Our occasional contributor Bill Katz holds down the fort at Urgent Agenda. Today he writes about the tin cup held out to taxpayers held out by the American automobile industry:
Let’s see if I have this right. I, and millions of my fellow citizens, in addition to our other burdens, will now be asked to bail out the American automobile industry, which has fallen on hard times. No less a pair of automotive authorities than Nancy Hot Rod Pelosi and Harry “High Octane” Reid have said so.
Now wait. Did I miss something? I don’t see where Honda, Toyota or Nissan are begging for salvation. Mercedes seems to be in business. BMW is still moving cars. Even Rolls continues to transport the Saudi royals. This seems to involve the American companies only – GM, Ford, and what’s left of Chrysler.
Ah, the comedown. It’s been 55 years since the president of GM, Charles E. Wilson, famously said that what’s good for General Motors is good for the country. In fairness, he also added that what’s good for the country is good for General Motors, but it’s the first part that got the headlines. In the two or three decades following Wilson’s remark, America’s passion for its auto makers continued, rather blindly, with heavy celebrity involvement.
Cars were in fact the first “Hollywood” industry, with individual brands identified with famous stars. We saw the USA in our Chevrolet because Dinah Shore told us to. We heard Ed Sullivan announce, “On our Lincoln-Mercury stage tonight…” Mr. Television, Milton Berle, was star of the Buick-Berle Show. And Groucho Marx advised viewers of “You Bet Your Life” to visit their DeSoto-Plymouth dealer. (“Tell ’em Groucho sent you.”)
If you wanted to see the new Oldsmobiles, they were unveiled each year on the flagship CBS evening news program with Douglas Edwards. The unveiling was presented as a news event. To many Americans, it was.
American auto makers were America. They gave their cars names that reflected our strength, confidence and macho style. The Ford Mustang. The Dodge Charger. The Thunderbird. And, for those into Marxist rhetoric, the Chrysler Imperial.
As early as the early thirties, Herbert Hoover was promising “a chicken in every pot, and two cars in every garage.” Later that decade the Moscow commissars screened “The Grapes of Wrath” in movie theaters to prove how bad the Depression was in America, and to show the failure of capitalism. It backfired, to cite an auto phrase. In the movie, the poor Okies are shown migrating to California…in automobiles. Few in the USSR had cars. The Russian audiences thought the Okies had it okay.
The image of the automobile defined quality. If a product was good it was called “the Cadillac of…” If it was rotten it was called “the Edsel of…”
So what happened?
Arrogance is what happened. Mediocrity is what happened. Junk is what happened.
In the 1970s a survey was taken of German and American auto executives. They were asked, “What do you do?” The Americans replied, “We sell cars.” The Germans answered, “We build cars.” It was a difference in corporate culture. The Japanese noticed. They decided to build cars, and they succeeded. Many Americans today, brought up on Pontiacs and Fords, won’t own an American car, unless it’s a car made in Ohio by a foreign company. What a stunning change.
This country was custom-made for the Japanese auto invasion of the late seventies and early eighties. For decades, even as we loved our Detroit-made autos, we knew that many of them weren’t very good. The Mustang might have stolen our hearts, but our wallets were bleeding. (One Olds that I had required two engine changes.)
A University of Chicago professor, who had a background in the labor movement, told me this: When an auto worker ordered a car, that car was tagged, at the start of the production line, “For one of the boys.” The workers made sure the car was made right. Wonderful story. But it makes you think about the thousands of other cars that were coming off that same line. You might have owned a few.
When consumers bought a car, in the fifties, sixties, or even seventies, they were told to make a list of defects and bring the car back after a thousand miles for repairs. Certainly gave us confidence in Detroit quality.
And when Lee Iacocca took over Chrysler in the 1980s, to try to save the company, he did commercials with his friend, Frank Sinatra. Sinatra would ask, “What does Chrysler have in the showrooms right now?” Iacocca would respond, “We have the K-cars.” Gee, I recall thinking at the time, just what I always dreamed about as a teenager – having something called a K-car. Real creative planning.
Safety? Don’t mention it. It was Iacocca himself who said, “Safety doesn’t sell.” In the early sixties, if you wanted a seat belt you went to a Chevron dealer who installed one for five bucks. The American auto makers weren’t interested until they were forced to be interested.
Auto executives then, like many today, came from the finance side of their companies, not the auto side. Alfred P. Sloan, GM’s legendary chairman, once famously said that GM didn’t make cars, it made money. He turned GM into the largest and most profitable industrial company in the world.
But no longer. Now the companies of our dreams, the companies that made Dinah Shore sing and Groucho joke, the firms that turned out the bombers and tanks of World War II, are begging for help. After decades of failing to produce cars with the quality and features Americans want, they ask largesse from the public they often ignored. They will get that help – because there are millions of jobs involved, because Democrats will not let the United Auto Workers down, because the bankruptcy of our auto industry would be a national humiliation, and because…because in a way we still love them.
But the help should be given coldly, reluctantly. I think back to that tag put on a car ordered by an auto worker: “For one of the boys.” Maybe if Detroit had treated all of us like “one of the boys” this never would have happened. Now, if we fork over the funds, we should demand the needed changes. We the people are in the driver’s seat now.
For contrasting points of view on the wisdom of taxpayer support for the auto industry, see Professor Bainbidge’s “No bailout…” and Varifrank’s “So why can’t GM be allowed to go into bankruptcy?” (Via Instapundit.)
JOHN adds: What happened? Unions happened. Cars are manufactured profitably in the U.S., but at non-union plants in places like Tennessee. Unless the American automakers can get out from under their union contracts and unsustainable commitments to retired union workers, they are doomed.
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