The industry certainly doesn’t deserve a bailout. For years, it’s been managed by incompetent executives whose major free market talent has been begging the federal government for help or money. But then, deserve doesn’t have anything to do with the American free-market system. The only thing that counts is a talent for hoodwinking a gullible public into purchasing a clunker with an American eagle stenciled on it in preference to a quality Japanese-made car.
My first concrete connection with the whiners and snivelers from Detroit began with my experiences during the gas crisis of the 1970s. I suddenly found myself with a Plymouth with an 8-cylinder engine and a gas mileage on a good day of about 8 MPG. Before long, I found myself waiting in gas lines at 4:30 a.m., hoping the station wouldn’t run out of gas before I reached the head of the line.
By then, Japanese auto makers had developed an innovative manufacturing process that turned out cars with two strong suits—they actually worked, and their gas mileage left American guzzlers at the starting gate. With a couple of lapses—a disastrous Volkswagen Dasher and a serviceable but irritating Ford Fairmont—I finally bought a Nissan and haven’t seriously considered an American car since. Almost all of my friends and acquaintances also switched.
Instead of rising to the competitive free-market challenge, General Motors, Chrysler, and Ford continued pushing hulks off of the assembly line, completely oblivious to the Japanese threat to American auto manufacturing dominance. When the threat became unavoidable, the Big Three continued down the road to disaster, but with a flourish designed to brand the Japanese as unfair traders. All Detroit wanted was a level playing field, it said. Nothing more. In other words, the Japanese were at fault for developing a product Americans actually wanted.
The strategy was somewhat clearly enunciated by Big Three execs who appeared together before Congress to plead their case. They accused the Japanese of every deceptive trade tactic in the business, but they never addressed the question of their own incompetence and backward-looking management and planning practices.
The most telling snivel of all occurred when a Congressman inquired about the possibility that Detroit might want to think about manufacturing a certain number of cars with specialized features for the Japanese market. He pointed out that the Japanese public might not prefer American cars that were totally unsuited for Japanese driving customs and road conditions. He specifically talked about oversized American cars ill-suited for Japan’s narrow roads and limited highway system. He also mentioned the Japanese custom of driving on the left side of the road, which necessitated cars with steering mechanisms on the right.
Rather than answer intelligently, one of the execs summarized both his ignorance of the global community as well as his arrogance when he asked rhetorically, “Why can’t they drive on the right side like everyone else in the world?”
Since then, the same attitudes have continued to drive Detroit into imminent bankruptcy. The products produced by the American auto industry still guzzle gas by the barrels-per-mile, and reliability still lags far behind Japanese-made autos. Even German cars rank above American ones on the reliability scale in Consumer Reports. That’s astounding. American and German cars were both at the bottom of the reliability scale at one time.
Given Detroit’s long-history of non-competitiveness, the feds should think long and hard about helping Detroit once more. A major complicating factor will obviously become the human chaos that will result with a collapse of the American auto industry. More is at stake than just the few factories in Detroit. The industry provides personal and business income to millions of middle-class Americans who are located over the geographic scope of the United States. At stake are thousands of large and small contractors and other businesses that depend on Detroit’s output for a living income.
We can expect the debate in Congress to be heated. But if the Senators and Representatives approve a bailout, it should come with rope-thick strings attached. To begin with, the current executives ought to be removed from their positions and replaced with more talented and receptive individuals. The feds also should cap executive income and perks along with golden parachutes. There’s no logical reason for rewarding losers.
And the feds may want to assume financial control over the companies until such time as monetary viability is achieved. The myth of superior performance in the free-market system has long since been disproved by the very economic sector that now seeks government help from those it has regularly branded as incompetent government bureaucrats.
Some will characterize federal aid as “socialist.” Another myth. There has always been a close connection between the federal government and business in America. It is a symbiotic relationship. One cannot exist without the aid and comfort of the other. It thus behooves each American to recognize and support a system that is in the best interest of a safe and secure America.
SF Bay Area 