Lately I've been disturbed by the sheer amount of resistance toward any sort of bailout of automakers. Free-market conservatives have relished the death of the bailout bill in the Senate, which they actually seem to count as a victory. It's as if Ford, GM, and Chrysler were simply failed companies who deserved to be swept aside, instead of the backbone of our economy.
But it's not just the free-market conservatives who provide the resistance. I've noticed that even among those who support a bailout, there is a certain amount of reluctance to actually follow through. The reasons for this can vary. Some feel that the Big Three don't deserve money because their products have been an environmental disaster. Others would like to see improved fuel efficiency standards on American cars. Others still feel that American cars are junk that shouldn't be driven anyway.
There's a problem here. If we don't remind ourselves that fighting for the automakers means fighting for union workers, we will all lose. I'm convinced that conservative Republicans are aware of this, and are pushing the notion that "this is all the automakers fault", because they know that if we can't feel the slightest bit of sympathy, they will be able to destroy the UAW.
I apologize if this diary is a rushed, disjointed rant, but I have a lot to say and I'm typing fast. Here we go...
The purpose of this diary is to address conventional wisdom, which states that the Big Three automakers are responsible for all of their problems. This is not to say that they are perfect by any means, rather, I believe that their present situation is the result of circumstances beyond their control, and therefore, they deserve government help.
For example, conventional wisdom states that American cars are not as well-made as their foreign counterparts. But this is difficult to prove. Google "American cars vs. Foreign cars", and I can promise you that you will find blog after blog, comment thread after comment thread, full of people who have had a bad experience with one automaker, and therefore prefer another. Good for them. But do these personal stories actually tell us anything about car quality? Not really. As we all know, the plural of anecdote is not data.
A more reliable source of information is an independent analysis, for the simple reason that these analysts are usually automobile experts who test more cars than the average American consumer. Last time I checked, analyses, like this one, didn't rank American cars that badly.
Look, if I thought American cars were hunks of junk, I wouldn't be calling for a bailout. But I truly believe that the Big Three are simply suffering from an unfair perception of poor quality that they haven't actually deserved since the 1970's.
Moving on...
Another little bit of conventional wisdom states that American cars get, on average, worse gas mileage than their foreign counterparts. While this may be true, it is an oversimplification that fails to take several factors into account. We should not forget that during the 1990's and early 2000's, large, gas-guzzling SUVs were in extremely high demand. Gas was cheap and people thought they were safer and more comfortable. It would have been a poor business decision not to produce so many.
Yes, it's true that American companies did not invest in small cars as much as they should have, but we must not pretend that they aren't trying. It has been difficult (mostly because they are desperate for cash and unfortunately, there is more profit to be made with a $50000 SUV than a cheap consumer car) but American companies have done a good job adopting hybrid technology and other fuel saving methods. Ford made the Escape, and SUV that gets the gas mileage of a small car, which should appeal to those who want a large vehicle without a large gas bill. GM uses technology in their large trucks and SUVs that shuts of engine cylinders when they are not needed, which saves fuel. They are also planning to release the Chevy Volt, a car that will run on battery power alone. Finally, we cannot forget small consumer cars like the Ford Focus and the Chevy Aveo, which are both reliable, efficient, and cost-effective vehicles.
So all in all, the business model of American companies isn't looking too bad.
Don't be fooled when people tell you, "oh, foreign cars are built in America and American cars are built in foreign countries, so it doesn't matter." It does matter. American cars are considered domestic because they are made up of at least 75% domestic, union made parts. Foreign cars, on the other hand are made of parts from all over the world, and are assembled by non-union labor. Buying American is still good for the American economy and American workers.
Supporting unions is important. Unions have fought for labor rights for years, and they have weathered countless assaults from free-market conservatives. Union workers do not "suck car companies dry", for they make about the same (sometimes less) than their foreign counterparts. Besides, labor costs only make up about 10% of the cost of a car, and American cars, as of late, tend to cost a bit less than foreign cars.
The one thing that I can honestly say is hurting American car companies is the cost of healthcare. Unlike foreign companies, American automakers have countless retirees that require pensions and health benefits, which creates an enormous legacy cost. But this isn't the end of the world for the Big Three, for one thing, foreign companies have not operated in the US for near as long as the Big Three, and it can be expected that they too will eventually have to pay for large groups of retirees. Also, the federal government could ease the pain of the Big Three by adopting a system of national healthcare, thereby saving all companies a lot of money.
So why do conservatives insist that we should let American companies die? They may tell you that its because these companies have run a bad business, but this just isn't true. Their real motive is simple: If GM, Ford, and Chrysler are allowed to live, the UAW will continue to operate. The very existence of any union is an insult to many conservatives. More importantly, it is possible that the Big Three, along with their unionized employers, could one day be a powerful lobbying force for nationalized healthcare, once they figure out that it is in their best interests. And you can bet that this is scaring conservatives everywhere.
If that's not enough to convince you, than perhaps you should think of the thousands of workers who depend on these companies. We must not let them down.