Pull the Plug on US Automakers
PRESIDENT Obama, this is your moment. This is your time to beat Buicks into bullet trains, Suburbans into subways, and Hummers into hybrid buses. To borrow from your speeches, there is a moment in the life of every generation, if you are to make your mark on history, when you must tell an iconic industry that its incompetence is inoperable.
It is time, Mr. President, to take General Motors and Chrysler off taxpayer life support.
Politically, this is even more difficult than ending the Iraq war. In your very first press conference as president-elect, with Michigan Governor Jennifer Granholm standing behind you with your transition economic team, you declared, "The auto industry is the backbone of American manufacturing . . . a critical part of our attempt to reduce our dependence on foreign oil."
That was nice to give them the benefit of the doubt, Mr. President, but all GM and Chrysler have done since then is connive for more time on the federal respirator, despite the flat line on the boardroom monitor. They have been on notice for months to come up with a revolutionary restructuring plan in exchange for the $17.4 billion in bailout aid it has already received. This week, GM said it may need another $16.6 billion from the United States and another $6 billion from the governments of Canada, Germany, Britain, Sweden, and Thailand. Chrysler says it needs another $5 billion from you and me. For that, it came up with a projected loss of another 50,000 jobs, with plans so vague that the Wall Street Journal wrote that it contained "only a relatively few major new restructuring steps."
That is not even the final straw for pulling the plug. Within the restructuring plan submitted this week to the Treasury Department, GM wants an additional $8.4 billion from the Department of Energy to produce "alternative fuel and advanced propulsion" vehicles, with yet another request coming by March 31. This is a stunningly unjustifiable level of welfare for a company that arrogantly peered out of its SUVs and pickups, sneering down on the smaller Japanese cars.
Behind any greenspeak is grease. The auto industry opposes California's tough proposed greenhouse gas emission standards. The Bush administration blocked them, but Obama is reconsidering them. In its restructuring statement, GM said "compliance with other regulatory schemes, including the California CO2 program, will be addressed as any such programs are finalized." Translation: GM will scheme to soften or evade the standards. Deep in its restructuring report, Chrysler still whines about oncoming environmental standards. It said it will "try its best to comply," but warns that "as a last resort it may be necessary to restrict sales of certain vehicle models." Translation: Chrysler is so far behind in developing efficient cars, it may have to hold back its muscle cars and behemoths to meet California fleet-average fuel economy rules.
Mr. President, just yesterday you warned the nation's mayors that they must spend their share of the $787 billion stimulus "without waste, without inefficiency, without fraud." You told them, "I will not compromise or tolerate any shortcut." The US auto industry, holding us hostage by claiming it employs one out of every 10 workers, has lobbied for every shortcut to inefficiency known to Capitol Hill. The Detroit Free Press is saying the bailouts of automakers and suppliers may total nearly $100 billion - with no plan.
It is time to stop compromising with the comatose. There is no question the short-term pain that pulling the plug will cause. I write this knowing how large the auto industry loomed for my family and relatives in Wisconsin and Michigan. But it is bleeding to death anyway, as outdated for America's industrial future as a typewriter is to a computer hooked to the Internet.
In the race for fuel efficiency, Japan has already put a figurative man on the moon. While we sneered out of our SUVs, Europe and Japan began moving people between cities on 200-mile-per-hour trains. Mr. President, you have said it is time to put away childish things. That includes the gas guzzlers of the US auto industry. It is time to beat Pontiacs into the plowshares of public transportation.
© 2009 Boston Globe