Who killed the U.S. auto industry?

To hear the media tell it, arrogant corporate chiefs failed to foresee the demand for small, fuel-efficient cars and made gas-guzzling road-hog SUVs no one wanted, while the clever, far-sighted Japanese, Germans and Koreans prepared and built for the future.

I dissent. What killed Detroit was Washington, the government of the United States, politicians, journalists and muckrakers who have long harbored a deep animus against the manufacturing class that ran the smokestack industries that won World War II.

As far back as the 1950s, an intellectual elite that produces mostly methane had its knives out for the auto industry of which Ike’s treasury secretary, ex-GM chief Charles Wilson, had boasted, “What’s good for America is good for General Motors, and vice versa.”

“Engine Charlie” was relentlessly mocked, even in Al Capp’s L’il Abner cartoon strip, where a bloviating “General Bullmoose” had as his motto, “What’s good for Bullmoose is good for America!”

How did Big Government do in the U.S. auto industry?

Washington imposed a minimum wage higher than the average wage in war-devastated Germany and Japan. The Feds ordered that U.S. plants be made the healthiest and safest worksites in the world, creating OSHA to see to it. It enacted civil rights laws to ensure the labor force reflected our diversity. Environmental laws came next, to ensure U.S. factories became the most pollution-free on earth.

It then clamped fuel efficiency standards on the entire U.S. car fleet.

Next, Washington imposed a corporate tax rate of 35 percent, raking off another 15 percent of autoworkers’ wages in Social Security payroll taxes

State governments imposed income and sales taxes, and local governments property taxes to subsidize services and schools.

The United Auto Workers struck repeatedly to win the highest wages and most generous benefits on earth — vacations, holidays, work breaks, health care, pensions — for workers and their families, and retirees.

Now there is nothing wrong with making U.S. plants the cleanest and safest on earth or having U.S. autoworkers the highest-paid wage earners.

That is the dream, what we all wanted for America.

And under the 14th Amendment, GM, Ford and Chrysler had to obey the same U.S. laws and pay at the same tax rates. Outside the United States, however, there was and is no equality of standards or taxes.

Thus when America was thrust into the Global Economy, GM and Ford had to compete with cars made overseas in factories in postwar Japan and Germany, then Korea, where health and safety standards were much lower, wages were a fraction of those paid U.S. workers, and taxes were and are often forgiven on exports to the United States.

All three nations built “export-driven” economies.

The Beetle and early Japanese imports were made in factories where wages were far beneath U.S. wages and working conditions would have gotten U.S. auto executives sent to prison.

The competition was manifestly unfair, like forcing Secretariat to carry 100 pounds in his saddlebags in the Derby.

Japan, China and South Korea do not believe in free trade as we understand it. To us, they are our “trading partners.” To them, the relationship is not like that of Evans & Novak or Fred Astaire and Ginger Rogers. It is not even like the Redskins and Cowboys. For the Cowboys only want to defeat the Redskins. They do not want to put their franchise out of business and end the competition — as the Japanese did to our TV industry by dumping Sonys here until they killed it.

While we think the Global Economy is about what is best for the consumer, they think about what is best for the nation.

Like Alexander Hamilton, they understand that manufacturing is the key to national power. And they manipulate currencies, grant tax rebates to their exporters and thieve our technology to win. Last year, as trade expert Bill Hawkins writes, South Korea exported 700,000 cars to us, while importing 5,000 cars from us.

That’s Asia’s idea of free trade.

How has this Global Economy profited or prospered America?

In the 1950s, we made all our own toys, clothes, shoes, bikes, furniture, motorcycles, cars, cameras, telephones, TVs, etc. You name it. We made it.

Are we better off now that these things are made by foreigners? Are we better off now that we have ceased to be self-sufficient? Are we better off now that the real wages of our workers and median income of our families no longer grow as they once did? Are we better off now that manufacturing, for the first time in U.S. history, employs fewer workers than government?

We no longer build commercial ships. We have but one airplane company, and it outsources. China produces our computers. And if GM goes Chapter 11, America will soon be out of the auto business.

Our politicians and pundits may not understand what is going on. Historians will have no problem explaining the decline and fall of the Americans.

Prince Handley

Like there’s bonuses for all these executives, there should also be penalties. A CEO of a failed company isn’t worth millions of dollars a year PERIOD. The problem is all the guys sitting on the board hope that they’ll be the next CEO COO or whatever C so they approve millions without blinking their eye.

The press is doing a poor job reporting too.
The ethics at Toyota isn’t what you might expect.

Last year Toyota recalled more vehicles than they built; and they lost a class action suit regarding 8.6 million engines that had *failed* while the vehicles were under warranty in most cases.

Right now Toyota is in the middle of buying back 2001 Tundra’s due to the severe rust problem which renders the unit unfit for the road.

They’ve done a masterful job keeping all of the above quiet haven’t they?

Let’s combine the two give the economy a boost and save a few million jobs all at once!
Instead of shipping cases of cash off to car makers or sending us all another check;
Send out a voucher (for say $1,000) good for the purchase of a motor vehicle, according to the percentage of the vehicle that’s produced domestically. (Civic = 70%, Ford Explorer=80%, etc.)
Those not interested in a new car could sell (or give away) their vouchers (EBay would be loaded with them in no time flat); those who wish to buy a car could use as many as they obtain, up to the full MSRP of the vehicle.
This would bail out the car industry without giving them a dime directly. Furthermore, it would reduce the overall age of the nation’s cars, increasing overall fuel economy & decreasing pollution!
Strengthen the dollar
Since vehicles with a higher domestic content would be moving better, this would reduce our imports, strengthening our dollar which would in turn further reduce what we pay for anything imported …like gas.
Jobs
Instead of simply saving relatively few jobs, this would cause such a run that it would create some; and instead of merely propping up the big 3, it would put 1000’s of suppliers back to scheduling overtime.
Pays for itself!

Since money turns over 5 times, and the vouchers are only good for the domestic content of the vehicle, every dime would be spent in the United States creating taxable income.
What is the income tax on 65,000 anyway? (20K manufacturing cost = $13,500 W-2 income x 5 = $65,000)
I’m sure you’ll agree that this makes more sense than simply sending out checks; many of which will be used to buy new flat screen TV’s usually made in Malaysia or some such place.

-Doug Hageman
Marion, CT