A priceless national asset – the U.S. automobile industry that powered this nation through a century of progress and helped this country muster the strength to fight world wars while contributing immeasurably to the fabric of America and the development of our vast middle class – is on the precipice of total disaster.
A century of of living, breathing American industrial and social history is facing certain collapse if some sort of government loan package is not put together in the next 60 days.
What does it really mean?
For the record, one out of every 10 working Americans is either directly or indirectly dependent on the U.S. auto industry for their livelihoods. Think about that figure for a moment.
And then think about the fact that if this key American industry is allowed to fail, almost three million people would be out of work in a matter of months, adding up to a $150 billion loss in personal income and a corresponding drop in taxes available to communities all across America.
And what about this notion that if Detroit fails “it won’t affect me” so why should I care? Let’s take one example, the NUMMI joint manufacturing operation between GM and Toyota. It’s the only San Francisco Bay Area car factory and it employs 5,000 people.
But there are tens of thousands of additional jobs involved because there are more than 1,000 suppliers in California that provide parts to NUMMI, and they in turn employ 50,000 people.
That’s just one factory. Now multiply that by the staggering totals involved if GM – which has 22 stamping plants and 26 powertrain plants alone in North America on top of its assembly facilities – and the rest of the domestic automobile industry is allowed to fail. The tentacles of this kind of cataclysmic disaster would spread throughout the nation’s economy like a virus that could not be contained.
In towns all across America, countless mom and pop diners, stores and peripheral neighborhood businesses that depend on the workers who toil at these factories and plants for their incomes would simply dry up and blow away if the local auto manufacturing facility or supplier plant shut down. That’s not an exaggeration, that’s a simple fact.
Three weeks ago in Washington, America watched as members of Congress regurgitated the now-obligatory woeful misperception of Detroit – a Detroit that hasn’t existed for the better part of a decade, by the way – and the message in those hearing rooms was clear: Detroit put itself in the shape it finds itself in by building bad, low-tech cars that nobody wants.
And that simply isn’t true.
Proof of that was on display when the talk in those hearings kept revolving around Detroit’s need for restructuring, as if it was a new-fangled idea that hadn’t occurred to the Detroit CEOs.
Yet, the congressmen had to be reminded over and over again that Detroit had been restructuring and revamping since 2000, that Detroit hadn’t been operating in a vacuum, that Detroit does build competitive and class-leading products, that Detroit has pioneered new technologies, that Detroit is a viable, relevant, strategic industry that’s part of the crucial fabric of America’s manufacturing base, that the worst financial crisis in seven decades had wreaked havoc on their ability to do business, and on, and on, and on.
We live in a global economy that isn’t big on history or what we as a nation once did or stood for. America must compete, or else we will arrive at a point when our national future will transition from being one of destiny to one being dictated to us by an unsavory set of circumstances and interests not in line in the least with our hopes, our dreams or our thinking. And that means shoring up our manufacturing base and supporting our homegrown industries that are so intertwined with communities all across this nation.
The time for all of the idyllic, “let the free market run its course” hand-wringing is over. It’s far too late for that. This country’s leadership needs to get these loans to the domestic automobile industry in the next 60 days, or life as we’ve come to know it in this country – and I mean every part of this country – will be severely and unequivocally altered.
Peter M. De Lorenzo is author of The United States of Toyota and publisher of the influential auto industry weekly Autoextremist.com.
