United States can't afford another failure
Of all the rationales presented for and against granting federal aid to the U.S. automakers, the worst-expressed has been national security.
The notion is that America must maintain a large-scale manufacturing base to ensure the capacity, should the need arise, to build weapons of war on a massive scale. It's actually a legitimate argument supported by our experience in World War II. The problem is that it misses the greater threat and perpetuates the mind frame that American national security starts and ends with our capacity to manufacture and deliver munitions. Have we learned nothing?
In the current economic climate, Americans with foresight envision the massive unemployment and broad-ranging consequences that will result if Detroit's automakers are allowed to collapse. We've witnessed enough in the past decade or so to accept that our actions as a nation have unintended but predictable — and often predicted — consequences.
The most recent example comes from the former U.S. Air Force interrogator who, under the pseudonym Matthew Alexander, wrote that "at least half of our losses and casualties in (Iraq) have come at the hands of foreigners who joined the fray because of our program of detainee abuse."
At the George W. Bush disapproval party, Americans were the last guests to arrive. The United States already is on probation, with a chance at redemption as our leadership changes. The entire globe currently endures an economic downturn of our making, and they know it. The mortgage crisis is one of the few things of late made in America. The fall of a major U.S. auto company would be another high-profile sucker punch to world markets.
Owners of Ford and General Motors products overseas, where the companies are comparatively successful, would share our fate: anything from minor inconveniences to vanishing replacement parts and warranty service, accompanied by a precipitous drop in resale value. It's just such accelerated depreciation in the wake of $4/gallon gasoline that has left American SUV owners owing more on their loans than the vehicle is worth. The same situation is costing banks and the automakers themselves billions of dollars a year as SUV leases end and onetime assets come back from consumers as liabilities.
So when developing nations look to the United States, their onetime exemplar, and see wars, torture and capitalism that has the power to cast the world into economic turmoil but not to support an American car company in America, do they turn instead and ask themselves if maybe China and Russia have the better way of doing things? Iran or Pakistan?
The Detroit 3's long-term prospects are questionable, the money they've requested probably won't be nearly enough, and there's a solid chance that Congress' many conflicting objectives and conditions will ensure eventual failure. In ordinary times, the American thing to do would be to let one of these companies fail for its innumerable missteps. A healthy market would keep the other companies and their shared suppliers in business and remind them how important it is to keep their eyes on the ball.
But nothing — from the size and complexity of the auto industry to the state of the economy and time frame — is ordinary. From my perspective on the industry and its extensive reach, from the local to the international, I believe the disaster scenarios are realistic, and it has nothing to do with the marketability of cars. We have to try something.
I'm reminded of a long-proffered challenge to global-warming skeptics: The consequences of inaction are so dire that the only wise course is to assume the hypothesis correct. Free-market principles and American jobs aren't the only things at stake here. It's everything.
Joe Wiesenfelder is senior editor of Cars.com, based in Chicago.
