Monday, December 15, 2008

Two kinds of "bailouts," two kinds of responses

This may sound hypocritical of me, but while I excoriated the bailout for the finance "industry", I'm all in favor of helping out the auto makers. Three real world reasons: 1) The auto industry did not facilitate (or perhaps more accurately, cause) our economic meltdown, so they shouldn't necessarily be held accountable for its effects; 2) it is one of the last actually American industries left standing, employing hundreds of thousands of Americans earning decent wages; and 3) the amount of money involved is so miniscule comparatively that it doesn't engage my natural gag reflex. There are also a couple of political/ideological reasons: 1) The people who are against it are only interested in taking down the last truly strong union--the UAW--that represents workers (there are immensely strong unions in sports and entertainment, but by and large, the main beneficiaries of those unions are fairly wealthy already); and 2) the only people voting against it are Republicans, which these days automatically makes it something any good Democrat/liberal should fight for.
As with the bailout we were forced to swallow for the financiers, I support this only with a few serious reservations. The managers of the Big 3 need to be fired. How far down the decision-making apparati this "restructuring" needs to go depends entirely on how far down we can trace the responsibilities for being stupid. I realize selling SUVs, for a prime example, was a sound business move for an industry needing to hit quarterly revenue targets, but the only reason that's even of any importance is because these companies have become useless at taking any risks whatsoever that might affect the stock prices in the short term. (By the way--all American companies, with a vanishingly small number of exceptions, are useless in those terms. I digress.) We have known for quite a while that our oil-based energy system is in decline, and none of the Big 3 pushed for alternative fuel vehicles until Toyota (and to a lesser extent, Honda) showed them that yes, Virginia, hybrids will sell here in the USA, and in eye-catching volume, with little to no hard sales pitches at all. (When's the last time you can remember seeing a TV ad for a Prius? I can't recall ever seeing one . . .)
I have no problem giving the auto industry help, as long as we the people get something in return, which we are so obviously not getting from the financiers. Whether it be equity in the companies, interest on the loan, a say in how the companies are run, or something equally valuable--perhaps a meaningful restriction on executive salaries?--I don't much care, but we need something. Otherwise, even if we get the current bosses capped, we will run into a "meet the new boss/same as the old boss" syndrome here as well.
To sum up, the finance world may have been "too big" to fail (but even at that we can't figure out how to save it properly; don't get me started!), but the auto industry is definitely too important to fail. It has been the backbone of our workforce as a country for nearly a hundred years, and its salience in that regard has only increased given the evaporation of all our other homegrown manufacturing and knowledge-based businesses since the Reagan era began. We can save it, and we should. It's not that difficult a call, really.

Labels: , , , ,

1 Comments:

Anonymous Anonymous said...

Dear Mr. Surly,

I am so tired of hearing the right outright lie about the UAW. I personally know someone on the line in an auto plant who is being laid off for two weeks starting next Monday. Who makes less than I do. Who has 12 years of seniority. Who works hard and just wants a fair wage and decent benefits. Whose union has been making concessions for years. Yet, nobody seems to mind when the banks come hat in hand and no one can make them account for their actions. Ticks me off.

Sincerely, the cranky girl north of you.

2:08 PM  

Post a Comment

<< Home