D-Town Defensiveness

[Blogging is back. I promise to try posting more frequently. Really, I swear. I already got two other posts almost ready to go, I just thought this one was timelier.]

So if you haven’t noticed, the Big Three are going down the crapper. I realized the extent of the shitstorm last week when I met this girl in a club and when I told her where I was from she said, “Sorry about your economy.” In the rush to judgment on the matter, a lot, and I mean a shit-ton, of blame has been tossed at Detroit (both in the sense of the auto industry as well as towards the region and its people). Quite a bit of it is warranted. I don’t need to list the ways the Big Three have mismanaged themselves to the point of comedy (Michael Moore once joked that GM should be allowed to sell drugs because then nobody would want them), any glance at the news will fill you in if you’re curious. But amongst the recriminations being hurled at the RenCen (again, both literally and figuratively) there’s a lot of important aspects being missed.

To begin with, check out this article (which is also posted on my facebook page): http://www.freep.com/article/20081117/COL14/811170379

I won’t recap too much what’s said there, just add my own observations. To the rationalizations!

One of the most frequent criticisms is that GM (I’ll use it as a stand-in for the Big Three, it’s just easier) is simply uninnovative. It’s been surpassed by Toyota (ditto for foreign car companies) in terms of developing new technologies, particularly regarding fuel efficiency and alternative fuels. Setting aside the fact Ford five years ago developed its own hybrid and has the second-most hybrid models (to Toyota), innovation in terms of fuel is an intensely difficult thing for a car company to do because so much is out of their hands. For example: Sony (or whoever, I don’t really know) invents the BluRay disc as an improvement over DVDs. It develops both the disc and the player by itself, and voila, a newfangled, honest-to-God tech-no-lo-gic-al in-no-va-tion (you know, for emphasis). Sony ships it to stores who sell it. Say GM invents a car tomorrow that runs on hydrogen. Who’s going to buy it? Nobody. Not until there are hydrogen stations on every corner. The infrastructure involved with gas is so extensive that no car using something else is anywhere near economically viable. Expecting GM to come out with an answer to the oil crisis is asking them to come out with a car no one would buy. Additionally the research and development costs for experimental fuels are so immense, and the potential returns so small, that the research itself is a financial drain. In 2004 the US government slashed its alternative fuels funding (this was in the transportation bill that almost killed Amtrak, signed into law by our oilman president who said we were addicted to oil). As a result GM had to close its alternative fuel center.

It’s a similar issue with gas mileage. Putting the oil crisis at GM’s feet is simply unfair and disingenuous. America has a problem with oil consumption. This is a fact which goes far beyond our cars. It’s about the way we live, where we live, how we get around, how we ship things, how we conceive of our surroundings, how we view ourselves in relation to the government, society, each other. It is just part of American culture. (Don’t think so? Tell me a classic (in any sense) American movie that doesn’t involve cars or trucks. [If you say “Star Wars” I will find you and hit you.] A better question: how many of you had cars when you were teenagers?) While a case could be made that Detroit is partly responsible for this aspect of our culture, to expect us to change it now, while changing nothing else is just wrongheaded. Everyone knows GM makes giant eight-cylinder muscle machines that run on 100% undistilled Saudi gold, and Toyota makes tiny, fuel efficient marvels of engineering that run on kisses. The fact is, both companies made (and make) cars that Americans wanted to buy. Why? Because driving big cars is part of our culture.

This past summer, while gas prices were skyrocketing, Americans on average drove less than they had in decades. Was this an indication that Americans were more interested in conservation and using cars more intelligently? No. We don’t do that kinda thing. As gas prices dropped, driving went right back to previous levels. To blame GM for building big, fast cars is to blame them for giving the people what they want. And all automakers do it. The Nissan Armada, for example, gets 13 (!) miles per gallon highway, and NINE in the city. It was introduced in 2006.

The fact is, GM’s woes can be much more readily attributed to the current economic downturn (which hurts not only sales, but also financing, another huge source of revenue for automakers) than the models in their lineup. When I was selling cars in 2004-2005 gas wasn’t cheap, particularly at the time, yet despite working at a Ford dealership, people’s financial problems were to blame for the lack of sales, not for crappy cars or bad gas mileage. I even had one customer trade in a V6 SUV for one with a V8. (He almost couldn’t get a loan, but that was for other reasons.) True, fuel-efficient cars are selling better right now, and for the foreseeable future, and Toyota’s are more highly regarded than GM’s. The difference between GM and Toyota (here in the grand sense) is that Toyota’s base in Japan is much more conducive to small cars than GM’s base in North America. That’s just a fact. Could GM have built more fuel-efficient cars quicker? Maybe. They haven’t done a bad job of it so far. (Their displacement tool, which cuts off four cylinders in a V8 on the highway, is remarkably effective.) But they weren’t ready for the state of gas prices. Add GM to the list of American institutions who got caught with their pants down by energy costs in the last year.

A word on unions (you know, the people who brought you the weekend): A lot of people have pointed to the UAW as a (and in some cases THE) source of the Big Three’s financial woes. This line of reasoning goes that the wages and benefits the companies are obligated to pay their workers are preventing them from being competitive. The unions, and in turn the workers, are presented as greedy, lazy, overcompensated and utterly uncaring for the auto companies’ fate. This is, and I cannot stress this enough, reverse class warfare of the absolute worse kind. I find these assertions so vulgar and reprehensible that the words vulgar and reprehensible don’t even convey how repulsive and unconscionable they are. My own confusion as to why conservatives hate unions so much (if capitalism is all about making money, unions help workers make more money; what’s the problem?) aside, the workers not only build the cars, but also helped build the middle class and the mid-20th-century American economy, have already made huge concessions to help keep the automakers afloat, to say nothing of the tens of thousands whose jobs are long gone. (It’s estimated that Michigan alone has lost half a million jobs since 2000, and of that 500,000, 180,000 or so were from automotive companies.) To blame them is fucked up beyond words.

On a related note, GM pays $1,600 per car sold (though estimates go as high as $2,200) to pay for employees’—mostly retirees’—health benefits. This fact is often quoted as an example of the unions’ windfall (or whatever), but if we had some form of government-supported universal health care like Japan, Korea, Germany and Canada, the Big Three would be playing on par with their competitors. (Yes, it’s also true that if GM simply eliminated health benefits they would no longer have to cover those costs. But if you think that’s a good solution, economically and/or morally, you should be first up against the wall when the revolution comes. [I may be getting a little riled up.]) You may notice that I included Canada in that list of countries. You’re probably thinking, hey, Canada doesn’t have any car companies. You’d be right. What Canada does have, in addition to universal health care, are car plants AND unions. Funny, that. As of 2005, Ontario has more car plants than Michigan, and the most in North America. This is despite the fact CAW contracts are virtually the same as the UAW’s, and the unions are actually more powerful because there aren’t any of the government restrictions on unions’ activity found in the United States. Car companies, including foreign ones like Honda, Toyota, Kia and Volkswagon, are building plants in Canada instead of in the South, where they could pay their workers less and avoid unions altogether. So why Canada? Maybe the fine people at Kia really like hockey. But I doubt that’s the reason.

Should GM have done more to promote universal health care? Absolutely. And in the past few years they have lobbied for it. Why they can’t do more is beyond me, and not something I’ll defend, but to be fair, any company that isn’t an HMO would benefit from universal health care, so this could be chalked up to general societal skepticism or whatever.

I’m at 1500 words, so I’ll wrap it up. Does GM deserve a government bailout? I don’t know. Maybe bankruptcy would help them get their shit together. From a business perspective it might be helpful; I couldn’t say. I can say that companies which actually make something tangible are (or should be) much more deserving of assistance than companies who got fucked selling worthless pieces of paper and meaningless numbers in some derivative formula. Whether they get a bailout or not, to single the Big Three out for bad management at a time when companies all over the country, and indeed the world are hurting is simply unfair. And singling out their workers is simply deplorable. And so, on behalf of all D-Town people, I’d like to say:

Fuck all y’all.

(My second choice for a closing line was: 'You wanna take a step back? You standing on my dick.' Something like this:)