Friday, May 29, 2009

Try This On For Size?

Today I am going to talk about something I know very little about, the auto industry. I figure that so many people on TV talk about things they know little about, why not me too.

GM and Chrysler and their bankruptcy is in the news this week, but I can not help myself from taking a more historical perspective of this whole problem of the American auto makers.

Coming out of the Second World War, the United States participated in the United Nations and came up with the Marshall Plan to rebuild Europe. The Cold War with the Soviets was underway, and the United States was locked in a struggle for the hearts and minds of Europe and Asia. By 1949, China was lost to the Communist block and the chess game was set for the next several years. How many more pieces from the board were we going to lose? Certainly without the Marshall Plan to help rebuild Europe, there is no sure bet that capitalism would have won out over an even bigger socialism. Would the rest of Europe go Communist as well?

It was our foreign policy of Containment of Communism, to see to it that democracy and capitalism won out in Europe as Eastern Europe had already been lost, that drove our commitment to Western Europe and Japan.

Against this back drop comes the American auto industry and the economic playing field that would emerge over the second half of the 20th century. It is my opinion that foreign auto makers had an economic advantage over the American auto manufacturers and that this advantage got bigger and bigger with each decade. The trade policies with regards to those countries that were selling their cars in the United States were hardly a level playing field for a variety of reasons. Could we even sell our American made cars in their countries?

Books can be written and will be written about the American auto industry from the historical perspective, but I am not the person to do it. All I know about cars is how to drive them and how to fill the tank with gas. Yes, I also know how to put in the oil, but beyond that I have no interest. Cars, for me, are a means of transportation, and in my mind, a perfect world, would have trains running everywhere.

Stay tuned.


Butch said...

There are a lot of individuals like yourself that know where to put the key, fill the tank and to have their oil changed today. This newer generation has no concept of what or where cars really came from other than what country. In fact I would bet that they really know more about the cars from overseas and possibly their history than our own.

After the second world war Europe was in shambles. There had been many automobile manufacturers and most are gone today. Porsche almost ended up in France while the companies father, Ferdinand Porsche, was imprisoned for following the orders of Hitler to make the VW.

Audi, Benz and Daimler were also there and still here today. Saab (Swiss Air Inc in translation)was a car company then a war machine manufacturer and then a automobile manufacture again. This is how the Swiss tried to get their economy going again. Lesson here, the auto industry has always been a driving force to a countries economy. We, the Americans helped all these countries and their auto industries get back on their feet after the war.

The same is true in Japan. After destroying two cities we then went in to help them rebuild. An American went in and founded just in time inventory but it didn't come to America until the late 80's and when it did most people thought it was a Japanese idea. Their auto industry brought them into the economic world with authority.

People talk about how bad American automobiles are. You and I are near the same age. We have been around when the joke was buy it on Saturday and return on Monday to get it fixed. What we forget is if you owned the precious MG, Triump, Austin Healy, Saag, Citreon you had to work on it on Sunday to drive it on Monday. More so the English than the French but they had their problems. On the other side of the ocean it was the rust buckets that came ashore. Buy it today and it will be nothing but rust in six months.

ALL the car manufactures have improved their vehicles today. It has become a choice of what one wants, not true knowledge of what is available. We Americans have spoken to the industry and told them we want BIG SUV's that suck the gas up. Well at least until the pump price hits 4+ bucks. That price is why you don't see them in Europe and why you see diesels there more so. That is why Ford sells a hot little Focus over there more than here. We want big, it's American to want big. We exploit big to no end.

We now have a foreign company, Fiat, a union, UAW, and two governments that are going to own and American company, Chrysler. Chrysler and Daimler were called a partnership. We may soon have a similar thing with GM, the union, our government, the Canadian government as well as some added interests like the German government and a auto parts company, Magna headquartered out of Aurora, Ontario, Canada.

Your right, history, the auto industry and economics go hand in hand. Unfortunately not enough people today care enough about history to keep it from repeating itself for one and to know how to handle it. You can't think out of the box if you don't know your history.

The auto industry needs saved. It use to employee more individuals than anyone else. Globalizing has destroyed that and now GM wants to close plants and import cars from China. Oh yea, on our tax payer money.

I don't have the answer to the next question of "why" because it is a circle that gets bigger and that means the lines can never meet. Where is the level playing field in this?

Butch said...

Here is a neat timeline article from the NY Times. Click on the 1910 button above timeline to change. At the end is a financial look at the downgrade of GM and Ford.