An estimated 7.2 million U.S. jobs are dependent on auto manufacturing. These aren’t simply jobs in Detroit. Shut down auto production and you don’t just lose autoworkers. As Leo W. Gerard, United Steelworkers international president, says, you “drive down overall employment, from people to make auto catalogs and shipping boxes to workers making glass for windshields, rubber for tires and other materials.”
And many communities will feel the devastation beyond Detroit.
“Shreveport is nowhere near Detroit,” says Cedric B. Glover, the mayor of Shreveport, La., “but making quality American vehicles… has created terrific business opportunities in our community for other manufacturers, auto dealers, advertisers, radio and TV stations and dozens of other local companies.” And these companies, the mayor notes, “form the tax base to pay for local services like schools, police and fire departments.”
This is why President Obama and Congress stepped in to rescue Chrysler and General Motors from bankruptcy. GM got $15.4 billion in loans from taxpayers, with billions more to come. The U.S. is likely to end up the majority owner of the company. Yet GM is now circulating a document that says that, under its new plans, the number of cars made abroad in low-wage countries and sold in the U.S. will roughly double. We didn’t bail out GM so it could profit from moving more jobs abroad.
Any demand to rebuild in America will immediately unleash cries about protectionism. But protecting American jobs and the American economy is exactly why taxpayers are being asked to save GM.
The Europeans don’t hesitate to demand conditions on the assistance they give their companies. The Italians provided $1.7 billion in aid to Fiat, on the condition that the plants stay open in Italy. France loaned $8.5 billion to its big three automakers, but again with pledges to retain plants.
For too long, the U.S. has let multinational companies and banks define our trade policies. So now we import $41.5 billion in cars and light trucks from Japan and $7.5 billion from South Korea. Yet we export only $534 million worth of cars to Japan and $373 million to South Korea. This isn’t about taste or quality. They keep their currencies low and use a range of non-tariff measures to help limit imports. They are committed to sustaining a strong auto industry.
But now we’re saving GM and Chrysler, not so their investors can make bigger profits, but so that Americans aren’t ravaged by the loss of jobs and the depleting of entire communities. Autoworkers have agreed to unprecedented cutbacks in pay and benefits and retirement protections to keep those jobs here. “The bottom line is GM would rather pay $2 an hour and it’s a slippery slope downward,” said Alan Reuther, the UAW’s legislative director. “If GM is going to be getting government assistance, they ought to be maintaining their manufacturing footprint in the U.S. rather than going off to China, Mexico and South Korea.”
It is time for the U.S. to take off its blinders. Gerard and the Association for American Manufacturing launched an 11-day, 34-city “Keep It Made in America” bus tour to raise the heat.
U.S. loans should be conditioned on promises to keep plants open and not lay off workers here at home. Let’s build a comprehensive industrial policy for the auto industry. Pass the bill giving people “cash for clunkers” — subsidies to trade in old, fuel-guzzling cars for new, high-mileage vehicles with made-in-America content requirements. Link support for R&D with a drive for new energy that will allow companies to plan and innovate. Enforce a level playing field in global trade. And insist that U.S. subsidies be used to sustain jobs here, not expand them in South Korea or China.
We want GM to rebuild, but to rebuild in America.