Sunday, December 7, 2008

Triaging Detroit

"The definition of insanity is doing the same thing over and over, but expecting different results" - Albert Einstein
Being faced recently with my own health crisis has, in some respects, helped me put the so-called Auto Industry crisis into better perspective.

Here are a few additional thoughts:

• The 'problem' has not just happened overnight! There has been a long history of missteps and mismanagement which are not likely to be quickly or easily resolved by government rescue plans.

• Many solutions are already known, which for various reasons have not been implemented sufficiently to address the root causes of the 'problem'.

• A 'hands-off' approach - as advocated by so-called 'free market' advocates - would certainly efficiently remove some problems, but might also create other problems that could prove worse.
[Such an approach might be analogous to rejecting any medical treatment, thereby relegating the patient to die a 'natural' death]

• Government will get blamed for any demise of the Auto Industry, regardless of who is in power, or what action is -or is not- taken. That is a given that needs to be understood.
But, this problem should NOT be externalized to the government for resolution, nor should citizens be so burdened.

• Before any government funds are granted, they ought to be invested in viable solutions that are proposed by the individual Auto Companies themselves, because they need to become part of the solution, too, and be accountable, both for results and for repayment of government investments.

• The United Auto Workers are the common thread that unite the Big Three auto makers, because that union has historically played the companies against each other in a corporate blackmail scheme to get ever-higher wages and benefits. The UAW is a big part of the 'problem', and would like this to be seen as an 'Industry' problem, not a 'company' problem.

• Republican Governor Pawlenty of Minnesota has recently characterized the 'Big Three' this way:

- Chrysler is owned by some of the wealthiest people in the world, who recently bought it with their eyes wide open.

- Ford is in trouble, but doesn't need funding now, only a future line of credit.

- GM is simply a 'basket case'

By this assessment, and if government has to pick winners and losers, we could cut GM loose to fend for itself, ask Chrysler for an iron-clad payback plan on any viable proposal they develop that seems reasonable, and set aside funding a Ford line of credit.

• Comparing the Banking and Auto industries -and any 'deals' that might be provided - is like comparing apples and oranges, but understanding they are both fruits.
Each industry -and each company- needs to be responsible for diligent management, paying back any government funds provided and protecting citizens interests!

If we agree that keeping a viable auto industry is in our country's best interests -like the Aluminum Industry- then, there are some things the government can do to help.

For example, we could commit to buy AMERICAN produced vehicles for government use, and offer incentives for others to do the same, like tax credits, or contractor requirements.

The government could/should buy all of its military vehicles, trains, buses, SUV's for Secret Service use and General Service Administration fleets, with the caveat that producers reasonably compete with worldwide prices in the future.

The government can set aggressive standards for fuel efficiency, use of sustainable materials, ease of maintenance, longer obsolescence goals, lesser frills and the lower costs that would accrue to these type of standards.

The auto industry has been notoriously slow to grasp; accept and innovate safety, fuel efficiency and environmental improvements for decades, and this behavior must be reversed!

Some of these changes can be eased greatly by the simple introduction of true competition between manufacturers, and others
by being realistic and forward-looking goals and standards.

Most of these things don't require the outlay of much Federal funding, and only outdated policy, special interest political power and inertia seem to be standing in the way of real progress.

it's time these obstacles are overcome, but only the Federal government can make it happen.
Let's get this done without further delay!

Incidentally, for those interested, I am recovering from major surgery and expect to be back home by early next week.
I appreciate the good wishes and concerns expressed by many people, and expect to further clarify my situation soon.