<p>According to history, in times of economic crisis countries acting independently in their own self interest, e.g., protectionism, and not acting the global interest is how global recessions become global depressions. </p>
<p>I agree this is very complicated. The industry says 1 in 10 American jobs is tied to the auto industry. While it is probably an exaggeration, the number is very significant. Yet the US is now a highly unlikely place for cost effective auto manufacturing. Nursing the industry back from death really make little sense other than job preservation. In an ideal world we would retrain industry employees for growth industries.</p>
<p>There are a lot of jobs tied to the auto industry but not necessarily dependent on GM, Ford, or Chrysler. Companies like Toyota, Honda, Nissan, Hyundai, BMW, Mercedes, and others all have auto factories here. Meanwhile, many of the vehicles we think of as American are actually built in Mexico, Canada, Korea, Japan, and elsewhere. </p>
<p>People still need cars though which means there’ll still be vehicle sales lots, auto repair and auto parts places, loans, and all the other jobs associated with the auto industry so it isn’t like these jobs will suddenly end if GM, Ford, Chrysler had to suffer the consequences of their own poor business decisions which includes consenting to costly union contracts.</p>
<p>I have a Toyota that was built in Kentucky with about 93% US content. It appears to me that the United States employee can compete in building automobiles. The big three have cost structures that other carmakers have and puts them at a competitive disadvantage with respect to foreign automakers that make cars in the US. I would prefer to see those other competitive issues resolved, by the US Government if necessary (and they look necessary here), then by simply giving the automakers cash. If we give them cash to stay in business with a broken business model, then they will be back in three months for the next required handout.</p>
<p>I read the (link) article and I still don’t understand what PM Brown is getting at. How is loaning GM cash during a financial crisis “protectionism” (especially in light of subsidized european industries like Airbus)? I do agree that Detroit’s situation is largely of its own making, and that simply throwing money at the Big Three is poor policy. But providing a year or two of breathing room is certainly preferable to dumping another hundred thousand workers onto the streets this year IMHO.</p>
<p>I do not understand what Brown is trying to say.</p>
<p>I do, however, believe that loaning money to the auto industry might be a wise thing. Yes, U.S. auto management has made a lot of mistakes over the years. But gosh, unless I missed something … didn’t the execs who contributed to the current economic woes due to bad lending and trading practices mismanage? Why are people in a rush to hand billions to Wall Street, but they can’t seem to get behind LOANS to a manufacturing sector that is directly & indirectly connected to thousands of JOBS?! I truly don’t get it. Why is rewarding greed with a bail out okay, but helping an industry that manufactures a real product taboo?</p>
<p>Think carefully about where we manufactured what we needed to protect ourselves in WW1 and WW2. If we decide that we can just buy our autos from some foreign company, don’t think that our enemies won’t notice that we no longer have the capability to manufacture what would be necessary to protect ourselves in wartime.</p>
<p>Kelsmom, think of the Wall Street bailout as having been done to assure the average person and business has access to credit. The auto bailout would be a whole different things.</p>
<p>Certainly Brown needs to take a hard look at protectionism in his own country, but the point he’s making is as we become a global economy, countries need to let go of industries they need to subsidize to make work. Countries will have “roles” that make sense for them in a world economy. Auto manufacturing will be increasingly done in developing countries by low cost labor rather than high priced American unionized workers. This also goes for the guys supplying the glass and other parts.</p>
<p>And so I ask again … how will we be able to protect ourselves if we do not retain the means of manufacturing what we need if we are threatened with war? The risk of being “global” in our thinking is becoming vulnerable. I detest war, but I know for a fact that the world is full of those who would be happy to attack us if we couldn’t protect ourselves properly. We must consider carefully what we are giving up if we move toward having “roles” in this brave new (global) world.</p>
<p>The more I think about this, the more I understand why people are opposed to globalization. I guess I didn’t understand the implications. If being a global world does indeed mean that each country has some role to play in the world’s economy, I am not a fan. I think we must be self sufficient. We must be able to grow our own food, manufacture our own goods, provide our own means of transportation to get the food and goods to our people. To assume other countries should do these things for us is a very dangerous assumption.</p>
<p>“Auto manufacturing will be increasingly done in developing countries by low cost labor rather than high priced American unionized workers.”</p>
<p>How about auto manufacturing will be increasingly done in developed countries with highly skilled labor using automation to make the highest quality and most efficient vehicles in the world?</p>
<p>Various factors result in the big three with cost components that other manufacturers don’t have. If you remove health care costs (other countries subsidize their companies in this way) and pension costs, Detroit would be on a more even footing and would be better able to build the cars that people want instead of having to build cars with a higher margin to support their additional costs.</p>
<p>I think it’s terrific that Korea has been allowed to export it’s well-made and reasonably-priced goods. I think Scotland does a good job with whiskey, and I love having fresh Chilean grapes off-season. Oh, and did I mention how wonderful it is that cheap Middle-eastern oil imports allow us to put off any decision-making on energy policy! (Sorry, I got carried away there a little bit.) But England — what is England’s place in the new “do it where it’s done best” world? That would make them what, a nation of gardeners and royalists?</p>
<p>Hmom5, are you aware that Honda, Toyota, Mercedes, BMW, Nissan all have very successful plants right in the USA? The only problem building cars here is building them in Michigan with old union ways.</p>
<p>They’ve had hiring boards outside their offices for some time now and they showed up at a local career fair. One of the local plants or offices has a huge field with all sorts of strange-looking objects in it. We also see some pretty strange-looking helicopters from time to time.</p>