Today in congress, representatives from the Big Three American auto manufacturers are making their case for low-interest loans to keep those companies afloat. We're also hearing a lot from pundits, bloggers, journalists and academics about how (maybe if, depending on who you're listening to) these companies can survive, even after these loans are given.
Does Detroit need to take stock of their chronic efforts to thwart increased pollution and fuel efficiency standards? Yes. Do they need to work harder at designing cars that appeal to American consumers, not just rental fleet owners? Yes. Do they need to work on quality and providing more value for the customer’s dollar? Definitely. Do they need to restructure their corporations and modernize their factories to more quickly adapt to shifts in demand, ala "The Toyota Way?" You bet.
Yes, there are a lot of good, well intentioned ideas out there to not only shore up the Big Three temporarily, but also to help them compete more aggressively in the future.
But you know, there's one thing that I haven't heard hardly anyone mention. That huge, 800 pound gorilla in the room: Healthcare costs.
A few years back, Toyota Motor Corporation was looking to build a new North American plant. After many months of negotiations with a short list of states and municipalities, Toyota finally decided on the location for its new North American factory: Canada.
The reasons Toyota cited for this decision were several, but key among them was healthcare. Yep, despite what conservatives would have us believe, Toyota would rather pay Canadian taxes than pay for American healthcare. They're willing to tolerate stricter government regulations instead of dealing with the American HealthcareInsurance Industrial Complex. Indeed, it would seem that Toyota would rather take their chances with Canada's liberal worker's rights laws and that country's strong and aggressive Unions, rather than take advantage of the lower prevailing wages and relatively gutless unions in one of our southern "right to work" states, because, apparently, our healthcare system sucks that bad.
Now, it's a bit simplistic to attribute Toyota's decision solely to healthcare -- they cited other reasons as well, such as educational attainment. But, it does speak volumes that one of the richest corporations in the world would rather do business in a country oft characterized as a "socialist" country rather than the corporate Valhalla the Republican Party has tried to create here in the US vis-à-vis its love affair with laissez-faire economic ideals.
By now, if you haven't heard that over $2000 of the price of every GM vehicle you purchase pays for healthcare for existing employees and retirees, you've been living under a rock. The Big Three have not been shy about making this known at any opportunity. Healthcare costs are an albatross around their neck, and they know it. About a year ago, I opined whether or not 2008 would be the year when GM, and maybe Ford, would finally come out of the closet and announce to the world that they support Universal Healthcare coverage. For the last several years, I've heard rumblings in various journals and trade publications that GM execs felt a single payer system where the costs of healthcare were borne by society at large, and not just their customers, was becoming more and more necessary, but, there was still some sort of taboo with just coming out and saying as much.
I believed this year would be the year that changed, but alas, that seems to not be the case thus far.
The simple fact is this: anything we do today for the Big Three short of providing taxpayer-funded healthcare to all Americans is simply a stop-gap measure. Any money we loan them will simply allow them to hold on for a while longer. If they haven't been smart enough up to this point to realize they need to produce more economical and market-relevant cars as their Asian and European competitors are doing, then yeah, we can pass legislation to force them to do it. If they cannot get their act together and make their management and manufacturing more quickly adaptable to radical changes in the market, we might be able to stipulate strict oversight as part of any bailout plan to teach them what their competition has thus far failed at teaching them. And, one day, these companies may be as lean, mean, and aggressive as their foreign competition.
But, they'll never be able to compete as long as they are part of a healthcare system that is sucking the lifeblood out of our economy. We spend a greater percentage of our GNP on healthcare than countries that have Universal coverage; yet, we cover fewer people and get far worse results. A Big Three bailout that does not address this country's fundamental across-the-board healthcare problems can only have two results: Merely delaying those companies' inevitable collapse; or allowing them to survive so that they may continue to send those good-paying blue collar jobs to other countries.
If the former, well, I guess I was wrong, and these people have not learned their lesson, so why should we bother? If the latter, then the hope of saving millions of good-paying American jobs is a pipe-dream anyway, so again, why bother? I quite enjoy my Toyota, after all.