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Bailing Out the Automakers

by DAVID MACARAY

Let’s put two things on the table immediately, two things which, while not exactly logical, are nonetheless meaningful.  If you’re looking for steel-trap logic or cold, bottom-line infallibility, you won’t find them here.  But if you’re willing to consider a few realistic, peripheral considerations, some of this should make sense.

First, even though we’re being bombarded on all sides with news of economic doom, let’s not delude ourselves.  The Big Three automakers aren’t just another industry, so let’s not pretend they are.  Let’s not pretend they’re a chain of coffee joints or convenience stores, or even a big-time outfit like American Express, who, reportedly, is already sniffing around for some of that government money.

Detroit is different.  Automakers are not only the largest manufacturing industry in the United States, they are, undeniably, the most glamorous, prestigious, loyal and uniquely American corporate enterprise in our history.  They’re Industrial America’s version of the Liberty Bell, the Alamo and the Lincoln Memorial, all rolled into one.  Smirk if you like, but it’s true.

Americans shouldn’t have to be reminded of our 100-year romance with cars, or the fact that it was we, the United States, who first mass-produced automobiles and introduced them to the rest of the world.  And the world fell in love with American cars as a consequence.  Pancho Villa drove a Ford Model-T.  The Maharaja of Kapurtala (Punjab, India) drove a ’59 Chevy Impala.

I bring this up only to establish the fact that when we talk about the auto industry, we’re talking about a legacy enterprise, a cultural icon.  And I’m saying that people who cavalierly assert that allowing one or more of the Big Three to go bankrupt don’t have the first clue as to the enormity of what they’re suggesting.

Besides the 240,000 people who work directly for Chrysler, General Motors and Ford, there are an estimated 2.7 million more who work in related industries, who supply parts, raw materials, sales and technical services.  It’s been predicted that a collapse of the auto industry could affect as many as 3 million people, a full 5% of manufacturing jobs in the U.S.

Second, if history doesn’t matter, if this conversation isn’t about what was, but about was is—if it’s about money, and not cultural icons and such—then let’s talk money.  Indeed, if it’s their hard-earned money that American taxpayers are concerned about, then fine, let’s talk about that.  Let’s talk about how we spend it.

We’ve already blown close to a trillion dollars on an unwinnable war (not to mention the loss of life and destruction of a country), and continue to pour an additional $14 billion a month down that same bottomless rathole.  On a dollar for dollar basis, this has been a monumental debacle, arguably, the greatest foreign policy blunder in our history.

Still, from what we’re hearing, American taxpayers and their representatives are having a problem with giving $25 billion worth of economic relief to the struggling Big Three.  They are objecting to this relief on the grounds that [drum roll] “it doesn’t make good business sense.”   Please.

Not only have we had, literally, billions of dollars stolen from us by corrupt Iraqi officials and their political stooges, we’ve paid billions of dollars to Halliburton, Blackwater and scores of lesser known but equally greedy private contractors, all in the name of “patriotism.”

Yet, given this record of pissing away money like drunken sailors, American taxpayers are now suggesting that it’s time to get all stingy and wise and fiscally conservative, drawing the line at bailing out America’s most hallowed industry—all in the name of “tightening their belt.”  If that’s what’s happening here, give me a goddamn break, people.

On the other hand, if this is about assurances or guarantees, that’s a whole other deal.  That’s an eminently reasonable request, one we should pursue.  Instead of giving away billions of dollars with no strings attached (as we’re doing in Iraq), let’s attach some economic and environmental requirements.  Insisting that Detroit develop a car that gets 85 mph, with drastically reduced carbon emissions, would be a good start.

Let take this opportunity to reinvent the car business, but this time in the image we want.  For crying out loud, we’re the country that put a man on the moon and invented the reusable condom.  Surely, we have the technical expertise and creativity to make a radically fuel-efficient automobile.

But it’s also time we finally acknowledged the elephant in the room.  That elephant is health care.  The U.S. auto industry, which spends upwards of 30% of its payroll on employee health insurance (including premiums and administrative costs), competes with companies whose governments underwrite employee health care.

Even though labor costs account for, roughly, 8%-10% of the price of a new car, health insurance is killing the industry.  Right out of the chute, before anything’s been bought or sold, the Big Three is already thirty cents on the dollar in the hole.  Given that crippling discrepancy, it’s fairly amazing that Detroit has managed as well as it has.

Of course, the Republicans in congress—the same faux-patriots who prevented us from joining the rest of the industrialized world in obtaining national health care by waving the hysterical banner of “socialized medicine”—don’t want to blame health insurance for contributing to the problem.  Instead, they want to blame labor unions.

Instead of blaming Big Pharma and Big Insurance, they’re blaming the UAW; they blaming working people—people who are making $48,000 a year, hanging on to their middle-class identity by their fingernails, trying to make a living.

By bailing out the automakers (albeit with stringent conditions) we’ll be saving one of America’s truly valuable institutions.  We’ll be giving it a second chance.  Twenty-five billion dollars is less than we spend in two months on this war.  Doesn’t Detroit deserve a small fraction of the generosity we’re showing the Iraqis?

DAVID MACARAY, a Los Angeles playwright and writer, was a former labor union rep.  He can be reached at dmacaray@earthlink.net

 

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David Macaray is a playwright and author. His newest book is How To Win Friends and Avoid Sacred Cows.  He can be reached at dmacaray@gmail.com

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