By David Dewolf
I believe there are a number of issues facing the country at this time that are affecting the economy.
I think everyone would agree that the uncontrolled lending of money in the mortgage industry set things in motion and have now sent a number of industries into a decline like we have never seen in our life time.
The auto industry is currently at the center of attention and the national media is having a field day reporting on the problem with management of the domestic manufacturers, union greed and a lack of quality products for the “Big 3.”
Unfortunately, most of the information being reported by the media is unfounded and erroneous. Permit me to put things in perspective and try to set the record straight on certain issues.
I grew up in suburban Detroit. As a young boy in the 1950’s and 1960’s things were very good in Michigan. The Detroit auto makers were building cars as fast as they could and the car companies were knocking down big money. People were moving to Detroit from the south by the thousands, looking for those high paying auto factory jobs. This went on well into the 1980’s even as foreign manufacturers started to make a push for market share. During this period, the “Big 3” ignored the threat from Europe and Japan because their sheer arrogance would not allow them to think that these little economy cars could compete with the mega horse power of Detroit. What fools they were.
Fast forward to 2008. Now everyone wants to castrate the domestic management because they are idiots, the unions are greedy and our products are inferior. On the contrary, the real truth is in the facts.
Yes, the domestic manufacturers are at a cost disadvantage to the imports. Primarily because of union contracts that the U.S. government promoted on the side of the unions. Much like they demanded that mortgage companies give loans to unqualified home buyers.
* GM, Ford and Chrysler spend billions of dollars each month to support retires programs. Import Manufacturers do not have this cost burden.
* GM, Ford and Chrysler are bound by agreements to support laid-off workers for months after RIF programs or plant closings. Imports are not.
Let’s talk a little about product line and quality. The biggest argument I hear is that the “Big 3” does not build as good a car as the foreign manufacturer. That could not be further from the truth. Not only do they build as good a car, that gets as good a gas mileage, they do it and sell the cars much less than the Imports. And, the sales revenue stays in this country.
Let me give you an example. Take a new Honda Civic. Ford builds a competitive Ford Focus, that gets just as good of gas mileage and sells it for $3,300 less than the Civic. Like wise, GM builds the Chevrolet Cobalt which is comparable to the Civic and it cost $4,200 less than the Civic. This is consistent with other models as well. What’s wrong with the American consumer?
Quality: The media consistently reports that the Imports build a superior product to the domestic manufactures. This could not be more untrue, and as a matter of fact the quality out of Detroit over the past 10 years is greatly improved and equal to all the imports. One just needs to read the JD Power reports to know this.
This past week I have watched Congress beat up the management of the “Big 3” and rightfully so. But I find it odd that they are eager to give $700 billion to the banking industry thieves that have stolen trillions from the American people but are reluctant to “loan” with interest, $25 billion to the auto industry. What they refuse to admit is the impact that letting one or more of the “Big 3” go under will have on the country. Pure and simple, GM going out of business will cost the American people $1 trillion the first day. It will put four million people out of work over the next six months. The tax loss will equal at least $100 billion per year. This is a no brainer that some members of our congress just can’t get.
The bottom line is that the “Big 3” must survive for the economy to recover.
Editor’s note: David Dewolf now resides on Palmer Road in Lebanon and is a veteran of the automobile business including management positions in both the retail and auction areas.