Attack on automakers is revisionist junk

By Warren Brown

WASHINGTON — The Mob of Pundits (MOP) is out to lynch the domestic automobile industry.

MOP members, many of them compensated substantially more than the $71,000 annually in wages and benefits paid to United Auto Workers union-represented employees, are much in favor of hanging GM, Ford and Chrysler from the nearest bankruptcy tree.

It is a fate deserved by the American car companies, according to MOP leaders Thomas L. Friedman of The New York Times and George F. Will, a conservative columnist, whose stuff frequently appears on the op-ed pages of The Washington Post.

“Few companies more deserve failure,” said commentator Michael Gerson, oddly arguing in a Washington Post op-ed column last week that General Motors should be allowed to collapse, but that the consequences of such a failure would do grave harm to the American economy.

According to the MOP crowd, American car companies have messed up — making too many trucks and sport-utility vehicles, ignoring consumer and governmental demands for more fuel-efficient vehicles and, as Will stated in a column last week, entering “improvident labor contracts” with the UAW.

It’s baloney.

Americans went truck crazy in the 1990s and in the early years of this century, making light trucks more than 50 percent of new vehicles annually sold in this country, for the same reason they are in danger of re-embracing that madness — cheap gasoline. They were enabled by lawmakers who, with one hand, pushed car companies to increase technical fuel efficiency while using the other to give American consumers the least-expensive gasoline in the developed world.

Increased technical fuel efficiency plus low-cost gasoline fueled consumer demand for more driving and bigger and more powerful vehicles with which to do that driving. Gasoline consumption in the United States soared ... until high fuel prices restored some sanity to the U.S. consumer automotive market.

Faulty allegation

The MOP crowd blames American car companies for causing truck mania. It is a faulty allegation. Car companies follow market demand much more than they generate it. Nearly all automobile manufacturers doing business in the United States aggressively pursued the truck market, offering some version of a pickup truck (Honda Ridgeline, Nissan Titan, Toyota Tundra) or some kind of SUV (Mercedes-Benz M-Class, BMW X-Class, Toyota Land Cruiser, Nissan Pathfinder).

In a cheap-gas economy, trucks and big engines made big money for everybody. Were GM, Ford and Chrysler supposed to sacrifice that market in favor of fuel-sippers, which, before high fuel prices in the summers of 2007 and 2008, barely constituted 4 percent of new U.S. vehicle sales?

The MOP brigade says American car companies should have seen high fuel prices coming. If that’s true, what about Toyota, which chose to introduce a revamped, super-sized, fuel-consumptive version of its Tundra pickup this year just as gasoline prices were spiking? New Tundra sales tanked as a result, forcing Toyota to curtail production of that model.

Ah, the critics say, but look at that fuel-efficient, gas-electric Toyota Prius hybrid.

Go ahead and look at it, preferably in Japan, where the Ministry of International Trade and Industry (MITI) has done a marvelous job of coordinating industrial and energy policy into a vehicle development and consumption strategy that makes sense. We have no such government-industry cooperation in the United States. We have no industrial policy, no energy policy, which largely is why we now have a core segment of our natively owned manufacturing infrastructure teetering on the brink of collapse.

Neither the Japanese, nor the Germans, nor the Chinese, nor the Koreans have been as stupid as we’ve been in this country in the management of the automobile industry.

European and Asian countries tax horsepower. They heavily tax the least-efficient motor fuels, such as gasoline, while giving more favorable treatment to more efficient fuels, such as diesel. In short, they make automobile manufacturers and consumers share the real costs of auto-mobility.

That cost-sharing creates a kind of honesty. Car companies aren’t inclined to design, develop and produce gas-guzzlers because European and Asian consumers are not inclined to buy them. It creates market predictability, contrary to what we have in the United States, where vehicle markets can flower or wither in an instant, depending on the price of fuel. Smaller and more efficient vehicles are seen as high values in European and Asian car markets, where consumers are willing to pay handsomely for those attributes.

Consumer demand

Compare that with consumer attitudes in the United States, where bigger and more powerful usually command bigger bucks and more respect, and where small and efficient get short shrift.

As for the unions:

It is the rankest hypocrisy for well-paid journalists to decry the “high” pay of UAW-represented employees. I doubt that there is one UAW critic in the media, or on Capitol Hill, who would be willing to settle for a UAW paycheck. I’m almost certain there isn’t one who would be willing to trade his or her relatively cushy employment for a year on an auto plant assembly line.

None of this is to excuse the American car companies for mistakes they have made. They’ve made many. But they’ve also done many things right, contributing to the defense of this country; helping to create a viable middle class, especially in America’s minority communities; and contributing to technological advancements in the global automobile industry, as any historical evaluation of automobile technology would demonstrate.

Many adjustments will have to be made to insure the continued survival of domestic car companies, but the most important adjustment will have to come in our national mind-set. We must decide if, like Germany, Japan, China and Korea, we value the development and reasonable protection of core, native-owned manufacturing.