As Ford and GM close plants and putting Americans out of jobs, Japanese companies, such as Nissan, Honda, and Toyota are opening new ones in the US.’ Just months after GM will debut yet another plug-in hybrid prototype, Toyota will roll out with its third-generation Prius, a plug-in hybrid slated for market next year.’ For every failure an American automaker racks up, the Japanese add another success.’ Putting the morality of a bail-out aside, I think it is high time that the federal government consider an intervention into this crucial market; American automakers are dying slow deaths, and we need to decide as a country whether or not we can live without a strong domestic automotive industry.
There are great reasons against a bail-out from both liberals and conservatives- liberals argue that feeding more money into big businesses is plain unfair, while conservatives shudder at the thought of the government trying to meddle in the free market.’ We need to leave our ideologies at the door and keep our eyes on the prize, which is a vibrant auto industry in this country.
Current problems that plague Ford and GM include ‘legacy costs’ and misdirected R&D funds (Chrysler is a unique case and therefore outside the scope of this article).’ ‘Legacy costs’ refer to health and pension benefits that Japanese companies are not responsible for, given their less worker-friendly histories.’ The American automakers argue that they are trying to compete with a several billion dollar disadvantage, since they have to deal with impossible unions and benefits that simply are not sustainable.’
While I am not necessarily advocating that the government should use taxpayer dollars to cover the entire burden for Ford and GM, it is obvious that some real arbitration needs to take place to keep these unions in line.’ I support worker rights as much, if not more, than the next guy, but the fact is that union leaders are being unreasonable.’ They won’t even entertain the notion of eliminating generous benefits for future employees, let alone paring pensions down to size for current retirees.
If at the end of a real negotiation process, with good concessions made by both sides, Ford and GM still find themselves with an unbearable legacy cost, then it is entirely reasonable that the federal government give a one-time bail out to keep our companies competitive.’ Nobody made a fuss when the airline industry received a multi-billion dollar bailout after 9/11, only to have several of its companies declare bankruptcy months later.’ Why should this be any different?
In addition to eliminating the problem of legacy costs for our auto makers, the government should consider working with the auto industry on research and development.’ Producing fuel efficient cars has become less of a market need and more of a policy need.’ I firmly believe that American will be able to afford to drive gas-guzzling SUVs for many years to come, though I’m not so sure the environment can take it.’ We can wait it out, letting consumer pressure work on automakers for the next two decades until real change is made, but I don’t think we as a nation can afford to let things go so far.’ If this government is serious about preventing climate change then it needs to put its money where its mouth is.’ I propose generous government grants, real goal direction, and technology sharing to achieve the aim of reducing our dependency on fossil fuels.
I envision a government agency that will coordinate development goals and implementation deadlines for new technologies.’ A real discourse needs to go on between GM, Ford and the government, and concrete deadlines need to be hammered out.’ At the end of these talks, American automakers need to realize that by 2012, their cars, from the largest SUVs to the smallest compacts, need to get 30MPG in the city, 40MPG on the highway and run either biodiesel or ethanol.’ There are going to be real costs associated with such a rigorous timeline, and everybody needs to chip in.’
With the buying power of the government and the pure will of the American people, we can achieve our goal of a revitalized American auto industry that produces the most efficient cars in the world in just a few years.’ By investing in and charting new directions for the auto industry, we can finally be proud of the car in our driveway, built in the US of A.
