T Nation

US Auto Industry Is Dead


#1

Maybe not dead as the author suggests, but very sick indeed. The author makes some suggestions as to what he believes the answer top be, problem is these "solutions" he suggests center around what the government can do, without any suggestion as to what the individuals in the rust belt can do.

Michigan in particular is way too dependant on the auto industry. GM's woes don't just affect the workers at GM, the state of Michigan has a certified shit ton of satellite companies that depend on the auto industry, creating singular trickle down economy. When the big three hurts, the entire state hurts.

This situation doesn't just affect the factory rats either. The states budget woes have affected every municipality that counted on revenue sharing to fund public safety. Lots of fireman and cops are getting laid off and creating dangerous situations in alot of cities and townships. Not good.

I think that the UAW is partially to blame for this mess, although I don't believe they carry the entire burden. While the union has definitely promoted laziness and inefficiency, GM hasn't developed and marketed vehicles that the public really wants. Without getting into the debate about alternative fuels, I would personally like to see a serious bio diesal fuel truck. The tuna can sized alternative fuel vehicles aren't cutting it IMO.

Anyways, sorryabout the meandering long winded post. I just got to thinking about all of the rust belts woes and wanted to pick everybodies brain as to what they thought about the US auto industry as sick as it is.

The article has, IMO, too much of a union democrat slant to it, but it did make me wonder what the fix is.

-Bigflamer

http://www.latimes.com/news/opinion/commentary/la-oe-bakopoulos22nov22,0,7192120.story?coll=la-news-comment-opinions

Silver spoons and rusted wrenches

By Dean Bakopoulos, DEAN BAKOPOULOS' novel, "Please Don't Come Back from the Moon," about the disappearances of unemployed men in a working-class Detroit suburb, will be released in paperback by Harcourt in January.

THE AMERICAN auto industry is dead. With General Motors announcing, days before Thanksgiving, 30,000 more layoffs and nine plant closings, the Rust Belt just got the final strike of the sledgehammer. When GM finally goes down for good, all the rusted remains of that region will crumble.

My grandfather was a UAW man who slapped dashboards into Mustangs at the Ford Rouge plant just outside Detroit; my grandmother sweated out the first shift at Cabot tool and die. Immigrants with no formal education, their union wages allowed them to provide their family with a nice home, two cars and, for my mother, a college education, paid for in cash.

Later, my grandparents' savings helped my family buy a home. After my parents' divorce, those resources were instrumental in helping my mother maintain a car and pay unexpected bills, school tuition and property taxes. A decade later, when my wife and I bought our first home, my grandfather's long-saved UAW wages gave us much of our down payment.

Most citizens of the Rust Belt ? that center of American manufacturing and a longtime Democratic stronghold ? can thank relatives who toiled in exhausting factories for their current blessings.

But for my generation, born at the end of America's Golden Age (I was born in 1975, post-Vietnam, post-Watergate, post-energy crisis, post-labor), life in the Rust Belt has been a steady process of downward mobility. I was lucky enough to write a novel about the Rust Belt that got me out of debt and low-wage work; most of the people I write about have not been so fortunate.

In times of crisis ? natural disasters, terrorist attacks, economic collapse ? the federal government develops a relief plan. Now the Rust Belt is in serious crisis and needs relief.

My native state of Michigan leads the nation in unemployment and has a pitifully low tax-base; Wisconsin, my adopted home, does not fare much better. Cities ringing the Great Lakes ? Buffalo, Cleveland, Gary, Milwaukee ? weather not only the brutal winter but scores of plant closings and thousands of lost jobs each year. The holidays get bleaker and bleaker. This year, even our beloved Green Bay Packers ? facing their worst season in memory ? seem affected by the general malaise of the region.

Christmas miracles will not occur this year. The Big Three, and all the industries that grew up alongside them, will not have amazing recoveries and send out callbacks to hundreds of laid-off workers.

GM will be sick for a long time; it's silly to think otherwise. We have to quit whispering optimistically outside the dying patient's door. We have to plan for death.

We need a New Deal for the Rust Belt because the old deal has gone sour. Even the coveted auto industry pensions face imminent demise.

There are three things that only the federal government can do ? must do ? to restore American dreams to the heartland. Or else we will truly face, as Ronald Reagan said in 1981, "an economic calamity of epic proportions." But, with deference to old optimistic Dutch, trickle-down tax cuts aren't the answer. Tax cuts have had more than two decades to trickle down; they remain frozen at the top.

First, we must implement a system that guarantees universal healthcare. American industry ? from National Steel to Starbucks ? would benefit from having the burden of health insurance lifted off its back. Why else would GM be aggressively investing in nationalized-healthcare Canada while U.S. plants shut down? Without having to worry about health insurance for their families or their workers, a whole new generation of entrepreneurs just might take risks ? opening small businesses and inspiring innovation across the region.

Second, we must provide concrete steps for workers seeking to retrain and acquire new job skills. When George W. Bush was campaigning in blighted Ohio in 2004, this was his mantra: Retrain, retrain, retrain. It makes no sense for debt-ridden, jobless Americans to take out more student loans on an economic wing and a prayer. The government needs to subsidize community colleges in high-poverty areas so that workers can go back to school for free.

Finally, we must reinvest in the infrastructure of crumbling cities and towns. A new public works program needs to be implemented. But the states of the Rust Belt don't have the resources to pull off such a plan. Only the federal government has the resources to put thousands of Midwesterners back to work repairing roads and bridges, demolishing vacant buildings and rehabilitating the nation's urban centers so that they have usable, developable and livable spaces.

Our current leadership in Congress and the White House will not take any concrete steps toward these kinds of remedies. Those born with silver spoons rarely come to the aid of those born with rusted wrenches. We're either going to continue the ridiculous trend of tax cuts that essentially pad the trust funds of the wealthy or we're going to reinvest in the region that helped the United States win its many wars and made us the world's sole economic superpower. Otherwise, this region will soon rust to dust and ash.


#2

I completely agree with your suggestion. Embracing alternative fuels in larger sized vehicles would boost revenue among the big three. While hydrogen fuel cells are still a long way off, bio diesel is economically feasible, we already have the technology, and its a hell of a lot more eco friendly. Every McDonal's, Wendy's, Taco Bell etc. is a potential fuel source. I heard that Willie Nelson's tour bus runs on bio diesel. Switching from fossil fuels to bio diesel will enhance world peace. Muslem dementalists won't have to so sell any more oil to what they perceive to be the Great Satan. That should make them happier. :slight_smile:


#3

Doesn't Chevy have a hybrid full sized truck, Silverado?

Doesn't Ford have a hybrid Escape?

For whatever reason foreign cars are seen as more dependable and long lasting. The problem isn't that GM needs to make better cars, (in fact, domestic cars are running right even with dependability and longevity with foreign cars, some are even better) the problem is that buyers don't trust them. Unfortunately the only solution to that problem is time.


#4

arrogance in the 70s is what killed the industry

the japanese copied then improved, the US cars of the period were overweight underpowered sloths. The management seemed to think that this was ok

however we are all pretty screwed as the labour costs to build anything in europe or the states is soooooo much more than the same thing made in china, that we just can't really compete

In England my friend runs a packaging company, they were making boxes for chinese made food processors. The cardboard boxes cost more to make in England than the whole food processor shipped from china

So we need to get a lot more self sufficient, or no one will have a factory job in 5-10 years


#5

Alternative fuels will not help.

Germany and Japan are kicking the American auto industry's tail and have been for decades.

Stick a fork in GM and Ford.


#6

What do we do with spent batteries from hybrids?

Who will service your hybrid out of warranty? The dealer...pay up.

Conservation is the only way and/or phasing in a $1 gasoline tax country wide over then next 3 years.

Everything else is BS.


#7

How is a $1 tax on gasoline going to save the domestic auto industry?

Unions have done a very good job of systematicly choking the life out of the Big 3.

Get rid of the bloated, over-paid union worker, and the industry might have a fighting chance. You can't swim very far with a millstone tied around you neck.


#8

Twentieth Century Motor Company.
I hope quite a few of you get the reference...


#9

While the UAW certainly deserves a good bit of the blame, greedy shortsighted management of the American automakers also deserves a lot of the blame.

Artificially cheap gas propped up the American manufacturers in the 1990's with the SUV craze.

Our government did not help by not imposing proper safety and mileage standards on SUV's either.


#10

I'll have to agree with ya there RJ. The UAW is the epitome of the culture of entitlement. Talking about what the company owes them and what they are entitled to from the company. I've never once heard a GM union guy express any gratitude towards the company for providing him with a job.

This attitude of companies being in business to provide jobs is a load of bull. Companies are in business to make money. PROFIT. That dirty word that causes hardcore libs to have a siezure, piss their pants, and cry.

As a side note, I had a GM union man once try to lecture me on corporate profit. His idea was that companies should only be allowed to make a certain amount of profit, after that any profit over and above that cieling should go to the workers. WTF!!!

Yea, the UAW is definitely part of the problem.


#11

decent post. Right up until the shit about more taxes. Sure, that'll fix the problem. More taxes.

Brilliant.

Marmadogg for president.


#12

I also fail to see how on earth is a gas tax going to save the auto industry? Please explain that one to all of us.


#13

This thread had some good info regarding the labor unions. The member I got into quite a lengthy discussion with ended up being one of the "good" UAW members.

http://www.t-nation.com/readTopic.do?id=654659&pageNo=0

I sure hope it doesnt die being that I am from Michigan.


#14

Artificially cheap gas prices? Please explain what this is.

Are you saying that big oil sold gas at prices lower than it cost to produce them? Or at the very least sacrificed profits to help out the consumer - or maybe the auto industry?


#15

Perhaps artificial is the wrong word. I supposed I should have called them comparatively low.

Our gas prices were (and still might be) lower than gas prices in the rest of the industrialized world.

This has allowed Detroit to continue to pump out gas guzzlers aimed soley at the American market.

As soon as gas prices climb to what the rest of the industrialized world is paying gas guzzlers don't look very attractive the the American public. They are not attractive abroad either.

Now Detroit does not have much to sell because they mostly ignored innovation in cars in order to push gas guzzling SUV's.


#16

Many of my friends work(ed)in the auto industry here in Michigan. They were union dudes. Their stories about working in the shops were eye-opening, to say the least. If I believe only half of what they told me, the UAW has got to go. They have brought the auto companies to their knees while collecting the sweetest pay and bennies packages anywhere in America.
The greed of the 70's, 80's and 90's autoworkers has put jobs for future generations in peril.


#17

Absolutely spot on.

For so long, the auto unions have demanded more and more from their employers. Now the weight of their demands are causing those same companies into bankruptcy, or at the very least, massive redudancies and renegging on pension entitlements.

How is that helping the employees?


#18

Here we go!

-While it may be true that UAW workers are overpaid(I don't know, never worked on the assembly line), why does everybody seem to forget about the executives making 7 and 8 figures who apparently can't seem to mange their way out of a paper bag? Fault doesn't lie solely on the union, although they surely share some culpability.

-American cars suck!! That's common knowledge. The only reason people buy American at all is out of a sense of patriotism, or slightly lower price points(and that gap is narrowing). One other reason is that American auto makers have marketed the luxury SUV better than anyone, but people are now waking up to the impracticality of owning one. The big three should have seen this coming and planned accordingly. They put all their eggs, for the most part, in one basket and rode the wave as long as they could. Again, this has more to do with management than the unions.

-What the big three need to do at this point(if it's not too late) is start building vehicles that can compare to foreign cars, in the same class, in terms of quality and innovation. Then they need to convince a wary public that their cars are just as good. Just saying it won't it. Anyone who sits inside an import and domestic car can immediately tell the difference.


#19

I agree with this sentiment as well. I think that a lack of competition has hurt the US automotive industry beyond repair. By only pursuing a single market (the US), they have not had to change with the times, or sink the money into research and innovation that their international competitors have had to. The result is that you have a copmany like GM that targets a handfull of products at a single market. That market has now changed faster than GM has.

I think there are a lot of executives who should be shot for the way they have run companies. But once again, if these companies had been in a competitive environment, than this sort of thing would have been reduced.


#20

OMG...that is complete, utter, and total bullshit. You are just following along with what the rest of society thinks. There is not one single shred of truth that foreign cars are any better than American. Look at the 300c, Caddy CTS-v, Mustangs...And there's no way a foreign truck compares to an American truck. I'm not saying that American cars are better but they are definitely on the same level.