Bailing out the U.S. auto industry

Bailing out the U.S. auto industry

Now the government is getting ready to bail out General Motors and the rest of the American auto industry. William Katz contemplates the prospect:

Let’s see if I have this right. I, and millions of my fellow citizens, in addition to our other burdens, will now be asked to bail out the American automobile industry, which has fallen on hard times. No less a pair of automotive authorities than Nancy Hot Rod Pelosi and Harry “High Octane” Reid have said so.

Now wait. Did I miss something? I don’t see where Honda, Toyota or Nissan are begging for salvation. Mercedes seems to be in business. BMW is still moving cars. Even Rolls continues to transport the Saudi royals. This seems to involve the American companies only – GM, Ford, and what’s left of Chrysler.

Ah, the comedown. It’s been 55 years since the president of GM, Charles E. Wilson, famously said that what’s good for General Motors is good for the country. In fairness, he also added that what’s good for the country is good for General Motors, but it’s the first part that got the headlines. In the two or three decades following Wilson’s remark, America’s passion for its auto makers continued, rather blindly, with heavy celebrity involvement. . . .

So what happened?

Arrogance is what happened. Mediocrity is what happened. Junk is what happened.

In the 1970s a survey was taken of German and American auto executives. They were asked, “What do you do?” The Americans replied, “We sell cars.” The Germans answered, “We build cars.” It was a difference in corporate culture. The Japanese noticed. They decided to build cars, and they succeeded. Many Americans today, brought up on Pontiacs and Fords, won’t own an American car, unless it’s a car made in Ohio by a foreign company. What a stunning change.

This country was custom-made for the Japanese auto invasion of the late seventies and early eighties. For decades, even as we loved our Detroit-made autos, we knew that many of them weren’t very good. The Mustang might have stolen our hearts, but our wallets were bleeding. (One Olds that I had required two engine changes.)

A University of Chicago professor, who had a background in the labor movement, told me this: When an auto worker ordered a car, that car was tagged, at the start of the production line, “For one of the boys.” The workers made sure the car was made right. Wonderful story. But it makes you think about the thousands of other cars that were coming off that same line. You might have owned a few. . . .

Auto executives then, like many today, came from the finance side of their companies, not the auto side. Alfred P. Sloan, GM’s legendary chairman, once famously said that GM didn’t make cars, it made money. He turned GM into the largest and most profitable industrial company in the world.

But no longer. Now the companies of our dreams, the companies that made Dinah Shore sing and Groucho joke, the firms that turned out the bombers and tanks of World War II, are begging for help. After decades of failing to produce cars with the quality and features Americans want, they ask largesse from the public they often ignored. They will get that help – because there are millions of jobs involved, because Democrats will not let the United Auto Workers down, because the bankruptcy of our auto industry would be a national humiliation, and because…because in a way we still love them.

Notice what this suggests about VOCATION and what can go wrong.

"I remember Subway stamps, and how the Subway store nearest my apartment had a register ..."

DISCUSS: What Makes America Great?
"Natural science, as a minimalist epistemology orchestrated to give a predictable account of phenomena, was ..."

Weird Science & the New Social ..."
"I know the speculations that are concocted from various aspects of quantum theory. That is ..."

Weird Science & the New Social ..."
"Let's not forget the S&H Green Stamps that the supermarket gave you with every purchase. ..."

DISCUSS: What Makes America Great?

Browse Our Archives