Americans make autos, not Big Three

Robert Reich

TEXT OF COMMENTARY

Steve Chiotakis: We've heard over and over again that it's important for this country
to have a strong auto industry. But commentator Robert Reich has thoughts about what constitutes the term "American auto industry."


Robert Reich: It's said that America can't afford to lose "its" auto industry.
But the Big Three are shrinking so fast -- cutting payrolls and shutting factories -- that we're already losing much of GM, Ford, and Chrysler. Last year, GM said it may have to cut its U.S. workforce by a whopping 30,000, and its plan to qualify for additional bailout money foresees a company that's a miniature of its former self.

But why should we assume that the Big Three constitute the American auto industry, anyway? Foreign-owned automakers, producing cars here in the United States, now employ -- directly or indirectly -- hundreds of thousands of Americans. And at the rate the Big Three are shrinking, even if they bailed out, foreign automakers may soon employ more Americans than the Big Three.

Meanwhile, the Big Three have gone global. A Pontiac G8 shipped by GM from Australia contains far less American labor than a BMW X5 assembled in the United States. General Motors' European subsidiaries include Opel and Saab. Ford also has operations around the world. It even owns Volvo.

I'm not arguing against an auto bailout. But its purpose ought to be to help American auto workers keep their jobs, regardless of whether they work for GM or Toyota or anyone else. Or if they lose their jobs, help them get new ones that pay almost as well.

Yet we seem to be on the road to doing exactly the opposite: paying the Big Three billions of taxpayer dollars to keep them afloat, while they cut tens of thousands of American jobs and slash wages. We're transferring money from taxpayers to Big Three shareholders for no apparent reason other than the Big Three are headquartered in America.

Let's get real. The Big Three have blown it for years -- designing cars that an increasing number of Americans don't want to buy. This fierce downturn is pushing them toward reorganization under bankruptcy. There's no reason for taxpayers to foot any of this bill, unless the Big Three agree to keep their workers employed while they try to turn themselves around.

The American auto industry is not the Big Three. It's Americans who make automobiles.

Chiotakis: Former Labor Secretary Robert Reich teaches public policy at the University of California, Berkeley.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...