The media have been terrible in explaining how the homegrown car companies landed in their present fix, when other U.S. manufacturers (Boeing, GE, Caterpillar) manage to survive and thrive in global competition. Critics beat up Detroit for building SUVs and pickups (which earn profits) and scrimping on fuel-sippers (which don't). They call for management's head (fine -- but irrelevant).
These pre-mortems miss the point. Critics might more justifiably flay the Big Three for failing long ago to seek a showdown with the UAW to break its labor monopoly. In truth, though, politicians have repeatedly intervened to prevent the crisis that would finally settle matters.
The issue at hand is the future of the UAW, not the future of automobile manufacturing in the United States. Nonunion shops like Honda, Nissan, Toyota, BMW and Daimler (minus Chrysler) are doing fine making and selling cars in the US despite miserable sales.Once upon a time, businesses facing economic hardship were reorgainzed by the courts in a process known as bankruptcy. Chapter 11 would give GM, Ford and Chrysler the opportunity to void their UAW contracts and compete for labor like everyone else. The Dems will instead seek to keep the courts, normally their preferred forum for political change, far from this issue to protect their Big Labor patrons.
On the side we note and interpret the convergence of two seemingly unrelated elements of all this. One is that Obama leaked to the press (via surrogates, no doubt, but doubtless from him, as he was the only person in the room with Bush) that Bush asked for support for free trade with Colombia in exchange for support for the Big Three Bailout. The other is that Caterpillar is an example of a company that has reorganized under financial difficulty, managed to keep a UAW workforce, and is very profitable in manufacturing. As it happens, Caterpillar is one of the companies that would stand to profit most from free trade with Colombia, along with its UAW workforce.
Will Obama, Pelosi and the UAW do the reasonable thing in all this? The leak suggests not.
Our President-Elect appears to be set to "rule" in precisely the way that his thin but consistent legislative record suggests.