Like everyone else, at least everyone I can think of, I’ve been following the deadly dance between the Big Three and Congress from the very beginning. For the record, I have maintained throughout that the problem here is not the price of oil, it has been the price of cars, and now the price of everything else. It has nothing to do with the cost of filling the tank and everything to do with the uncertainty of filling the belly. Notice how I’ve neatly sidestepped a solution or even a systemic diagnosis.
But let’s be clear, $70,000 for a Cadillac Escalade that’s really a Chevy Tahoe, that already costs as much as a house is kind of a non starter when the people who are supposed to buy these things have seen real inflation adjusted wages go down over the past eight years and now their house-piggy banks have gone bust.
For a better analysis than mine, have a look at the excellent piece at Big Money . . .
Who’s really at fault, however, doesn’t matter all that much, because for both laissez-faire Republicans and liberal Democrats, the financial crisis presents a rare opportunity to rebuild the most iconic exemplars of American industry in the way they hoped for all along. For the free marketeers of the right, it’s a chance to extol the benefits of the strong medicine of bankruptcy. For the newly empowered liberals of the Democratic Party, it’s a chance to put environmental consciousness in the center of industrial policy.
After many years of not having to think about the “battleground states” except in the course of the presidential election, Congress now, thanks to the financial crisis, actually has to think seriously about what to do with Detroit. After years of watching the old industrial core stagnate and unemployment creep up (it’s at almost 9 percent in Michigan already), there is a sudden urgency in finding a solution to a problem decades in the making. And the message that Detroit is getting comes down to, “Well, now you’ll do it our way.”
So what is the solution? My colleague, Peter Flatow makes a couple of excellent points . . .
Listening and reading all of the rhetoric about accountability and the need to reinvent the automobile industry only talks to after-the-fact metrics and totally ignores any consideration to what needs to be done. Developing a reinvention plan requires the combination of analytical rigor with creative thinking. Why is it that Congress appears to be so dissatisfied with the “plans” that the automobile manufacturers have offered up? The answer is actually very simple; Congress got exactly what they asked for because they didn’t know what to ask for. Had they asked, what would the ideal American based automobile industry look like in 2018 and what would we have to do to get there, they would have gotten a very different plan.
From my limited exposure to the automobile industry which consists of working for two GM brands some time ago, one being Saturn the other Saab, I would suggest with confidence that more than enough information exists that would allow for the analytical rigor and creative thinking necessary to answer that question. If I were President-elect Obama, my request would be for an innovation team to determine what does the ideal industry look like. This team would consist of industry experts inside and outside the automobile industry as well as some people who have the proven skills to contribute to finding a solution. There are many companies that do this every day. The processes and skill sets required are proven. From experience I would guarantee a solution to the “problem” and it could be achieved in no more than 30 days.
Tags: BigMoney, Detroit, Big Three, GM, Chrylser, Ford, Bailout, Peter Flatow
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