As goes General Motors, so goes the world?

Don't think bailout, think big! Restructuring the U.S. auto industry could be just the ticket for a wounded planet.


Andrew Leonard
November 12, 2008 10:22PM (UTC)

Whether you blame labor costs or management missteps or the (temporarily easing) energy crisis or the financial meltdown, there is no avoiding the conclusion that Detroit's Big Three automakers are in dire straits. General Motors is on the verge of being forced to declare bankruptcy; the symbolic, political and economic consequences of such an event would be immense.

Politically, the battle lines are clear. President Bush resists a bailout, while Barack Obama and Nancy Pelosi support immediate assistance. The Democratic stance is entirely understandable. One of the reasons that Michigan and Ohio voted for Barack Obama was in the expectation that their troubled economies would receive direct government attention. Labor unions threw considerable weight behind the Democratic ticket, and they deserve payback. If evangelical supporters of George Bush had the right to expect conservative judge appointments and restrictions on stem cell research, then working-class Midwesterners are equally justified in expecting delivery on Democratic economic promises. That's how a democracy works, in theory.

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Still, the prospect of pouring billions of dollars into the black hole of the domestic U.S. car industry is disheartening, even if the New Yorker's James Surowiecki is correct to argue that, just as with, say, AIG, the downstream effects of a G.M. bankruptcy would be so destabilizing to the larger economy that standing back and letting it happen is indefensible. But a chorus of other pundits argue that bankruptcy is an entirely appropriate strategy for the Big Three, and that the global economy will continue to function even if G.M. and Ford and Chrysler are chopped up into little bits, streamlined and restructured.

I think the real challenge here is to think of U.S. automaker woes as an opportunity instead of as a disaster to be papered over with some more government largess. The auto industry occupies a critical position, not just in the U.S. economy, but also in the struggle to cope with climate change and the energy crisis. (Enjoy sub-$60-dollar-a-barrel oil while it lasts, folks, because it won't be for long.) The government has immense leverage right now to force the Big Three to make progress on multiple fronts, and should not be afraid to use it.

Barack Obama has spoken many times of his ambitious plans to steer the U.S. toward a future where Americans are driving fuel-efficient cars that run on renewable energy. If the government is going to bail out the auto industry, it should do so only with the explicit requirement that the Big Three accelerate down that road as fast as they can. There's already $25 billion available for retooling factories, but that's just a first step. A Manhattan Project-scale plan to move the U.S. into an energy-sustainable future should start with a complete restructuring of the automotive industry. It's time to think big.

Bush's reluctance to help the auto industry or pass another stimulus plan, even while the tap opens further for Wall Street every single day, has more than just the appearance of unfairness -- it's as tone deaf to the current political and economic climate as he's been during his entire administration. But coming up with some piecemeal legislation that Nancy Pelosi and Harry Reid can present Bush with the option of vetoing during the next two months is a waste of time. Right now, Democrats should be putting their heads together and crafting a plan that provides an economic stimulus and restructures the automotive industry in support of the aims of cutting back on fossil fuel production and reducing greenhouse gas emissions. It's a big job, but in two months something could likely be concocted that would be ready to go on Jan. 21. It's time to seize the day.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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