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You need to read this……. November 20, 2008

Posted by wilsonniblett in Enthusiastic Commentary.
This came to me in an e-mail, but I feel that it is very important to share during interesting times.
The Chevy Enthusiast
Tuesday, November 18, 2008
Do Detroit 3 automakers deserve bailout?
Preemptive aid would avoid catastrophic destruction of jobs

Jason H. Vines
We may never know the financial burden of Hurricane Katrina on New Orleans and the rest of America. Some have pegged it at between $200 billion and $300 billion. Almost everyone now agrees that more and better “things” should have been done prior to the storm and certainly in the days and weeks after the disaster.

Another disaster is headed to our shores that will prove considerably more costly and affect far more communities than did Katrina. The question is: Do we do something preemptive or in reaction to the storm?

Unless Congress comes to the aid of the U.S. auto manufacturers, the waves from the failure of these large employers and the core of our manufacturing base will take a large and destructive path across America.

The U.S. automakers are on the verge of collapse. When our economy and other economies around the world recover — and they will, someday — there will still be millions of people who need new vehicles. Is it important that U.S. auto manufacturers are a part of that market? Yes for historical and future reasons.

General Motors and Ford, both 100-plus years old, helped establish what sets America apart as the greatest nation on earth — our strong middle class. Historian Daniel Boorstein called the car the “great equalizer” of the 20th century for Americans. It gave us mobility and an ability to further prosper.

When the world was threatened in World War II, it was the U.S. automakers that turned their factories into the Arsenal of Democracy. Without their support, it really is unthinkable to imagine us as freedom-loving people.

The demise of America’s car companies, today woefully short on cash, means the loss of millions of jobs directly — from the assembly plant worker to secretaries to dealership mechanics — and indirectly from waitresses at local restaurants, store owners and others. It’s not just a ripple effect, but a potential tsunami.

In 1994, when I worked for the then-American Automobile Manufacturers Association, it found that the companies accounted for one of every 13 jobs in this country. Recent studies state the number at one in 10. That is an enormous figure and a key reason why all other major industrial countries that have an auto industry cherish and support it. That also is the reason that emerging markets like China put a lot of stock into developing a vibrant auto industry.

If you want to see a region that has abandoned its manufacturing base and is left with a services-based economy, look no further than the United Kingdom. The situation there isn’t pretty.

Jobs don’t tell the whole story, though. Thousands of communities across our country depend heavily on the auto and supplier plants. The computer industry enjoys these car companies and their suppliers as some of their best customers, as do steel, glass, plastics and chemical companies. Community charities, school programs and sports programs will be hit hard when that local go-to car dealer can’t support the Little League or Girl Scouts or the breast cancer walkathon.

But they got themselves into this mess, you know. How so? They supported communities with jobs and taxes. They provided health care and pensions while their foreign counterparts (read: the “smarter car companies”) let their home governments pick up most of the tab for these benefits through higher taxes on all citizens.

They should have seen this coming, you say? Seen what? Gas jumping up to more than $4 a gallon? No, they didn’t see it, but neither did Toyota and Japan Inc. as they sold larger vehicles in the U.S. market and are too paying for this bad bet today.

They didn’t care about the environment. Really?

The most significant anti-pollution device in the history of the automobile industry is the catalytic converter. Which Japanese or German company invented it? It was General Motors. And if you want to talk about clean manufacturing, America’s car companies have facilities where the air and water that leave the factory is cleaner than when it first came in.

But the Detroit automakers don’t care about fuel economy. Really? In the segments in which they compete, General Motors and Ford products in particular rate at or near the top in every one of them.

Insurance giant AIG’s bailout has now grown to $150 billion, and Washington and New York didn’t bat an eye. Meanwhile, America’s car companies have to beg for a sum far south of those numbers.

And so, we see this storm getting closer by the day. The question is: Do we do something about it before it hits the shores and devastates communities across our land? Or do we say let ’em go broke and hope for the best?

Ask the people of New Orleans what they wish had been done before the storm struck.

Jason H. Vines is senior vice president of Compuware Corp. in Detroit and a former senior executive at Chrysler, DaimlerChrysler, Nissan and Ford Motor Co.



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