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.
My Dad was an attorney who defended product liability lawsuits against GM in the '70's. He was well aware of the dreaded "Monday morning" products.
Like everything Socialist, this is another example why Socialism doesn’t work.
Every industry that has been given direction fron the government eventually fails. Unfortunately, we had the perfect storm hit, but for the Democrats it hit at the right time.
Once in chapter 7, the big 3 will be torn apart and sold for parts. Some company will buy up the remains of all three, move to a right to work state and restart as a new company.
The best talent from Detroit will move to that state as white collar workers and Detroit and the rest MIchigan will become another wasteland thanks their Democrat masters. And the masses will still vote Democrat.
The old xenophobe continues to ignore the obvious answer.What killed the big 3 was and is the UAW.
$75/hour cost to manufacture a car with the UAW.
$48/hour cost to manufacture a car anywhere else in the United States.
The UAW has been the cash cow to support the Democrat Party.
There is no question: the Democrat party will bail out the unions.
The UAW is greedy, and greed ultimately destroys whatever it touches, but the US government let its own auto industry down by failing to combat unfair import/export regulations imposed by the foreign competitors. Foreignors limited Detroit's production by placing heavy taxation on U.S. imports; America failed to respond in kind. While other nations were busy protecting their national interests, America was committing economic suicide by dismantling its own sense of nationalism so it could be replaced with multiculturalism and globalism. Both parties are guilty of this 'Americide' and it doesn't appear it will end anytime soon.
Why would you stay at a job that pays 300K, if you can leave and get the big bucks at Benz, BMW, Hyundai, IBM, Hewlett Packard or any other of thousands of companies who would want that kind od experience. So there - I just told you!
It was big news thirty years ago and forgotten about now.
We took down Iraq in about two weeks with an air-land force of armor and aviation. Not bad for an obsolete weapon. Tanks are not obsolete. Nor are air forces.
WWII proved that alternative usage of industry is a benefit that can be realized in a matter of months and a little retooling. That principle is just as valid today.
Information is itself not combat force; it is a force multiplier. There’s a difference. The only way your computer can itself kill me is if you pick it up and hit me in the head with it.
Many of the replies I'm reading are...
THE UAW KILLED DETROIT!!
THE UAW KILLED DETROIT!!
THE UAW KILLED DETROIT!!
THE UAW KILLED DETROIT!!
(keep repeating till you believe it)
Here's a little secret:
What Buchanan is saying is there are many other reasons besides that has lead to the failure of Detroit automakers.
Issues like Washington interfering with stupid CAFE standards, issues like oppressive corporate tax rates, issues like an unfair trade balance, and of course the Global economy.
To be sure, Unionists had a large part of this epic failure - but they are not the only losers who are at fault.
You prove my point. The outcome of this battle did not turn on a slugfest between tanks, with the side who could produce more winning.
How would we defend against an armored column invading our territory. M1-A1's or A-10's? Would the outcome of that battle in any way hinge upon manufacturing capacity?
When can we start to blame it all on BHO?
I would like to see GM bought out by Hyundai or perhaps Toyota. It would serve them right for their mismanagement and probably result in better quality vehicles for US consumers.
The way I hear it there are more are more people working for the Government (at all levels) than their are working in the private sector to pay them.
Do you thing we have a problem here?
If you think the Federal Gov is too big now, just wait for four years.
BUMP!
I would suggest that the Unions bear a major part of the responsibility for this. Look at the coal industry and the steel industry.
Both of these were heavily union, just like the auto industry. The costs they have extracted in wages and benefits were exorbitant relative to other industries. The other problem with all of them was they did nothing to combat the regulations that came down on their industries.
The unions supported the various government regulators that undermined each of their industries. As a voting block the continued to elect people who imposed more regulations on their employers and more costs.
The industry could afford it and should have to pay whatever the cost was is a mentality that exists among union employees. They never want to accept any responsibility for their decisions, they are OWED !!!
I saw it first hand in the coal industry and have no sympathy for them and their mentality. My frustration is the failure of the education system to teach what should be taught and not the indoctrination that has happened for 50 years now.
Pat is correct...You see the results of the service economy-America is bankrupt. If anyone believe foreign manufacturers will continue making cars in the US, they are sadly mistaken. It doesn’t matter. It gives Americans cover to buy these cars and not feel like anti-American swine (but they are swine of course. Such companies employ people which is good-but contribute nothing to the American GDP. Really they were always red herrings useful to convince American that their own industry was unimportant. Obviously, they were quite successful.
Winning involves taking and holding ground. The tank is one of the best ways to do that. The A-10 is excellent at preventing other tanks from taking ground. The A-10 is a defensive weapon.
The seeds of destruction of the auto industry are solely the property of the Bolshecrat party and their allies the UAW. The Bolshies have had a hate affair with hydrocarbon base fuels for decades and have countered market forces to advance their agenda. Witness, the requirement from Nancy Pelosi, that before Detroit get any money they have to come with a marketing plan to produce green cars. You will see laws come out of congress to punish foreign owned auto production, like card check. And, laws that offset low tax states competitiveness. I expect we will be see the rise of the UBW (United Bicycle Workers) at $75 an hour to build the ultimate green means of transportation before the end of the next congress.
And Detroit didn't die from a lightening bolt but from decades of neglect and indifference.
So now, after nearly 50 years of unions, poor management, a government love/hate attitude, and rising competition Detroit dies and everyone can justifiably point to their favorite villain.
No more duct tape, Bondo and joy riding. Either the old heap gets overhauled completely or it heads to the crusher.
Every advanced economy will inevitably turn into a services-heavy economy. Even Germany, the world's biggest exporter, has an economy that is 70% service industry.
If anyone believe foreign manufacturers will continue making cars in the US, they are sadly mistaken.
Why would they close down the highly-efficient, profitable production facilities that they have invested billions of dollars into? American workers are highly efficient.
It doesn’t matter. It gives Americans cover to buy these cars and not feel like anti-American swine
My wife's BMW was made by American workers in North Carolina (IIRC). This is a plant that provides high paying hobs to hundreds, if not thousands of Americans. What is anti-American about buying a quality product made by American workers?
but they are swine of course. Such companies employ people which is good-but contribute nothing to the American GDP.
I think you don't understand what GDP is. A car manufactured within the United States, whether by Ford or BMW, counts towards our GDP.
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