Auto Industry Off Of Life Support
Now is Not the Time to Take the Auto Industry Off Of Life Support
Eugene Robinson
WASHINGTON — Despite the popular myth, lemmings don’t really hurl themselves off a cliff to reduce their numbers. That sort of behavior is seen only among Republicans in the Senate, who gave us a demonstration when they torpedoed legislation to bail out the auto industry.
To state the obvious, no one is eager to use hard-earned taxpayer dollars to bail out the bozos of Detroit. Yes, I know that American cars are better than they used to be, and yes, I know that the much-heralded Chevy Volt is on the way. But our domestic auto industry has been thoroughly outthought and outhustled by the foreign competition, and no infusion of public funds is likely to change this established pattern.
It may be that General Motors, Chrysler and Ford are lumbering, Jurassic beasts that deserve their looming extinction. But only a free-market fundamentalist, a lunatic or a Senate Republican — perhaps I’m being redundant — would conclude that now is the moment to hasten Detroit’s demise.
To recap: We’re in the midst of a global financial crisis. The housing bubble has burst and prices have collapsed. The economy has been in recession for a year. Unemployment has risen to 6.7 percent, and if “marginally attached” workers are included — those who have given up even looking for a job — along with those who want to work full time but are forced to accept fewer hours, the rate is 12.5 percent.
Even if the Big Three deserve to die, they shouldn’t die now. Economic theory notwithstanding, it would be insanity to throw hundreds of thousands of auto company employees, and maybe a few million others in the supply and sales chains, out of work — leaving them and their families at the mercy of an economy that has no replacement jobs for them. Public funds would end up supporting these people anyway, except that we would have lost our domestic auto industry — which, despite its many failings, is the only domestic auto industry we’ve got.
What the auto companies need is something on the order of $14 billion, which will allow them to survive until the Obama administration takes office and is able to address the crisis in a more systematic way. That sounds like a lot of money, but it’s a rounding error in the context of the ongoing financial meltdown. We’ve already agreed to spend $700 billion to bail out Wall Street.
The thing to do is give the automakers the money to buy some time. This is obvious to the current administration, the incoming administration, a majority in the House of Representatives and the Democrats in the Senate — but not to the Senate Republicans. They killed the bailout measure by demanding that the United Auto Workers agree to sharp, almost immediate cuts in wages and benefits.
Funny, I don’t recall a cry from Senate Republicans for salary caps on the stockbrokers whose jobs were saved in the Wall Street bailout — nor, to my knowledge, have they demanded that white-collar workers in the auto companies take pay cuts. I do recall lectures from some Republicans in the Senate about how inadvisable it is for government to meddle in the workings of the free market. In my book, renegotiating labor contracts qualifies as meddling.
Some of the most vocal critics of a Detroit bailout — Sen. Bob Corker, R-Tenn., and Sen. Richard Shelby, R-Ala., for example — happen to have foreign-owned auto plants in their home states. This has led to accusations that they are deliberately trying to sabotage the Big Three to help foreign automakers, but I think it’s more likely that they’re just being doctrinaire and ultimately self-defeating.
They have managed to position their party as against unions, against America’s domestic industrial patrimony, against the blue-collar working class — and also, incredibly, against the Rust Belt states, such as Michigan and Ohio, that are home to UAW-represented auto plants and that also regularly tip the balance of presidential elections.
And for what? The Republican senators who voted to kill the bailout knew full well that the White House was determined to find some way to tide the automakers over. It was as if they couldn’t help themselves. Even lemmings must be shaking their heads in dismay.
