The famous saying, "What?s good for the country is good for General Motors, and vice versa," might have made some sense back in the 1950s. But, as today's news of GM's plans to slash 25,000 manufacturing jobs in America might indicate, the hoary old aphorism appears to need a bit of an update for the 21st century. Today, I suggest that the expression, "What's bad for General Motors is also bad for the country," makes a lot more sense.So, what's wrong with GM anyway? Unfortunately, a great deal. For starters, GM keeps making vehicles that people don't want, losing market share to domestic and foreign competitors alike, and suffering through its worst financial crisis in many years - $1.1 billion in losses during the first quarter alone. Aside from its self-inflicted wounds, however, there's a broader problem, and it comes from people you'd expect to be pro-business: the Republicans. Let me explain.
Problem #1: health care costs. Unlike car companies based in Europe or Japan, U.S. automakers are stuck with footing a huge bill for worker's health care. For GM, this adds an estimated $1,500 to the cost of making each GM vehicle. GM Chairman and CEO Rick Wagoner points out that this puts his company at a "significant disadvantage versus foreign-based competitors."
Gee, could this have anything -- anything whatsoever -- to do with the fact that places like Germany and Japan have national health care and we don't? In other words, over there health care is paid for by everyone, as the "common good" that it is. Here, the burden falls disproportionately on individuals and on corporations like GM. In this context, I'd love it if someone could remind me exactly how it is that Republican opposition to universal health care counts as "pro-business." Even better, maybe we should ask Rick Waggoner his thoughts on the subject right about now. Something tells me he might have a few choice words for Republican lawmakers, the ones who opposed national health care back in the 1990s, and continue to oppose it today.
Problem #2: U.S. energy policy, or lack thereof. Fact is, without a push from the government the U.S. auto companies often are reluctant to move forward, whether it's on seat belts, catalytic converters, air bags, or fuel efficiency. The lack of a U.S. energy policy, and specifically a tightening of vehicle fuel economy (CAFE) standards, has encouraged U.S. automakers to keep churning out gas guzzlers.
Now, with gas at $2+ per gallon, and with the Japanese way ahead in hybrid technology, U.S. auto companies are caught with huge overcapacity in big, gas guzzling monstrosities. Looks like we're back to the late 1970s/early1980s. Apparently, these companies - and many U.S. politicians, especially members of the GOP - never seem to learn from history, thus dooming themselves to repeat it.
Problem #3: "Free" trade. Hey, I'm no protectionist, but how on earth are American workers supposed to compete with people who work for next-to-nothing in China, Mexico, Eastern Europe, and Southeast Asia? When are we going to seriously pressure China to stop keeping its currency artificially low (thus lowering the cost of its exports) and to start respecting worker and human rights (thus raising wages)? So far, though, what we see from President Bush and the Republican Congress is more of the "same old, same old" - selling American workers down the river while letting our competitors get away with murder -- literally, in the case of China.
The point here is not to absolve GM of causing, or at least exacerbating, many of its own problems. However, while we're blaming GM we must also point a finger where it belongs -- at our national political leadership, or lack thereof. And, last time I checked, the Republicans have controlled both Congress and the White House for several years now. With this in mind, perhaps the old saying really should be changed to, "What's good for the GOP is bad for GM, and vice versa."