This past Wednesday, a friend asked me whether I would vote for the auto “bailout” if I were a senator. As I considered Dave’s question, all of the swirling issues ran through my mind:
- The auto industry brought their decline on themselves through bad decisions, a failure to embrace alternative-fuel vehicles more aggressively, and the burdensome demands of the UAW
- The Japanese manufacturers, operating in the US, are not suffering quite the same fate as the Big 3
- Bankruptcy is not the death knell some think it to be
At the same time, I pointed out to him that a failure here is a global issue, not simply because of raw materials and parts imported from around the world, but due in part to the number of manufacturing plants these companies operate abroad. For instance, Ford has a major facility just west of London where right-hand drive vehicles are assembled. Similarly, GM operates plants throughout Europe. A failure of Ford or GM can create:
- US layoffs
- Foreign layoffs
- Negative impact in raw material markets
- Decline in imports/exports to/from other markets (For instance, Canada is the #1 importer of American-built autos)
- Decline of dependent communities (Much like the declines of Detroit and Ann Arbor already, and similar to the decline of steel towns in the late 20th century)
- Collapses in local communities as a result of dwindling sales tax revenue, income tax, and property tax
- Foreclosures on homes of workers in the manufacturing sector
- Closures of auto dealerships with those employees adding to unemployment roles and possibly losing homes
- Collapse of dealer warranty services
- and the list could go on and on!!!
And as Dave and I spoke some more about it, I announced that as a senator, I would vote “no” on this measure. You see, bankruptcy can mean all of that and more, but doesn’t have to mean that at all. Chrysler’s revival at the hands of Lee Iaccoca is a prime example.
Besides, stop and consider the implications of the Congress taking steps to avoid the catastrophes I laid out above—and the hypocrisy of their actions when Congress actually causes such problems with the closures and draw downs of military bases here and abroad. Entire communities have dried up as the result of base closings.
If Congress will not save a community of service men and women, retirees, and military civilians from the ax, why save the auto industry?
Aside from that, perhaps the Senate simply did not like the smug arrogance of the UAW and its representatives—those who insist on a whole loaf of bread at the risk of no bread at all!!!