the best selling car in China is a Buick Minivan. And despite GM's success in China, they have no plans to import entire vehicles into the U.S. from China, although they do, as all automakers do, import parts from China. The first company to announce plans to import completely assembled cars from China happens to be DaimlerChrysler.

Another reason I believe GM and Ford will escape bankruptcy is because both companies are now profitable. True, Ford has warned that this may change in the next quarter, and GM's profit-showing was the result of revised numbers, but hey, it's a start. If Ford can continue to come out with "bold moves" like the re-designed Mustang and GM can come out with more hits like the Buick Lucerne and Chevy HHR, they should be fine.

General Motors is now sitting on $36 billion in cash, which should buy them enough time to convince consumers that their cars are worth a second, third, or fourth look. It's going to take time to convince Americans they don't need to buy so many Toyota Camrys since the Chevrolet Impala won the top spot for initial quality in its segment. But since gas prices are now so high, it should take less time for Americans to realize that the Chevy Tahoe gets 20 mpg, and the Toyota Sequoia only gets 16 mpg (not to mention that the Tahoe won the top spot for quality in its class).

It may be risky to make such "bold moves" (Ford has a winner in that slogan), but I think Ford and GM are going to make it. Maybe they'll even become profitable enough to buy Chrysler back from the Germans, and we can truly have a "Big Three" again. I guess I'll have to hold out hope for that one for another day.

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