Let’s face it: people don’t like the American auto industry.
Scratch that: people hate the American auto industry.
There are a lot of reasons to hate it: unionized workers who make crazy money that is out of sync with reality, execs who seem to have a tin ear to what Americans really want, cars that aren’t made well, and a lack of fuel-efficient alternatives.
Americans have every reason to be upset at an industry that hasn’t performed well. Heck, I am upset at this industry, and my parents are GM-retirees who are proud union workers.
A few months ago, I even said that the Big Three should die. If they can’t make it on the free market, then they should die.
And then Lehman Brothers happened.
Remember them? Back in mid-September, the Feds decided not to bailout the investment bank. Many thought this was a good thing: after all, we are a capitalist society and if private businesses make bad decisions, then they should fail.
Well, we know what happened: the financial markets went wild and the Feds had to step in after all to keep the financial system from failing with the $700 billion bailout.
Now, I understand when people say that it sets a bad precedent that we should be bailing out companies like Ford and General Motors who basically got themselves into this mess.
As a Republican, I have a hard time lending GM a hand.
As an environmentalist, I consider it poetic justice that the domestic auto industry is on the ropes after producing vehicles that were gas-guzzlers and polluted the environment.
But as the son of two autoworkers, all I can think about is what could happen if we allow the Big Three to go hang. Jeffery Sachs notes that the closure of the automakers could be catastophic:
the sudden closure of an automaker would be catastrophic, possibly pushing our economy from recession to depression. Because of the impact on parts suppliers, the shutdown of one company would imperil domestic production across the board, and the jobs at risk include not only the 1 million in vehicle assembly and parts but millions more that would be caught in the resulting cascade of failures. The industrial Midwest — especially Michigan, Ohio, Indiana, Illinois and Tennessee — would be devastated, and the shock waves would reverberate across the world.
For a long time, I’ve tried to ignore that this was personal for me. But the fact is this IS personal for me. I grew up in Michigan during the 70s and 80s. I grew up during economic downturns and have seen the result. Yes, Michigan and other states should have diversified. Yes, the United Auto Workers were greedy. Yes, the Big Three made sure that CAFE standards were never raised. But I also know of my parents and several cousins and uncles who put in long hours to make cars and put bread on the table. My parents helped put their son through college and for that, I am thankful. There are many people like my Mom and Dad, who have put in long hours who are in danger of losing their livlihoods and who wonder how long will their jobs be around.
It’s easy to make remarks about how we shouldn’t help the Big Three and a lot of them make perfect sense. But I also think that many of those making these assumptions forget that there are real people who will be affected by whatever happens. We forget that states like Michigan and Indiana and Ohio will be pushed to the limit in trying to help these displaced workers. Social services would become strained. Local economies might crumble.
I’m not saying that we should give the automakers blank checks to keep making a mess of themselves. Fire the executives. Renegiotiate the union contracts. Tell them they have to accept higher CAFE standards if they want money.
But I think in the end, we can’t simply allow a portion of the nation to go to hell because we think it feels good. The price for that bit of schadenfreude is far too great.