Attach conditions to auto bailout
Rochester doesn’t exactly spring to mind when people talk about the struggling domestic automobile industry, and that’s perfectly understandable. We build computers here, not cars. We seek higher cancer-survival rates, not higher mpg.
For that reason, it might be especially tempting for us to say that Ford, Chrysler and General Motors deserve whatever fate awaits them in the global economic crisis. Top-level executives in Detroit have been slow to recognize the changing market — or have recognized it but stubbornly refused to respond to it. As a result, more than a few smart people are saying that the domestic automobile industry is a dinosaur that can’t be saved from extinction, which is why any bailout package for the Big Three faces a long and difficult fight in Congress.
But the plain truth is that no manufacturing sector of our economy touches as many American lives as the auto industry, and Rochester is no exception. We don’t assemble new cars here, but they are sold here, financed here and repaired here. The sales staff and service technicians who work in our local car dealerships pay taxes here and buy homes here. Their children attend our schools, and dealership owners are known for their philanthropic endeavors throughout the community.
Without some form of government intervention, bankruptcy appears likely for GM within a few months. That wouldn’t spell the end of the corporation, but it likely would be far more ruinous than, say, an airline’s bankruptcy. People still flew Northwest when it was in Chapter 11, but buying an airline ticket is a short-term expense, not a financial commitment that can last 10 years or more. We suspect that potential customers, concerned about long-term availability of parts and service, would be reluctant to buy a car built by a bankrupt manufacturer. That could result in massive layoffs at a time when our economy can’t afford to shed any more jobs.
That’s why this is one of those cases in which our desire to "punish" poor decision-making by a few people has to be put aside to protect tens of thousands of innocent people. As much as we’d like to let Detroit pay for its arrogance, we simply can’t afford to. Members of Congress know that, and some form of a bailout is going to happen.
But when it does, it needs to have a lot of strings attached. Some executives should be forced to clean out their offices, and some overly generous union contracts will need to be renegotiated. Some plants will close, at least temporarily, and increased fuel efficiency and innovation must, to borrow an old Ford slogan, become "Job One."
In other words, the only bailout we support is one that leads to an overhaul of the domestic automobile industry, not one that simply fills its empty gas tank and keeps it limping along for another six months.