America is faced with a major crisis in the auto industry, as the Big Three auto makers, General Motors, Ford and Chrysler are all faced with likely bankruptcy if the United States government does not come to the rescue with loans in the very near future.
There is a temptation to say that it is their fault, that they have produced cars that the American public does not want, that their CEOs have abused their positions and shown no signs of leadership, but rather of greed and excess and lack of corporate responsibility. Therefore, many are saying that the auto makers should be allowed to die, or at the least, reorganize. Accusations of corporate socialism abound, and it is hard to have sympathy for companies so poorly run and administered.
The problem with this viewpoint is that the collapse of the domestic auto industry would affect millions of workers, not only directly in the three companies but also in ancillary industries, and would add two to three percent, at the least, to the present unemployment rate of 6.5 percent. It would devastate the industrial Midwest in particular–Michigan, Ohio, Indiana and Illinois–and would affect the budgets of cities and states in the area and would have an "avalanche" effect on the entire American economy. Back in the 1950s, it was said that as General Motors went, so went the nation.
Therefore, it seems to me that we cannot allow the dissolving of the industry as it would have a deleterious effect on the entire economy, but the auto makers MUST orient themselves to the competition they face from Toyota, Honda and other foreign competition in the field, and produce cars that represent the future of transportation. The CEOs must not be allowed to abuse their positions, and new leadership must be installed, and the US government, in return for assistance to the industry, must insist on transparency and close oversight and regulation of the auto makers as the price to restore the industry and keep millions of people working.Â
Hopefully, the troubles in the auto industry will not be allowed to escalate to the point that it promotes a general collapse of the economy and the onset of a Great Depression, but I must admit I am very concerned and wonder what the future holds as President Elect Barack Obama moves closer to Inauguration Day.