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Okay, here's my amendment: On bailout oped and one bailout news story per day. One down, one to go!
Posted on 11/21/2008 6:08:15 AM PST by Kaslin
Who killed the U.S. auto industry?
To hear the media tell it, arrogant corporate chiefs failed to foresee the demand for small, fuel-efficient cars and made gas-guzzling road-hog SUVs no one wanted, while the clever, far-sighted Japanese, Germans and Koreans prepared and built for the future.
I dissent. What killed Detroit was Washington, the government of the United States, politicians, journalists and muckrakers who have long harbored a deep animus against the manufacturing class that ran the smokestack industries that won World War II.
As far back as the 1950s, an intellectual elite that produces mostly methane had its knives out for the auto industry of which Ike's treasury secretary, ex-GM chief Charles Wilson, had boasted, "What's good for America is good for General Motors, and vice versa."
"Engine Charlie" was relentlessly mocked, even in Al Capp's L'il Abner cartoon strip, where a bloviating "General Bullmoose" had as his motto, "What's good for Bullmoose is good for America!"
How did Big Government do in the U.S. auto industry?
Washington imposed a minimum wage higher than the average wage in war-devastated Germany and Japan. The Feds ordered that U.S. plants be made the healthiest and safest worksites in the world, creating OSHA to see to it. It enacted civil rights laws to ensure the labor force reflected our diversity. Environmental laws came next, to ensure U.S. factories became the most pollution-free on earth.
It then clamped fuel efficiency standards on the entire U.S. car fleet.
Next, Washington imposed a corporate tax rate of 35 percent, raking off another 15 percent of autoworkers' wages in Social Security payroll taxes
State governments imposed income and sales taxes, and local governments property taxes to subsidize services and schools.
The United Auto Workers struck repeatedly to win the highest wages and most generous benefits on earth -- vacations, holidays, work breaks, health care, pensions -- for workers and their families, and retirees.
Now there is nothing wrong with making U.S. plants the cleanest and safest on earth or having U.S. autoworkers the highest-paid wage earners.
That is the dream, what we all wanted for America.
And under the 14th Amendment, GM, Ford and Chrysler had to obey the same U.S. laws and pay at the same tax rates. Outside the United States, however, there was and is no equality of standards or taxes.
Thus when America was thrust into the Global Economy, GM and Ford had to compete with cars made overseas in factories in postwar Japan and Germany, then Korea, where health and safety standards were much lower, wages were a fraction of those paid U.S. workers, and taxes were and are often forgiven on exports to the United States.
All three nations built "export-driven" economies.
The Beetle and early Japanese imports were made in factories where wages were far beneath U.S. wages and working conditions would have gotten U.S. auto executives sent to prison.
The competition was manifestly unfair, like forcing Secretariat to carry 100 pounds in his saddlebags in the Derby.
Japan, China and South Korea do not believe in free trade as we understand it. To us, they are our "trading partners." To them, the relationship is not like that of Evans & Novak or Fred Astaire and Ginger Rogers. It is not even like the Redskins and Cowboys. For the Cowboys only want to defeat the Redskins. They do not want to put their franchise out of business and end the competition -- as the Japanese did to our TV industry by dumping Sonys here until they killed it.
While we think the Global Economy is about what is best for the consumer, they think about what is best for the nation.
Like Alexander Hamilton, they understand that manufacturing is the key to national power. And they manipulate currencies, grant tax rebates to their exporters and thieve our technology to win. Last year, as trade expert Bill Hawkins writes, South Korea exported 700,000 cars to us, while importing 5,000 cars from us.
That's Asia's idea of free trade.
How has this Global Economy profited or prospered America?
In the 1950s, we made all our own toys, clothes, shoes, bikes, furniture, motorcycles, cars, cameras, telephones, TVs, etc. You name it. We made it.
Are we better off now that these things are made by foreigners? Are we better off now that we have ceased to be self-sufficient? Are we better off now that the real wages of our workers and median income of our families no longer grow as they once did? Are we better off now that manufacturing, for the first time in U.S. history, employs fewer workers than government?
We no longer build commercial ships. We have but one airplane company, and it outsources. China produces our computers. And if GM goes Chapter 11, America will soon be out of the auto business.
Our politicians and pundits may not understand what is going on. Historians will have no problem explaining the decline and fall of the Americans.
No way. Detroit has been the one sucking Michigan tax money by the shovel full. With their corrupt mayors wrecking everything.
The UAW killed Detroit. It was an mugging that went bad.
However, in the end they will get the bail out money and will limp along. If they succeed in getting the right to unionize without a secret ballot they will immediately try to do to the other auto makers what they've done to the detroit 3.
It’s the labor union that thinks they are high and mighty and acting on behalf of the public. When actually all they were acting on was the pocket fattening of CEO’s pockets. The union is what killed Detroit. High wage demands that were out of context for jobs that could and were being done cheaper by other countries. There is a reason Jimmy Hoffa disappeared and now it is becoming more clear with each unemployment claim.
He also still lives in the past..
That's the part that the Left always forgets or ignores. Passing laws that restrict Americans is one thing, but it hurts us in the global competition and we aren't the only show in town anymore.
While UAW slugs were getting paid NOT to work, Asian car makers like Hyundai and KIA were offering 10 year, 100,000 mile Warranties.
I agree with Patrick and with Duncan Hunter that national security demands that we have our own heavy truck/auto, heavy shipbuilding, heavy aircraft, and heavy military industries.
It’s insanity to farm those businesses out of America.
Would I give 25 billion to GM to keep it afloat given that I’ve spent 5 decades putting burdens on it that have participated in making it unproductive?
Actually, I’d do better to get rid of the unreasonable burdens and revoked any legislation that makes them uncompetitive. That’d be worth far more than 25 billion bucks.
Deadly combination killed Detroit
1.) Corporate greed
Can you think of any reason why anyone should be paid tens of millions per year in salary. In addition to the salary you have all the other perks (bonuses, private chef, private plane).
2.) UAW
Despite union members making above average pay and benefits, the union wants more. I know a GM employee who makes almost $50,000 a year for sweeping floors. In the mid-west, that’s a great income for someone who never went to college, yet alone finished high school. And the union wants more money for less work. Where are the work ethics this Country was built on?
3.) Quality
Obscene costs for management, labor and retirees, government fees and taxes etc. have driven manufacturing costs up. The auto companies can either raise the price of their product or cut corners. Guess which one they chose.
Not sure if Buchanan wants a bailout...but the reasons he outlined are why the auto industry is failing....esp the bad trade deals that do not allow US cars to compete with foreign makers.
If the government truly wants to save the American auto industry...its time to drop the liberal globalism and start slapping some tarriffs on foreign autos...until those countries open their markets to US autos.
Even in this era of liberal globalism, and basically anti-American politicians and their decisions....the world economy didnt really tank until the US economy tanked first...the US still has the most economic influence in the world...even as our politicians and other anti-Americanists try to trash this nation
We do not need bailouts...we just need to get back to old fashioned American common sense
If you would like to be added or dropped from the Michigan ping list, please freepmail me.
Okay, here's my amendment: On bailout oped and one bailout news story per day. One down, one to go!
BINGO. Every unionized highly regulated industry is now functioning overseas. I'm surprised the auto industry lasted as long as it did...
Maybe BMW should start producing Packards in Alabama?
How does that argument square with the fact that when Toyota, Nissan, and VW build plants over here, they still produce cars profitably while Detroit does not? Leaving aside the perceived quality of the product, and the corporate philosophy, which are areas in which the foreign car makers have a clear business advantage over the Big Three, the only other differences I can see are that the foreign car makers locate in Right to Work States where the unions have less power, and that the Detroit is horribly burdened with having to pay benefits to retired workers under past union contracts.
Don’t forget government regulations. It’s why Ford can’t bring a lot of high-mileage diesels to the US — environmental regs. Now that Waxman kicked Dingell to the curb, we’ll be forced to teeny weeny compacts and higher insurance bills.
In the 70s - 80s the damage caused by cocaine and reefer use on the line was so rampant that when GM opened Saturn away from Detroit they made zero tolerance and mandatory random testing a condition of employment.
Assuming the USA gets in a shooting war, what can the auto makers contribute toward it? Tanks? Tanks are obsolete. Aircraft? How are they tooled to produce F-35's?
Success in warfare these days does not depend on heavy armor - it depends upon acquisition of information and precise and stealthy delivery of destructive power. It depends upon microprocessors and carbon fiber, not heavy industry.
This is why entry into the present Iraq war did nothing for the market value, i.e. stock price, for our heavy industries like the big 3. The national security argument is a false one. Not according to me - according to the market, which is much smarter that any one of us.
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