Paul Davis: Bailing out auto industry a dangerous road

Paul Davis
Columnist
Published: November 24, 2008

How did we come to this? The American automobile industry is dying. The Big Three – General Motors, Ford and Chrysler are just a crankshaft and an SUV away from going belly up. I can’t quite fathom any of this. My generation accepted the mantra that what’s good for General Motors is good for America.

So, if GM and Ford and Chrysler go down the drain, can America be far behind? We all woke up one day and found out the U.S. and, yes, the rest of the world, was going to hell in a hand basket.

Or was it just another diversion in the midst of the malaise and dearth of political leadership that lulled us all to sleep.

In America we have all grown up and been taught that bigger is better, that we can all have, or are entitled to three cars, a plasma TV, a bass boat, a pickup truck, great wages and big houses.

But with just one more blast of air in hopes of making the balloon grow larger, it might just burst. Our automakers have burst their balloons and now ask, no, demand, that taxpayers bail them out. Banks won’t pony up the money. Should American taxpayers?

In our capitalist society, you sink or swim based on your willingness to work hard and provide services or products that others want and can afford to purchase.

Truth is, the Big Three did give us what we wanted — Ford trucks that could pull the Empire State Building,

SUVs that could carry the whole first-grade class and gas-guzzling sports cars which could suck gas faster than a goat could nurse. We wanted those vehicles when gas was 75 cents a gallon, even when it was $1.75.

But when gas reached $4 a gallon and our fuel bill was bigger than our car payment, we instantly wanted that green car Al Gore had told us about. Japan had one, Detroit didn’t.

There’s another problem. Even if our automakers had a lean and green car it would cost much more than foreign brands and probably still could not overcome the sales slump. Thanks to the autoworkers’ unions, salaries and benefits provides the average Detroit worker an estimated $70 per hour. Their competitors are paid a respectable $40 per hour, if benefits are included.

Grab a sheet of paper and list all the working Joes you know who make $70 per hour. Reminds me of the man who called the plumber to his house. The plumber diagnosed the problem, fixed it in 15 minutes and presented his bill for $160. The homeowner was indignant. I’m a surgeon and I don’t make that kind of money.”

The plumber replied, “Tell me about it. I used to practice medicine.”

Should the government bail out a private business which makes a product it can’t sell? I have had many businesses in my lifetime. Most have done well, one failed, some have struggled. Should somebody bail me out if I can’t make my business work?

Is General Motors too big to fail? Our two senators in Washington say no. No bailout. I wonder. Can we stand a couple of million more folks in the unemployment line? How far does this “trickle down.”

How about our local car dealers, our rubber workers, our parts suppliers.

I think perhaps a loan, with rules and binding regulations might be in order. I’m not sure lawmakers know how to craft such a document. Perhaps we need to tell Detroit to scale back, cut costs, and make vehicles people can afford to buy and to drive. Tell union leaders that wages and benefits will have to be trimmed. Make less or make nothing.

Are our automakers too big to fail? Is America too big to fail? Was Rome too big to fail? The American dream has gone too far adrift when somehow we as a nation are determined to put every family in a three-bedroom home, even if they can’t afford the payments, when Detroit wants to sell us a car that costs too much and is too expensive to drive and is destructive to the planet.

Is it the culmination of America’s nightmare to expect taxpayers to bail out companies that provide goods and
services Americans don’t want and can’t afford?

Building a better mousetrap has worked well in the past.

Paul Davis writes a Sunday column for the Opelika-Auburn News. You may contact him at