The American Auto Industry Nightmare

General Motors has come to Washington, begging for a $25 billion bailout to keep it and its ailing Detroit counterparts going next year. But nobody seems too thrilled about the prospect. Liberals dwell on the companies’ gas-guzzling sport-utility vehicles. Conservatives obsess over all the well-paid union members with gold-plated benefits. And people of all ideological backgrounds remember how they used to buy domestic cars, years ago, but stopped because the cars were so damn lousy. "The downfall of the American auto industry is indeed a tragedy," the Washington Post editorial board sermonized recently, "but the automakers and the United Auto Workers have only themselves to blame for much of it."

Jonathan Cohn in The New Republic. General Motors! I remember when I started buying Japanese cars thirty or so years ago after two GM cars that literally fell apart on me because of lousy craftsmanship: one an Oldsmobile 88, one a Corvair. Since that time I have had Toyotas, Mazdas, Subarus, Nissans (had a VW in there, too, for a time), all fine cars that were well made, got good mileage and lasted a long time. Currently I’m driving a 2001 Toyota Echo that gets, on average, 37 miles to the gallon. My wife just bought a Honda Fix after her 11-year-old Mazda finally needed a repair that would have cost more than the 50% down payment on the new car. She expects to go another 11 years with this one. Neither of us believe an American car would have done us as well. Now, here we are with a major financial crisis and the jobs of millions of folks both in the manufacturing, but also in the dealership, parts, carwash, muffler-change industries depending on GM surviving. And there is the promise of the Volt, a plug-in hybrid, by 2010 (No doubt after a plug-in Prius by Toyota is already on the market.) A lot of Japanese cars are now manufactured in the US in states that don’t mandate Union membership. They provide jobs, make profits, make good cars and support their local economies. They are not, however, the scale and the scope of GM. Nor are their executives paid the same kind of money as those at Toyota or Honda, who make much less than GM officers. And GM is coming to Congress seeking 25 Billion Dollars. And they will most likely get it. Jonathan Cohn again:

But the debate over a Detroit bailout should begin a larger political conversation, one that sprawls beyond the Midwest and the intellectual confines of lean production techniques and workers’ legacy costs. Whatever mistakes the Big Three and the UAW have made, their struggles are a pretty good indicator of why the government–not employers–should be responsible for providing health insurance and why, without broader action to fight climate change, improving fuel efficiency will be a struggle. Naturally, the Big Three should enthusiastically promote these reforms, something they haven’t done in the past. Nothing can stop the revolution in auto-making and drivetrain technology; even under the best of circumstances, the Big Three need to become smaller, more efficient, and more environmentally conscious. But if the government manages that change and uses it as a springboard for discussion of broader economic reforms, everybody can benefit.

And in a few months they will be back for more, wont they? Under The LobsterScope