Tomorrow Never Dies But The Auto Industry Might

So now that we’re no longer talking about the $700 Billion FAILout, the fate of America’s Big Three Automakers is today’s topic de vogue. Wesley Clark has opinions about how they’re “crucial” to the “military” and “arsenal of democracy.” Mitt Romney tells Detroit that they’ve purchased their tickets and says to let the crash. WSJ’s Kim Strassel mocks how the Congressional Leadership’s inability to accomplish anything is rooted in their inability to decide which supportive interest group to piss off. Rick Wagoner is asking for our support, yet is surprisingly less convincing than The Salvation Army. Although, she may have missed how the gays already took that bullet.  Reuters apparently has a blog on it. Called The Great Debate. Oh and Carly Fiorina thinks some of the government’s shiny new banks should make loans to Detroit, now that they’re, you know, liquid and all.

What should we do? Well apparently everyone has an opinion. They mostly boil down to

1. Save the Cheerleader Big Three, Save the World

2. Let Them Eat Cake Bankruptcy

3. Let’s Save Them From Bankruptcy While Making Them Eat Cake, (Hit Me Baby) One More Time. (If you think this is out of nowhere – listen to the lyrics again)

However, all of these are overwrought, emotional arguments leave much to be desired. First, what the hell is an American auto manufacturer anymore? The highest selling manufacturer in Russia is General Motors. All of the major foreign auto makers have plants, design bureaus, and massive investments in America. Chrysler is only semi-American and they all have extensive global operations overseas. I mean the age of America = Detroit and what’s good for Dearborn is good for Lexington, is long over.

Does anyone not truly believe that General Motors, still the largest and best selling automaker in America will simply exit the market and leave a crater the size of their economic footprint, if we don’t help them? No. First, even if they went belly up instead of simply reorganizing demand that would’ve gone to GM isn’t going to evaporate overnight. It’ll fuel increases in sales among surviving competitors. Second, slight retooling and distressing but painless cuts haven’t worked before, a full scale intervention is needed, not a slap on the wrist.

Next, people, ike General Clark, keep talking about how if the big three go under somehow America will no longer be able to defend itself. Or at least it’ll be harder. Bullshit. No seriously. This isn’t 1945. We still need ground vehicles in large numbers for current and future conflicts. However, looking at Detroit’s mentality and products over the last three decades can anyone say they feel like the Big Three have distinguished themselves at making efficient, effective, and safe vehicles? If so, two words: Ford Pinto. More to the point, General Clark, among others, point to the Humvee as a Detroit produced wonder. The problem with that assessment is that the Humvees that helped the Army in 1991 aren’t doing that same job today. As recently as 2005, the Army and Marine Corps were highly critical of the lack of standard safety features such as ABS and rollover protection that was commonly featured on consumer vehicles.

I don’t buy the argument that Detroit is crucial for national defence for a second, because, for years, Detroit has blithely paid lip service to working towards America’s future, its betterment, and the protection of our soldiers, while pursuing corporate profits in the short-term. We have no reason to expect that will change despite all of the public umbrage directed at them presently. If they go under, which is unlikely, smaller defence contractors, as well as the major ones will simply move in and replace them. The way the market should and does work. We’ll see innovation from boutique firms and an expansion of research and development among the major players, Raytheon, Northrop Grumman, Boeing, Lockeed Martin, et al.

I’m a traditionalist and lament the fall from prominence of American motoring but quite frankly, bankruptcy may be exactly what is needed. A leaner, meaner, Detroit that has to work for its success will be a sight to behold and I look forward to the rebirth of American automotive engineering.

~ by Kyle on November 20, 2008.