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?
they may well get it, but it’s unlikely to happen in the lame duck session that just got underway. there’s a growing RATpublican resistance to it in the senate, and given the obstructionist tactics of the recent past, they’re quite likely to hold it up, regardless of what the house does, so that it becomes the problem of the incoming administration.
reid hasn’t the votes to force the issue, and this will once again be another act in the ongoing kabuki.
obama has already expressed willingness to make the big three part of the bail out©, probably with some serious oversight and conditions, and rightfully so.
an aside, l noticed today that goldman sachs has had a revelation…or they heard footsteps in the night… and will be forgoing the big buck bonuses.
“accountability?”…har!…it’s going to be tough trying to survive on those $600,000 salaries alone, eh.
as for the volt, it’s going to be another gm fiasco unless the current mentality…read management… there changes. preliminary pricing info indicates that it’s going to priced in the $40k range, and that’s not going to translate into a lot of sales. the volt won’t save gm.
This can be done. Your right the Volt won’t save GM. People who worry about food and heat don’t buy $40,000 cars. Its a society we have to even out the pain and even out the profit. We cannot go back to building pickups and SUVs. This may be the time for a gasoline tax as the stimulative effects of prices falling 1.50 a gallon outweigh a 50 cent a gallon tax. Send the 50+ billion raised to the carmakers.
Not to mention the fact that the US requires other countries to open their markets to US products, and yet when foreign companies do well on the US market their domestic US competitors are subsidised against them.
It doesn’t pay to ship cars half way around the world, and thus any manufacturer wanting to sell big volumes in the US has to manufacture locally. Smaller, more reliable, longer lasting, more fuel efficient cars may create less jobs – but that, in itself, is not necessarily a bad thing – consumers get better value, and the environment is damaged less.
Obama should help specific GM/Ford initiatives to create more fuel efficient, environment friendly cars. He shouldn’t provide an across the board subsidy to dinosaurs who are going to die a painful death in any case.
Psst, it’s the Honda Fit. The Fix sounds like, ahem, affordable transportation for drug addicts. 😉
Either way is cool!
any of that bailout money?
That has to be the best part of the joke!
One problem not remarked on by anyone here or other progressive blogs is that the world is awash in cars because of the proliferation of car producers even before India and China enter the market.That is depressing prices for cars worldwide and more production at home will only add to the stockpile of unsold cars.
Technological development may stem the bloodletting for some time but in a time when technology spreads far and wide at the speed of electrons,that edge is likely to be shortlived.
I see the plight of the car industry as akin to that of the agricultural indutry which made many farm workers superfluous by the introduction of mechanized agriculture supplemented by fertilizers.We are entering a similar era of overproduction of cars.
We have to find some other things for the superfluous workers in the auto industry to do.That pool is going to shrink.as time goes by.I am sure that Mr.Wagoner and Mr.Lutz know this and money handed over to them will disappear into their private swiss bank accounts with not a penny accruing to the benefit of the workers.