(or A Long Term Solution for Our Auto Industry)
There is a reason that the U.S. auto companies are bankrupt and it is not just that we are having an economic downturn. That has merely accelerated the crisis. Last week we the taxpayers gave the automakers a one month reprieve in the form of a loan which cost 15 billion dollars. Next month we need leadership to do something that addresses the core problems in the industry as well as look at the economic big picture.
Auto industry problems:
1. Health care costs have been undermining the U.S. auto industry for well over a decade adding substantial overhead to the costs of manufacturing a car.
2. We are in a recession. Car sales are down by 1/3 and are not expected to improve in the near term.
3. The shortsighted choices of product line and more that have contributed to downward spiral of this huge American industry.
Sensible responses:
1. The vast majority of Americans are calling for health care that serves them and does not bankrupt them or the companies they work for. Dozens of other countries provide their citizens with better care at a fraction of the cost of U.S. health care. Time to learn from success.
2. The auto industry has the capacity to build more cars than consumers have the resources to buy for at least a year if not four. What might we do with all that excess capacity? Hmmm, we want to keep autoworkers employed, we want a competitive auto industry and we want clean renewable energy to power our economic recovery. So, why not convert 1/3 of the automakers' industrial capacity to building state-of-the-art wind generation?
You don't need to be an economist, an engineer, or a government leader, to see the common sense in this solution. During World War II the car industry turned into a tank industry. We need to be strategic in solving our economic and energy woes. This is in fact a great opportunity and a far less dramatic adjustment that WWII required.
3. Might be time to consider a change in management.
Like I said I'm basing this on common sense -- I'm pretty sure it is time to tap some of the good old American know-how and entrepreneurial spirit before our cautious, short-term, don't-make-waves solutions send us down the drain.
