Look, for decades now, the american auto worker has competed with workers throughout the world, while his true market value is what these workers are paid. He was effectively being paid from his own future wages. Now the piper must be paid. There is absolutely no way out of this. If the nation goes back to permitting the artificial inflation of our workers' wages, this welfare fee will simply be transferred to another segment of our country. While other countries are moving construction to areas of the world with cheaper labor for similar quality and, as a result, selling their products throughout the world, our products will be limited more and more to this country. When our companies seek leverage or issue stocks, they will be competing with these much larger and more efficient companies overseas. We will, in effect, simply shrink away. On the other hand, if our companies are permitted, they will logically move to these more efficient worker environments, etc. Whether we tax at a gas pump (which would restict spending on such things as healthcare, housing, food, the traveland entertainment industries, etc.) to pay the welfare of an overvalued worker skill or whether we legislate something else, it would bring a disaster -- similar to the one we now have. You just can't avoid true market value for long (see, for example, the wages of healthcare workers inflated above market value by insurance -- after the current tyranny of public health fails in saving the healthcare wage -- this shoe will drop as well; simply, no one, not even an MD, for example, can recieve mre than the individual patient can pay out of pocket -- more than his market value). I dislike it, too, but it is an ironclad reality. If our government tries to "bail out" GM in any way, we must suffer again (and probably much worse) as we are now. We must take the hit sometime (the sooner, the less catastrophic). Only ignorance or lack of courage puts it off.
- 1
- 2
The Next Bailout: Detroit
Email To A Friend
Please fill in the following information and we'll email this link.
That attitude, though, reveals a certain naiveté about the ways of Washington, says Congresswoman Miller. "The process here is a two-step dance," she says. "We authorize all kinds of things that never get [funded]. You have to follow through." Detroit seemed to have difficulty grasping that Washington reality. "The auto industry has been slow to the starting line," says Miller.
Now as the race for a rescue enters its final lap, Motown is putting the pedal to the metal. This week, the big wheels from Detroit are descending on Washington. High-octane salesmen like Bill Ford Jr., Henry's great-grandson and executive chairman of the family firm, and the Detroit Three CEOs, are all working the halls of Congress. "I hope we've turned the corner," says Congressman Camp. "It took longer than it should have."
The Detroit gang has refined its pitch in a way that would make the presidential candidates proud. Saving Detroit does more than preserve millions of jobs, the new argument goes; it helps America become energy-independent. Here's the pitch: The electrification of the automobile is inevitable, so batteries are becoming the new oil. Currently, Japan is the world leader in car-battery production, thanks to hot-selling models like the Toyota Prius (even Detroit's hybrids run on Japanese batteries). Without federal funding to develop electric cars and the batteries that power them, America will become dependent on another foreign power to fuel its mobility. "Are we trading our dependence on foreign oil to a dependence on batteries built in foreign countries?" asks Chrysler Vice Chairman Jim Press, a former Toyota exec who will be in Washington next week making his case.
That new approach is a clever strategy, showing that Detroit isn't deaf to the politics of persuasion. But has it come in time? And if it hasn't, is Detroit doomed without the federal aid? Press says Chrysler needs the loans to fund the green vehicles that give his company "an opportunity to have a future." Henderson is more circumspect when asked whether GM will fail without these loans. "We don't have [the loans] in our budget today," he says. "It's not like I'm assuming that somebody is going to disburse billions of dollars to me in 2008." And if Congress doesn't come through? "We develop contingency plans," Henderson says, plans that likely include additional painful cutbacks. "In the end," he says, "that's what we need to do to fight another day."
The question remains, though: Did Detroit put up enough of a fight to win its Washington rescue?
© 2008
- 1
- 2
Discuss