Car companies: Save or not save?
It's terrible to contemplate the lost jobs and the resulting suffering that the failures of the American auto industry have brought to our country.
If you understand what has happened, it's also impossible not to be angry -– no, furious –- at the foolish, narrow-minded, short-sighted, greedy executives who have killed or nearly killed what once was our greatest industry.
In some ways, they have been even more bullheaded and misdirected than their counterparts in the world of finance.
The auto industry, for one thing, had more and clearer warnings about their impending downfall than did the bankers, brokers and insurance grubbers, and the warnings started years earlier. Also, the essential part of what needed to be done was obvious to anyone with no more than an average ability to navigate life.
Lee Iacocca's 2007 book, “Where Have All the Leaders Gone?” was very clear about the fact that the industry had too many models, too many brands and too little awareness of the future, for example, but it was far from the first such warning. Many people wrote and talked in recent years about the need to improve quality and to begin shifting production from gas-guzzling behemoths to smaller, more efficient vehicles.
With the blind arrogance that is virtually the signature attribute of American corporate executives, but is multiplied by ten in the car business, the auto bosses refused to hear what they did not like.
The extreme right of the Republican Party –- which is to say, the people in control of that party –- now claims that it's all the fault of the people who do, or did, the physical work of building the vehicles. If they hadn't made solid, middle-class livings, and had good health care coverage, and livable pensions, the industry would have been just fine, in their absurd rewriting of the facts.
Just Monday (April 6), my local birdcage liner carried an op-ed piece by the Chicago Tribune's Steve Chapman declaring that President Obama is wrong to try to save the American car makers, mainly because their downfall would/will take down the unions. To Chapman and his ilk, anything that will do major damage to labor unions is wonderful, regardless of how badly others, and the country itself, are hurt. Their belief in the rights of the very rich to rule unchallenged is religious in its depth and passion.
But here's a rub: If you know what has happened, it's impossible not to be more than a little angry at the auto workers, too.
That's not because they managed through their unions to get good pay and good benefits –- I don't know when in this country it became evil to get a decent hunk of the profits from what you produce, somehow wrong to get enough of the pie to live comfortably –- but because they too solidly backed the self-destructive moves of the people who ran the companies they worked for.
How often over the years did you see the “buy American,” anti-Japanese bumper stickers and hear rants from union officials, and rank-and-file workers about it being anti-American to refuse to buy Detroit junk even though much better products were available at better prices?
We all saw the angry lectures on television, and several times I heard, in person, union members ranting about how buying Hondas and Toyotas was little short of criminal when we could purchase rattling, rust-prone Pontiacs, and Buicks with mushy suspension and sloppy steering, and Fords with windshields that tended to crack once a month, and uselessly gigantic vehicles that got less than ten miles to a gallon of gasoline.
Of course, the ranters didn't mention the innumerable faults, just that somehow it was our duty to pay excessive sums for the garbage rolling out of American factories.
Here folks, git yerselves a nice a three-ton Yugo. Only $52,000. How about a shiny version of the Lada that gets maybe 19 miles per gallon on the highway on a good day; only $37,000.
Up until quite recently, auto industry unions had enough clout that they could have asserted pressure on the companies to build better, more efficient, more reasonably priced vehicles. Instead, they added their voices to the chorus of industry denial and refusal.
Personally, I'm not sure what I want to see happen with the auto makers.
America should make things, not just shovel money -– or, rather, computer numbers that represent money –- from one place to another. And Americans should have the opportunity for work that provides solid incomes, security, health care and decent homes and, equally important, for jobs that provide them with the pride and satisfaction of producing something useful, something that works and has a real purpose.
If the American auto industry is ready to buckle down to designing and producing vehicles that we need and want now, I'll blow the horn for government support, and back politicians who will fight to make the industry whole and well again.
Sadly, there's no sign that it's ready. American car companies, and oil companies and some unions, fought to prevent Congress from mandating the present very modest goal of average fleet fuel consumption of 35 miles per gallon by 2020 – eleven years from now. European cars surpassed that goal a few years ago; they now average better than 40 miles per gallon and are improving annually.
(A grinding kicker to those mileage facts: According to a report by MSNBC.com, two-thirds of the 113 most fuel-efficient car models sold in Europe but not available in this country are made by American car companies or by foreign manufacturers with large sales in the U.S. -- companies such as Toyota and Nissan.)
Even more sadly, it is not at all clear that Americans –- American industry, or what's left of it -– still have enough of our self-proclamed “knowhow” plus the will to be able, in this country, to design and build attractive cars that also are fuel efficient.
There's quite a stink among the true believers of the right about the firing of General Motors CEO Rick Wagoner, and quite a few people not on the right are wondering by what authority the Obama administration told Wagoner to take a hike.
“Unprecedented” is a word being thrown around frequently, but inaccurately. You may recall that the government also demanded new top executives for AIG, Freddie Mac and Fannie Mae.
By what right? When it's public money, the government has the right. Obama was perfectly correct, I believe, in saying that if General Motors wanted more taxpayer dollars, it would first have to replace Wagoner, who was obstinate beyond any semblance of reason in his adherence to the cult of big and inefficient vehicles.
Wagoner was a force behind the commercialization of the Hummer at exactly the wrong time in history, as noted a few days ago by Frank Rich of the New York Times, and he pushed hard for still greater reliance on huge SUVs exactly at the time the market finally began to shift toward more affordable, fuel efficient and less polluting vehicles.
The problem is that getting rid of the chief executive of one of the Former Big Three is a useless gesture if much more isn't done quickly. Wagoner -– a Harvard MBA, not surprisingly -– is a career General Motors guy. Most of the people on the next few management levels below him also are career GM guys. And the same thing applies, for the most part, at Ford and Chrysler.
Car company culture is as deeply embedded as it is wrongheaded. Everyone who has any power has been brought up in the business, and the people who have advanced are those who bought in entirely to the beliefs of the people who have run the companies for decades. Scorn is heaped on fuel efficient, small and inexpensive. Big and powerful is good. Bigger the better. Trends? Fugeddaboudit.
The Minneapolis Auto Show occupied the city's Convention Center for more than a week in late March. GM North American Vice President Mark LaNeve showed up late in the show's run to dispense wisdom to dealers and the press. He was quoted in the Star Tribune as saying that while the company has “introduced an onslaught of new fuel-efficient and crossover cars” GM is “already the truck leader, and we plan to stay there.”
LaNeve also declared that “Americans are not naturally inclined to buy small cars,” although he allowed that “they want good fuel mileage.”
Translated: GM is slowly and reluctantly bringing out some fuel-efficient cars, but with nowhere near the mileage easily available from foreign brands, or even from its own brand in Europe. It's idea of “good fuel mileage” for North America is to build hybrid SUVs that will do better than the usual nine miles to the gallon, but still only in the low 20s per gallon, at best.
Oh, and a big reason that Americans, to this point, have not wanted small cars is decades of relentless car company advertising pushing the false belief that bigger cars are better, strong and safer than standard-sized models. The industry's general line of advertising has been on a par with 1940s and '50s cigarette ads for honesty.
As it happened, I was at the Auto Show at the peak hours on its first Saturday, a few days before LaNeve showed up. Attendance was much smaller than I'd seen at previous shows -– I'm something of a car buff, and go to auto shows whenever I'm in the neighborhood –- and it was obvious that other attendees were mostly ignoring the big vehicles while paying very close attention to vehicles such as the new version of Honda's small hybrid and the Fit and Ford Focus.
Those who are concerned about style and pizzazz were paying a lot of attention to the Mini Cooper, and one or two other sporty little things. Almost everybody I saw walked past the big SUVs without a glance, or if they did glance, tended to shake their heads in a “they don't get it” way.
The only, and I do mean only, large vehicle that caught any serious attention during the two hours I wandered the building was a General Motors concept car, which was interesting, although no one expects to see it on the road.
Folks, the people who run the American car companies really, seriously, do not get it.
So now what?
Damned if I know, but the conversation is important and should not be left to the politicians, union haters and the awesomely out of touch industry executives who brought their companies down. Tens of thousands of jobs and even, possibly, the direction of our economy are at stake.
There is space here for thoughtful suggestions that could be passed on to those in power.