Why the South opposes a bailout for Detroit

Republican senators like Alabama's Richard Shelby represent states with thriving, non-union, foreign-owned auto industries.

Published November 19, 2008 4:44PM (EST)

When Michigan Sen. Carl Levin makes statements supporting a bailout for U.S. automakers, he is generally dismissed as a spokesperson for his constituents -- Michigan, of course, is ground zero for the Big Three. No state in the union employs more autoworkers.

So how come Richard Shelby, R-Ala., doesn't get the same treatment? In Congress, Shelby is the most outspoken opponent of a bailout, routinely declaring that the Big Three are "dinosaurs." But if there was truth in advertising, every time he opens his mouth there should be a disclaimer: Sen. Shelby represents the interests of his constituents -- non-union employees of foreign-owned automobile manufacturers.

Alabama ranks sixth on the list of states with the most autoworkers -- by last count 130,000 jobs directly or indirectly depended on the auto industry. Hyundai, Honda and Mercedes-Benz all have state-of-the-art plants in Alabama, producing, among other things, the kind of low-gas-mileage luxury sport utility vehicles that most U.S. consumers are currently reluctant to buy. Toyota manufactures engines for its Tundra trucks and Sequoia SUVs in Alabama. Scores of other parts suppliers thrive, employing non-union labor in a right-to-work state. Alabama also ranks sixth, nationally, in production of cars and light trucks in the United States. All Honda Odyssey minivans sold in the U.S. are made in Alabama. The Hyundai Santa Fe SUV is made in Alabama.

So who do you think would benefit most from a collapse of Ford, GM and Chrysler? How about states such as Alabama and the rest of the South, which have long been busy turning the industrial Midwest into the Rust Belt, well before outsourcing and offshoring and globalization became working-class swear words.

Emptywheel, blogging at FireDogLake, was one of the first observers to pounce upon this, in a post last Thursday, "The Ideological Battle Over the Auto Overhaul Heats Up":

In other words, Shelby isn't opposed to car companies that are stupidly committing and recommitting to SUVs. Rather, he's just opposed to car companies that make SUVs with union labor.

Alabama's emergence as an automobile industry powerhouse has been rapid. Mercedes-Benz opened its first factory in the state in 1993. Today, according to the Alabama Automobile Manufacturers Association, "Motor vehicles were Alabama's top export in 2006 at over $4.9 billion -- equivalent to 35 percent of the state's total exports," and the automotive industry accounted for 13 percent of the state's manufacturing gross domestic product.

Alabama's story is part of the larger narrative of the New South's emergence as an industrial playground for foreign manufacturers, eager to exploit non-union labor -- but still paying better wages than most local industries, thus partially insulating them from the threat of union organizers. It's a narrative that is going to come into clear focus during the next four years, if President-elect Barack Obama attempts to carry through on his promises to organized labor. Standing against him will be a phalanx of Southern Republican senators, led by Richard Shelby, opposing him not just on ideological grounds, but motivated also by clear financial incentives.

By Andrew Leonard

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

MORE FROM Andrew Leonard

Related Topics ------------------------------------------

Auto Industry Globalization How The World Works Richard C. Shelby