12/16/2011 10:48 am ET Updated Feb 15, 2012

What 'Once Upon A Car' Can Teach Us About the Auto Industry, and Detroit

Detroit and Southeast Michigan went through what we reporters casually refer to as the "Carpocalypse" in late 2008 and 2009. General Motors and Chrysler both went through bankruptcy. Ford teetered on the brink.

For those who lived it, Bill Vlasic's new book, "Once Upon A Car: The Fall and Resurrection of America's Big Three Automakers--GM, Ford and Chrysler" ( William Morrow), is the best book on the whole shebang that you are ever going to read. And it is critical history for those of us who live and breathe the exhaust fumes of this industry in Detroit.

"Once Upon A Car" is not the first book to cover the events. Former White House "Car Czar" Steven Rattner, who was a central figure in the Carpocalypse, penned his own book: "Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry" (Houghton Mifflin Harcourt).

Both books kept me fairly riveted by filling in the gaps of my own reporting for Businessweek in 2008 and 2009. But Vlasic's was the more interesting, as he was able to get invaluable access to the main characters who realized they had made history and wanted to share it: Ford chairman Bill Ford, Ford CEO Alan Mulally, former GM CEO Fritz Henderson, former GM Vice Chairman Bob Lutz, the late Jerry York, who was financier Kirk Kerkorian's investment adviser; Kerkorian himself and union leaders. In all, Vlasic, the New York Times' Detroit Bureau Chief, conducted over 100 interviews with key players, and the work shows. Rattner's book was also valuable, but it was told almost exclusively from the Washington perspective.

Of particular interest to me were the tick-tock accounts Vlasic was able to construct regarding GM CEO Rick Wagoner's and Fritz Henderson's outreach to Bill Ford about a possible merger of the two auto giants. It is shocking how casual the call was made for the meeting, as if Wagoner was asking the great grandson of Henry Ford out for coffee to discuss an upcoming Lions game.

GM, of course, was desperate. It had sought a tie-up with Chrysler as well. It was trying to find any way out of its cash-burning mess other than bankruptcy.

As I read Vlasic's accounts of the meetings GM held to try and merge with one of its cross-town rivals, I was struck that all the talk on the GM side was about achieving scale, combining operations to defeat the Japanese, and most of all, eliminating jobs. Cutting away an entire design department, an entire legal department (although that sounds like a pretty good idea), an entire PR department, human resources, etc. There would have been loads of white-collar and blue-collar jobs eliminated, mostly from Southeast Michigan, though around the world as well.

Why? Because Wagoner and the rest of GM's executive suite didn't want to be the ones who led GM into bankruptcy. These few men, who have lived most of their lives in Southeast Michigan, were ready to sign up for thousands and thousands of more job cuts in the greater the area they called home. Doing so would have further devastated the region, making any recovery hard to imagine. All this just to perpetuate a dysfunctional corporation and avoid what the executives saw as the stink of bankruptcy that would lay on their own reputations.

I kept looking for someone in these conversations to say something about the awful effect a GM-Ford merger would have on Southeast Michigan. I asked Vlasic if he had left something out. He said no. "It was all about saving their skins and reputations," he told me.

I asked Bill Ford if he ever saw any understanding of what a merger like that would do to Detroit and the surrounding suburbs. He said no. "It would have been devastating, but it was also a terrible idea," Ford told me. He explained there was far too much overlap in the companies' operations, and it would have taken years to make sense of properly knitting them together.

At the time of the meeting, the Ford chairman could see that Wagoner and Henderson's real game in driving a truly awful merger deal was merely to get GM's hands on Ford's more than $30 billion in cash. According to Ford, that's all they wanted.

The truth is that even though bond holders got burned on their investments in GM and Chrysler during the companies' bankruptcies (a small price to play compared with the liquidation of the U.S. auto industry), the automakers are immeasurably better off today. They shed completely unsustainable debt and healthcare liabilities that had piled up for years while trying to pay off Cadillac healthcare benefits to employees and retirees. The companies were collapsing for 20 years under the weight of their own histories, legacies and wretched labor deals.

Today, GM and Chrysler are making real money again. Chrysler has refilled its Auburn Hills headquarters and is rumored to be looking at downtown Detroit office space for a few thousand more employees. Ford is thriving, too, earning billions. Auto jobs have come back for both blue- and white-collar workers.

Blue-collar wages are lower for some, that's true. But bankruptcy freed GM and Chrysler to emerge from a place that was only going to get worse. I'm betting they are only going to improve and become more prosperous in time.

The city of Detroit is still weak and gasping to avoid bankruptcy. The unions working in the city are making it extra difficult for Mayor Bing to engineer survival and, hopefully, a long overdue renaissance. In the event of a bankruptcy, the city's union contracts will be torn up, debts eliminated and renegotiated. It would be painful, just as it was for GM and Chrysler.

But considering the bright futures of the automakers post-bankruptcy -- emerging lighter, leaner and with a mission to succeed, without having to factor in manufacturing balance sheet-destroying revenue just to pay healthcare costs -- perhaps bankruptcy would be the best thing for Detroit. After all, it wasn't the terrible, awful adventure Wagoner always thought it would be --except for him. And then maybe Vlasic, a Detroit native, can write us another fine book. This time: "Once Upon A City."

READ MORE: The Auto Bailout: Still Debated but Worth Every Penny

Grand Blvd. is a weekly column about cars from David Kiley. For more of his writing, and everything about cars, head over to AOL Autos.