Auto Destruct by Jonathan Cohn - A Noble Failure (Good article on the auto industry)

[fujiyama]

http://www.tnr.com/politics/story.html?id=cecbd59f-ab0c-4bd6-9f78-bf9f99cd5c80
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It's been more than a month since the auto industry came to Washington, begging for a rescue. And, since that time, it's become clear just how dry Detroit's reservoir of goodwill has run. For conservative opponents of bailout legislation, like Alabama Senator Richard Shelby, the U.S. auto industry is an object of scorn--"dinosaurs," he has called them. For the liberals who support a rescue, like Connecticut Senator Christopher Dodd, Detroit remains an embarrassment. "I wish that these companies had not gotten themselves into this situation," Dodd said recently, noting that they need to undertake "painful, fundamental changes if they are going to be competitive internationally and viable in the long term."
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Who can disagree? In today's political lexicon, "Detroit" has become synonymous with failure--a shell of a city inhabited by a shell of a once-mighty industry. It is, in various tellings, the product of individual achievement laid low by collectivism run amok, or of innovation smothered by addled corporate managers and sclerotic labor contracts. Libertarians against unions, environmentalists against gas-guzzlers, or car enthusiasts against bad engineering--everybody can find something to loathe.

But, for all of Detroit's mistakes, it is also a victim of something it did right: ensuring a middle-class lifestyle for bluecollar workers. When the carmakers, pushed by unions, agreed to provide workers with a steady level of purchasing power, comprehensive health benefits lasting into retirement, and various forms of workplace rights, they were promising something that all Americans covet. And, while the financial costs and managerial constraints associated with that effort have helped bring domestic carmakers to the edge of collapse, ultimate responsibility for this situation lies beyond Detroit.

In a more enlightened society, after all, government would have made those promises and extended them to all workers, thereby spreading the burden of financing them to all taxpayers. That's how it's done in Europe and in Japan--which, not coincidentally, is the home of Detroit's most successful competitors. But the U.S. government never took that step. So, instead of a public welfare state, we got a private one, administered for only some workers and paid for by their employers. Sooner or later, this arrangement was bound to fail.

The creation of this privately run welfare state came neither easily nor quickly. It was the result of a decades-long transformation, carried out in two stages: first, when unions took advantage of New Deal legislation to transform life on the factory floor; then, when unions used their bargaining power to secure more generous compensation. And, to appreciate just how dramatic those changes were, it's worth recalling what life as an autoworker was like before this transformation began.

[unhappycamper]

1. Good article - thanks!

:thumbsup: