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May 23, 2013
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 Downward AutomobilityPosted on Feb 18, 2009It was a terrible omen: At the end of November, just as the American car industry was hitting a wall, my dear Saturn was totaled, around midnight, in front of my house. Fortunately, no one was hurt. But it was the end of my 15-year relationship with “a different kind of company, a different kind of car.” Like many Saturn loyalists, I was attracted to an excellent car made by members of the United Auto Workers under rules giving employees more responsibility. The approach was supposed to mark a new departure in the way General Motors made cars. And now, it has come to this: Saturn dealers, who expect to be cut loose by GM as it folds the brand, are talking about selling cars produced by Indian or Chinese manufacturers as “Saturns”—not what we original devotees had in mind. This story captures the dilemma confronting the Obama administration as it struggles to work out a plan to salvage the unionized car companies, most of them based in Detroit. No matter what the administration does, the days of an American car industry that could support highly paid assembly-line jobs with exceptional benefits are over. As someone who has seen the givebacks that the UAW is offering the car companies put it: “It’s not progress, it’s heartbreak.” The dream that blue-collar work could provide a better-than-decent living is dying. Advertisement On the upside, the industry is on the verge of breakthroughs in producing cleaner, more fuel-efficient cars. It is not in the country’s interest to let its core companies go under before that new competition begins in earnest. And the trouble facing our once Big Three—and it should be said that Ford, for now, is in better shape than GM or Chrysler—is not simply the result of their own well-documented mistakes but also of a sudden one-two punch. The American industry was leaning too heavily on gas guzzlers when high oil prices hit last summer, and then came the credit squeeze. This has been especially damaging to car sales because they rely so much on consumer loans. A rare constellation of events should not be permitted to knock out such a large part of the country’s Midwestern industrial base. But how much taxpayer money should be put at risk, and how much of the old industry can be saved? The administration is searching for a midpoint between indefinite subsidies and bankruptcy, and Barack Obama has taken control of the issue, having rejected the zany idea that our government needed a car czar. As one administration official put it, “The notion that President Obama was going to outsource decisions involving tens of billions of dollars of taxpayer money never made sense.” (And, please, let’s kill that word czar.) Here’s the problem: While indefinite subsidies or sending the companies into bankruptcy are both terribly flawed ideas, they are at least straightforward choices. Everything else is complicated. The unions have made enormous concessions, and the dealers are likely to do the same. But how hard a bargain will the banks and the bondholders drive? Will banks now being subsidized by the federal government make life difficult for the car companies being subsidized by the very same government? Do the taxpayers get nailed at both ends? Free-market advocates would argue that such agonizing complexities inevitably arise once the government gets deeply enmeshed in the workings of the market. True, but I’d still rather accept the messiness involved in giving Detroit one more chance than risk the human and financial costs of letting the domestic auto industry implode. Sometimes, the market’s “creative destruction” is more destructive than creative. As for me, I’ve put my own money where my columnist’s mouth is. With my Saturn interred, I am now the proud owner of a 2009 Chevy Malibu LTZ. It is one of GM’s comeback cars, and the reviewers say it is thoroughly competitive with the Honda Accord and the Toyota Camry. I’ll never feel quite the same way about the Malibu as I did about my Saturn, even though the LTZ is a much nicer car. But as long as GM stays unionized, I’ll drive with a clear conscience. E.J. Dionne’s e-mail address is postchat(at)aol.com. © 2009, Washington Post Writers Group  TAGS:
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By beeline, July 20, 2009 at 8:45 am Link to this comment
There is a shortage of cars in the rental rector, especially in holiday destinations as car hire companies aren’t keeping up their stock levels. There hasn’t been much coverage on the van hire situation for businesses.
Report thisBy photoshock, February 23, 2009 at 5:40 am Link to this comment
If the American car industry is in such sad shape, then why buy American cars? The products they come out with other than a few, meant for an exclusive market are worth nothing more than the powder to blow them up with.
Report thisThe American car as we know it and the industry that supported many households throughout the 20th century, is a thing of the past. Toyota has made a longer lasting and better car for the last 40 years. Nissan, formerly known in America as Datsun, the same.
Why are we giving hard earned money to something that is not what we expect and is not worth it to begin with? Our only hope in America is to totally revamp our automobile industry to jump light years ahead of the competition and surprise the hell out of
the world’s automakers.
By wadosy, February 22, 2009 at 4:25 pm Link to this comment
why was ditech hammering us 24/7 for years, trying to get us to borrow 125% of the value of the house we were using as collateral?
the crook that founded ditech in 1995 sold out to GMAC in 1999, which gave GMAC time enough to put together an ad campaign that convinced everyone that had a shred of equity in their shack that they should cash that equity in so they could charge more on their credit cards… the “convincing” to be accomplished by dint of non-stop 24/7 advertising on every commercial television outlet in america.
it also comes as no surprise to learn that goldman sachs, known for their creative use of derivatives, is in this caper up to their eyeballs, including manipulating the price of gasoline to help re-elect its front man, our noble and heroic ex-president, crusader bunnypants.
...and it comes as no surprise that goldman sachs becomes a partner with GM in the ditech operation in august of 2005.
...and as that fat little **** in the television commercials kept losing more and more refi jobs to ditech, greenspan was relentlessly lowering interest rates, which of course made the whole scam possible.
so even wikipedia has to acknowledge the timeline.
now about all that’s left to do is arrange a fed bailout of GM and goldman sachs, whose creative packages of homeowner debt were peddled to anyone addled enough to buy them.
and as the housing prices sink farther (as per another greenspan prediction) we can expect goldman sachs and cohorts to take advantage of the low prices, and wind up owning whatever’s left of america.
...this as demand for oil falls to the point that peak oil wont become a factor for years, possibly decades, which brings us to the whole purpose of the caper: crash the economy to disguise the fact that peak oil was the motive we did a “new pearl harbor” on ourselves on 9/11…
...as per PNAC’s wishes…
and now we’re the “benevolent global hegemon” whose benevolence has already killed a million people, and the Project for the New American Century is just getting started.
Report thisanyhow, GM quit building cars decades ago, when hucksters became more important to GM than engineers.
By wadosy, February 22, 2009 at 3:15 pm Link to this comment
looks mostly like GM is just another member of the merry band of looters that saw peak oil coming…
...GM was probably hoping, at first, that the PNAC project would rescue them… you know, by grabbing enough oil to prolong the agony for a few more years.
no such luck.
...but thank goodness GM made all those bad loans, just in case, starting about the same time the PNAC project was getting cranked up, in case the project failed and there’d be a need to disguise the fact that global oil production had peaked… duck soup, GI, just crash the global economy, destroy demand for oil, and peak oil goes away…
such a deal.
so, we’re in the middle of plan B, which seems to be panning out okay.
good enough.
now all we got to sweat out is those crazies in israel, who somehow fail to see the humor in either peak oil or global warming.
Report thisBy Inherit The Wind, February 20, 2009 at 5:21 am Link to this comment
In today’s NY Times, there’s an article on the collapse of Pontiac and how GM killed it. Pontiac’s not QUITE going the way of Oldsmobile yet (which GM sank a few years ago) but is going to be a “specialty” car (whatever that means).
Was a time when Pontiac built iconic cars that created a lasting image. Usually, it’s the first year, but in the case of the GTO, it was the 4th year, 1967, that produced what, to my mind, was Detroit’s most beautiful car—and is the truly iconic year (though all the early years from 64 to the early 70’s are amazing.) The 68 was totally different and iconic as well. Then there was the TransAm—Burt Reynolds’ car in “Smokey and the Bandit”....cars teens dreamed of owning.
So what did Pontiac to? Gave us the Aztek—ugliest car in decades. Created a generic any-car that you couldn’t tell from any other car, with a slightly oversize engine, built it in Australia, and with much fanfare, introduced this POS in 2004 as the “new” GTO. Right. Sure. They dropped it after 2006. Naturally. Want to re-introduce an icon? Do what Nissan did with the 350ZX—a car you can’t not look at.
I think GM is doomed. I’m not happy about it. It will take down GM, the auto-parts sub-companies, the shippers, the distributors, the dealers, and like a poison, all the supermarkets and builders and everything else that feeds off the fountainhead of a fundamental industry.
That further recession pressure will hurt Ford, too, as those same people who were in ancillary companies won’t be able to buy Fords either.
Gotta throw the majority of the bums who sank GM out. Replace them with people who know how to design, build and sell cars.
And make damn sure the UAW has warrants for everything they give up now to come back to them when GM is profitable again. For every dollar the UAW gives up,it needs an AMORTIZED debt to be repaid. After all, the UAW will be LENDING GM billions—and they should get it back, with interest.
Report thisBy jackpine savage, February 19, 2009 at 7:02 pm Link to this comment
Ok, look, all the military vehicles are built by dedicated companies and this is not the 1930’s. Those factories can’t be turned around to build tanks very easily. (GM does do defense contracting work through Hughes.)
Let’s be realistic about some things. The Japanese and Korean governments did the right thing and supported their industry. Once upon a time Toyoda made looms, and there was a great debate in Japan about protecting the Japanese market for Toyota (when they started making cars) when it would have been cheaper to buy imports.
Investment was plowed into nascent auto industries in both Japan and Korea; moreover, native companies in both countries were protected from competition until they were strong enough to fend for themselves. There’s absolutely nothing wrong with what was done…it worked very well.
But to blah blah blah about the free market benefits of so many choices; expect native industry to compete in a free market way; complain when they fail; and then use non-free market examples of how to do it right as an argument is either uniformed or stupid.
And the American made Japanese cars are just off shored labor. A Japanese Toyota worker makes an equivalent sum to a UAW worker; that’s the real reason they move factories here…the same reason our companies move factories to Mexico.
Finally, if you think that either the Japanese or Korean governments would let their automakers fail (especially the biggies) you’re out of your frickin’ mind.
E.J. you should have bought a Ford…at least reward the company that’s doing it the right way (no bailout funds to date, a thriving international brand, and well into a restructuring of US operations before any of this began)
Report thisBy pjkobulnicky, February 19, 2009 at 2:40 pm Link to this comment
(Unregistered commenter)
The auto industry cannot survive in its present form no matter what we do so the question is not one of keeping it alive but of the concept of the next state and the transition to that next state. Spending now to keep it alive is just wasting strategic financial resources.
Report thisBy Anarcissie, February 19, 2009 at 1:37 pm Link to this comment
It’s interesting how totally addicted you all are to the private automobile both for your personal lives and as public policy. There is a stage of addiction, a late stage, where any alternative to the hook becomes not only uninteresting but utterly unthinkable. You are there.
dihey is right, of course: the Federal government needs the auto industry to produce its tools of war, imperialism, and global domination. The last thing to go as the vulture drops from its perch will be the claws.
Report thisBy Ivan Hentschel, February 19, 2009 at 12:04 pm Link to this comment
(Unregistered commenter)
EJ, I think your vision and reasoning have been clouded by your heartstrings. You should try and put your emotions and your nostalgia away and look at the facts. You sound like my father,lamenting the passing of his Hudson.
Any early Saturn was GM’s attempt to build a Toyota, after their experience at NUMMI. They failed to take the market by storm, stopped doing family picnics, and, despite the fact that the car was made in TN, it still became another piece of Detroit crap. The new Chevy has gotten all the good press GM can buy (now with your tax dollars), and we will have no idea how good it really is only after you have one with 80-100,000 miles on it. By then you will know if the door handles fall off or the paint is peeling: these are both hallmarks of GM products. And Chrysler is already dead. Or haven’t you noticed?
The Big Three are not on the verge of ANYTHING. They are 20 years BEHIND everybody, still grinding out vehicles with inefficient gasloine engines and hybrids that only mock a Prius. I can’t wait to buy a $40,000.00 Volt with a battery system that has no track record. Get real!
The US auto industry is old, antiquated, full of old thinking and trying desperately to hang on to the way thigs were. Sorry, but the way things were are long gone.
How many more “chances” do you want to give the comatose patient on a life support system?
Report thisBy Grousefeather, February 19, 2009 at 10:24 am Link to this comment
(Unregistered commenter)
Sure, we need a healthy domestic auto industry, but why do we need the current crop of losers to represent that? Seems to me that we should use the bail-out government money to start new companies instead of propping-up the so called big three. The big three losers need to go the way of all losers.
Report thisBy dihey, February 19, 2009 at 9:03 am Link to this comment
Nobody, absolutely nobody including hot air blower Dionne tells us that the Federal Government will not allow all of US car making to disappear. Who would then build the tanks and other vehicles for our armed forces? Toyota, Honda, Hyundai, Volkswagen, BMW, Saab, Volvo? Do you have a good laugh? I sure hope you do!
I am really getting tired of the endless drivel written about the US auto makers that does not tell us about the military contracts for these companies. How much are they paid? How much profit do they make? Tell us Mr. Dionne if you dare! Tell us Mr. Obama, can you really continue your unholy war in Afghanistan/Pakistan for numerous years to come without a US industry that makes some of the hardware for your misbegotten adventure?
Report thisBy hippy pam, February 19, 2009 at 7:39 am Link to this comment
“THEY” just want to renege on the promises they made to us.
Report thisI thought a CONTRACT was unbreakable…Guess Not!!!
The plant where I worked is a TOXIC WASTE PILE-The land can only be used as a storage lot for obsolete factory equipment since there is such a high PCB ground content… and the work force has the highest incidence of cancer related deaths and illness of ANY/ALL G.M. facilities…[I heard that most retirees only lived an average of 7 years after retirement from that plant]
By Purple Girl, February 19, 2009 at 7:06 am Link to this comment
The Big 3 have been colaborating to Kill ‘Detroit’ for 3 decades.Why would WY get more stim money than MI? Used to be that we could blame it on being a Blue state.but the sad truth is that Repugs and their Blue Lap dogs have been working hand and hand with the Big 3 Upper (Br)Ass to kill the unions. Hindsight being 20/20, they were committing suicide. In the ‘80s some innovations came forward to move cars towards electric- they were shelved. The line worker never cared what engined the auto coming down the line- but the Big 3 with their Oil buddies did. do you think it was a mistake that fuel efficient cars lasted a heart beat before SUV’s came out?
Report thisThe Big 3 Are NOT ‘Detriot’, the UAW is Detriot. the Big 3 left Us like used up dead whore on Woodward long ago. New layoffs & plant closings- No doubt MI will be first again on the chopping block- waht few factories we have left.
I live outside Flint, an unemployement rate at 12% BEFORE the econmic meltdown. MI’er don’t love the Big 3, We love the UAW. They are not only our family, friends and neighbors, their our customers.They buy our products and our local services. Want to see a Ghost Town, come to Flint.
So we don’t support the Big 3, we support our citizens and the economy they have built and maintained for generations. OUR Grandparents Built those companies, made them so desireable they were afford the opportunity to build factories overseas. had they known it would be at the expense of their descendents, I doubt they would have been so committed.
Lockeheeds CEO made one of the most telltale statements to congress “We can hire 9 Mexicans for the price of 1 american”- What a Patriot! But more indictive (and obviously Unintentional) is the Fact it takes 9 Mexicans to do the Job of 1 American.
The Unions, esp the UAW not only built those companies, they built the middle class- affording Every Worker the opportunity to expect fair wages,40 hr work weeks, health and retirment bennies and a safe Work environment. Thank Unions for OSHA. They built the Floor on which all American Workers Stand. I think we not only owe it to our ancestors to honor the floor they built, but to maintain that floor for our children!If any Entity Embodies “We the People”, it’s Our Unions!
By Inherit The Wind, February 19, 2009 at 5:25 am Link to this comment
Their new, efficient cars are too little, too late. Detroit has been ignoring the warnings since the summer 1973, when the FIRST gas shortages began.
(Yeah, I know people say it started later, but in the summer of 1973, I was working for a locally-owned Shell station. The owner couldn’t get enough gas to sell and begged his loyal customer base to accept a maximum of $3 worth of gas at a time—when regular was $0.42/ gallon, so that was just over 7 gallons.)
In the years after Detroit’s “economy” offerings were crap—the Pinto, the Chevette, the K-cars and X-Cars…the Citation and its Pontiac equivalent. OTOH they sold “boats”—big cars with deep, but uncomfortable seats that wallowed at each bump. And trucks, lots and lots of pickup trucks.
Then there was Consumer Reports, year after year rating GM, Ford, Chrysler and AMC as the least reliable cars, the ones that would always be in the shop, and worse, with more safety recalls than anybody else. I don’t blame CU—they reported the truth.
Very few cars could REALLY compete with Toyota, Nissan and Honda. Only the Ford Taurus and Explorer could match the Camry, Maxima, and 4Runner.
But Detroit held on to the luxury market with the Lincoln and Cadillac. Until Honda introduced the Japanese luxury car with Acura, followed by Toyota’s Lexus and Nissan’s Infinity. Luxury, reliability, competitive price and, OH! ERGONOMICS!!!!!
Again and again Detroit missed the mark. So,what did they do? They pushed pickups and BIG 4x4s. They cut deals with the Hertz, Avis, and the other rentals for fleet discounts. They sold cars to the US military, and Lincoln Towncars are the backbone of the car service industry.
All this to hide the fact that the Japanese, the Europeans, and the Koreans were ALL cutting into their bread&butter;—the American car buyer.
Now they and we have to pay the piper. Sure, I think we should bail them out. But the guys who made the decision to push navigators and fight CAFE standards, clean-technology etc, should all be out on their butts. Not one red cent should go to them as long as they are paying executive bonuses OR hiring lobbyists. ALL of that, as well as charitable contributions needs to be shut down.
And if I ran the UAW, I’d INSIST on that before the Union gave an inch on wage and benefit cuts.
Report thisBy Shift, February 19, 2009 at 4:16 am Link to this comment
Chrisler, the Republican automobile.
http://baselinescenario.com/2009/02/18/cerberus-chrysler-bailout/#more-2608
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