Event: A Non-GM Future for Pontiac?

Flint Journal: Pontiac not for sale, GM says, despite local dealership's offer to buy.

I would be interested, next time I wanted to buy a car.

Event: A hundred Wagoner loads of thoughts will not pay a single ounce of debt.

"Here’s the part I find odd. Now, the government didn’t ask any of those Wall Street C.E.O.s to quit. Isn’t that kind of a double standard? I mean, if you build Cadillacs, you’re screwed. But if your chauffeur drives a Cadillac, you’re O.K. Whew!"
- Jay Leno



Two or three days ago, I forget what it was, the news was packed dense with details on the travails of Chrysler and GM, and most of this focused on the ouster of General Motors CEO Rick Wagoner. The Danziger cartoon above encapsulates some of the ironies of the current situation; a career-long affiliation and decade plus executive tenor coupled with an inability to move product. In fact, this is a constant theme in the books I've been reading on the American auto industry: the inability of the executive financial class to reconcile public demand with a speculative market. For a half-century their strategy has favored the latter, and so their decline in actual market share was foreseen and, once started, ongoing.

What I've noticed in the Free Press and among many Michigan politicians (and, surprisingly, late night talk show hosts who usually like to castigate Detroit and the Big Three) is the increasing tendency to contrast the disparity between the treatment of Detroit and that of the New York financial firms. After all, who has been ousted there? There's no question that, at least where the corporate class is concerned, bankers have retained more autonomy and have received less scrutiny than manufacturers, despite the fact that the mistakes made in the financial sector have been by far the worse.

But the ideas and contradictions embodied in the Leno quote are where things really start to get interesting. It prefers conflation by industry over separation by class, which runs somewhat counter to reality. It's actually a pretty funny joke, but not quite correct when we get down to things. Those who "build Cadillacs," that is, the autoworkers and management, are likely to be subject to forced contract renegotiations in the upcoming weeks and months -- in bankruptsy court if not out of it -- and this is where the force of contrast is a source of dark humor. But then Leno also assumed this slight applies to Wagoner personally: "Now, the government didn’t ask any of those Wall Street C.E.O.s to quit." The former GM CEO isn't hurting these days. He received something of a $20 million severance package, so in the words of our president he's "doing fine," he'll "still be affluent." To put it a little differently, in the Danziger cartoon, our sympathies ought to be with the bedraggled dealer who has worked hard to push his unwanted vehicles, not with a hapless and besuited Wagoner.

I don't share the sympathy of the press for GM's former CEO; he had a decade worth of chances, and while he tried harder than some of his predecessors, he didn't try hard enough. The disparity in the government's response is telling, and has more to do with politics than with our economic health. This week is important as the G20 summit will determine whether we will continue to push our economies through aggressive spending (per the US) or whether we will instead pursue aggressive international financial regulation (per the EU). The fact that this is only posed as an either/or proposition shows how unequal governing forces have been to the economic crisis so far. The fact is, we need both.

In the U.S. where we are enacting broad spending programs and will need to enact more, there is no injustice or impropriety in the government's demands on Chrysler and GM. However, we need to see more oversight of the financial sector, and when it comes, it should be in terms as strong as and stronger than the chastisement the auto industry has received this week.

Event: The Saturn Lasted for 19 Years.

New York Times: A Painful Departure for G.M. Brands.

My parents bought one of the first Saturns off the line in '91, and it was a great little car. Not super comfortable, perhaps, and it rattled at high speeds, but great mileage and it felt versatile. This was the car I learned to drive in, and it served me through high school and much of college.

In '96 the Saturn set aside its cool, saavy, expressive face in favor of a bulkier, more rounded look. It also set aside about 10 mpg. I remember noticing this at the time, with dismay. I wasn't paying for the car, but I was helping to pay for gas. I remember thinking, "I couldn't even afford gas one of these newer Saturns."

Saturn, which Roger Smith unveiled as a "process car" that would both revitalize management-labor-consumer relations and effetively fight compact imports was a massive expenditure, already several billion in the red by the time the first car ran off the line. By the time it had the momentum to perhaps start turning a profit, its best vehicles, and debatably its best years, were already behind it.

I'm really couldn't care much less about Hummer and Saab. I agree, Pontiac is an icon, and it will be sad to see it go. But so much was invested in the Saturn experiment that to see it go down so precipitately... it's a disappointment.

Event: Andy Heller discusses the loan.

The Flint Journal: President Bush saves the auto industry, and Michigan lives to see another day.

EVENT: Thank You, President Bush.

Four words I'm not accustomed to saying.

New York Times: Bush Approves $17.4 Billion Auto Bailout.

Event: Where Does $70/Hour Come From?

Save Auto Jobs: 'Mathematically and intellectually dishonest'.

Anecdotal Conclusions:
Obviously my family didn't enjoy this sort of income growing up; we were always comfortable and the fair income did provide me with some opportunities that nonunion employees wouldn't have had, such as music and theater lessons and the opportunity to attend a prestigious (and expensive) private college.
1) $30-40/hour (benefits and pension included) is a very decent wage, but it isn't the $70/hour legacy burden that is so often shoved off on autoworkers.
2) An observation that is (finally) being made is that legacy costs are more than a drop in the bucket, but are an incidental concern when the Big Three aren't making vehicles that people want to buy.
3) New workers aren't making these wages; their wages are in line with foreign competitors. This is, in fact, more of a liability for the UAW than it may sound on the surface, since pay tiers by date-of-hire impose a wage wedge that can push unions apart. Many corporations have exploited situations like this to sow discord in unions.
4) God Forbid blue-collar workers would earn as much as their betied brethren!

Event: Opinion - Senate Seats and Subsidies.

Detroit Free Press: Senate Seat for Sale.

Some quotes:

“They’ve been throwing taxpayer dollars at Toyota for years in Alabama and no one raises a stink about that” Hayes said. In fact, as Olbermann noted, Alabama alone has given more in tax subsides per job to foreign automakers than Detroit was asking for in the bailout plan to save jobs at American companies.

The Big Three haven’t been competing against Toyota and Honda and Nissan; they’ve been competing against Japan. Unlike America, that nation actually has an industrial policy. While our government talked about the virtues of free trade, the Japanese government worked hand in glove with their automakers to help make them the world leaders.

Japan is aggressively trying to do with autos what they did with consumer electronics – undercut American manufacturers, drive them out of business and capture the American market. Japan heavily subsidizes their automakers, they fund their research, they manipulate their currency, and they erect trade barriers that make it virtually impossible for American automakers to export to their country. Think the fact that Pacific Rim nations buy up 80-percent of our government debt has something to do with keeping our government from enacting policies to level the playing field? The bank that holds your mortgage doesn't dance to your tune, you dance to the tune of the bank that holds your mortgage.

I don’t care what you’re manufacturing or if your CEO is Albert Einstein, if you are competing against a country that actually has universal health care, while you’re forced to add $1,200 to $1,500 to the cost to every unit you manufacture to cover your employees’ health care, you’re not going to be competitive. If your country doesn’t rebate the value added tax when you export your product while your competitor’s country does, not only will you be priced out of their market, your foreign competitor’s government subsidy will put them at a tremendous price advantage on your home turf.

Of course, now I've quoted almost the entire column.

Event: Two More Opinions.

My dad sent me this, from 17 years ago.

Car Talk, April 1992.

When I push (hard) for a loan to the Big Three, I'm not favoring a blank check; I've no desire to repeat the Wall Street bailout. Hopefully the White House attaches strict requirements to any aid it gives.

And this is from Hallie.

New York Times: When the Cars Go Away.

The interesting thing is, deindustrialization effectively shielded cities like Detroit, Flint, and Saginaw from the investment excitement of the eighties and the prosperity of the nineties. I had a stable family life, a healthy material life, and a good education, which was why I could bear witness to all this and then write about it today. Because I do feel that people from my part of the country have been treated to a rare sneak peek of what the rest of the country (or even the First World?) may be experiencing soon:

FLINT, MICHIGAN
COMING SOON TO A CITY NEAR YOU

Event: Another Good Article.

Salon.com: Senate GOP to the UAW: Drop Dead.

Body: "Seems I keep getting this story twisted."

?

?

"Somewhere, someone must know the ending?"

Event: Digby Weighs in on the Auto-Industry.

Hullabaloo: They Work Hard For The Money.

This opinion means a lot to me. Digby is one of my favorite bloggers, and the fact that we're on the same, or very similar, pages here encourages me. I've never really read anything of hers that isn't reasonable and responsible.

Concept: Saturn Return.

Not a picture of the actual car, but this is the same make and model, the same Medium Red, and the same hubcaps. The background could easily be a stand in for Southeast Michigan. Come to think of it, this picture was likely taken in Southeast Michigan.

1991 Saturn SL, Medium Red, Manual Transmission

For a sixteen to nineteen year old boy, this guy was one of my very best friends. It wasn't in my name -- my parents got it in 1991 -- but from the first time I almost put it into a ditch (manual transmission; the cars we drove in drivers ed were all automatics) I was as possessive and protective as a jealous lover. This car could safely navigate around the potholes of Flint's industrial strips, transport a group of four of my friends (happy and seatbelted) from the East Side to Ruggeros in under fifteen minutes. It didn't accelerate exceptionally well, but it handled speed well enough to accomodate the most frenetic Detroit traffic (which, unlike Chicago, is fast and efficient as it is deadly). It had a radio but no tape player, and its occasional rattling always seemed to be in time with Banana 101.5 Doors' organs. This car got me down to Pontiac and back for a quarter of a tank, or in 1997, to Chicago for about twenty bucks. Best of all, when McDonalds sold the All American meal... $2.10 for a cheeseburger, small fries, small coke... this car had the perfect amount of space for all three nestled between the emergency brake and the driver's and passenger's seats.

It was a beautiful beautiful thing.

I called it "SL."

Event: More Reasons for the Bailout...

LeftHandedMan posted this brilliant comment on DailyKos:

The GOP never dreamed it would get to kill a massive part of organized labor and have an entire region of the country completely collapse on the Democratic parties watch to boot, but that is just the opportunity that has arisen for the Limbaugh/Coulter wing of the GOP.

A 25 billion dollar loan, with strings attached mandating the auto industry stay the fuck out of monkeying with healthcare reform and making them go green or else, could save hundreds of billions of dollars in social spending over the next 10 years alone.

10 to 12 million jobs lost, boom!, 200 to 1 trillion dollars in emergency social spending to deal with the collapse's impact on the region, the UAW dead and Wal-Mart the biggest employer in the region, Michigan in full economic collapse and millions of voters ripe for being in play in the next round of the Culture War.

The GOP, and the media pundits who are all clamoring for Obama and the Congress to let the auto industry die will be damning us and running against the Democratic Party as the party that 'Let Michigan Die' or 'Let Detroit Die' for a generation if the auto industry is allowed to die.

The auto industry is 4% of our GDP.

If it goes, thats several years added on to the economic crisis that we face.

And probably Bobby Jindal in 2012 running as Ronnie Reagan on a white horse to "save" America.

Event: Letter from the UAW.

This email arrived in my Inbox this morning (four days late). I pass it along in the interest of promoting a respondible loan to the Big Three through congress. Please consider writing a short letter. My thoughts and qualifications are here.

---

Dear Connor Coyne,

Please respond right away to this urgent request by calling your
Senators or Representative through this toll-free number: (877)
331-1223. Or send an e-mail:
http://www.unionvoice.org/campaign/autojobs

The auto industry needs help in Congress right away -- and if we
don't get it, the jobs and benefits of hundreds of thousands of
our active and retired members and millions of other Americans
are at risk.

Next week the House and Senate are expected to vote on
legislation to provide an emergency $25 billion bridge loan to
GM, Ford and Chrysler to help weather the current severe credit
and economic crises. Without this assistance, there is a real
danger that the three companies will run out of cash and be
forced to cease all manufacturing and business operations in the
near future.

The collapse of these companies would be devastating:

-- In addition to the hundreds of thousands of Big Three workers
who would lose their jobs, up to 3 million other workers could
see their jobs disappear at dealers, suppliers of components and
materials, and other businesses that depend on the auto
industry.

-- Almost 1 million retirees and their spouses and dependents
could suffer cuts in their pension benefits and the loss of
health insurance coverage.

-- The federal pension guarantee program could be saddled with
enormous liabilities, jeopardizing its ability to protect
benefits for millions of other workers.

-- Because of the importance of the auto industry to our entire
economy, the collapse of the Big Three auto companies would
aggravate the current recession, creating further hardships for
working families and communities across the United States.

-- Revenues to federal, state and local governments would be
sharply reduced, forcing drastic cuts in vital social services
at the time they are most needed.

Congress can prevent these devastating consequences. The federal
government has already stepped forward to provide assistance to
Wall Street and financial institutions. It is now time for
Congress to help Main Street by providing urgently needed help
for the auto companies.

You have probably seen or heard some commentators who are trying
to blame you and your fellow UAW members for the current
situation of the companies by attacking our "overly rich" wages
and benefits. We need to rebut these false charges, and make it
clear that active and retired UAW members have already made
enormous sacrifices in the 2005 and 2007 collective bargaining
agreements.

Other commentators have tried to blame the Big Three for their
current situation by saying it is attributable to their
insistence on producing "gas guzzling" vehicles. This overlooks
the major progress the companies are making in bringing forward
more fuel efficient vehicles. More importantly, it ignores the
fact that the current crisis is due to the huge drop in overall
auto sales that has been caused by the larger credit and
economic crises that have engulfed our entire nation.

Auto sales in October were a mere 10.8 million on an annualized
basis, the lowest level in 25 years. All automakers reported
steep declines in their sales. The problem is not that consumers
don't want to buy the quality products that GM, Ford and
Chrysler are making. The problem is that consumers have stopped
buying vehicles from any companies.

Please call your Representative and Senators now. Urge them to
vote for legislation to provide an immediate $25 billion bridge
loan to the Big Three auto companies. Tell them this is
essential to prevent the liquidation of these companies and
devastating consequences for millions of workers and retirees
and for our entire economy.

You can use the following toll-free number to call your
Representative and Senators: (877) 331-1223. Or send an e-mail:
http://www.unionvoice.org/campaign/autojobs

The legislation to provide assistance to the auto industry will
likely be taken up by the House and Senate sometime next week.
So please call or e-mail right away!

--------------------------------------------------

Visit the web address below to tell your friends about this.

http://www.unionvoice.org/join-forward.html?domain=Uawire&r=p1AD3mEqTS5H

If you received this message from a friend, you can sign up for
UAWire at:

http://www.unionvoice.org/Uawire/join.html?r=p1AD3mEqTS5HE

---

UPDATE: Here is the letter I sent to Jan Schakowsky, Dick Durbin, and Barack Obama.

Dear Senator Durbin and Congresswoman Schakowsky,

I know you're getting a ton of mail on this subject right now, and are well-versed in the pros and cons. I will try to be succinct.

I strongly opposed you both on your support for the Wall Street bailout because I saw it passed with what I saw as a lack of discretion. I registered protest votes due to this (something I haven't done since 1996), because I do think that congress should be penalizing any corporate interest that relies on the taxpayers to save them from bankruptsy. In practice, they are essentially holding the economy ransom to get what they need to continue.

This loan to the auto industry seems more sound to me than the other bailout. It is a much smaller amount (not that billions are anything to sneeze at), and I understand the myriad ways that the automotive industry impacts the American economy at large.

Here's the thing: you shouldn't have to write a blank check in order to help the auto industry. The Big Three have taken some steps in necessary retooling and restructuring; demand that they take more. Eliminate what fluff you can, and pass a bill with stringent requirements. You win with the Big Three for giving them breathing room. You win with the public for representing their interest. And with me, I will both happily and enthusiastically vote for you, because I expect my senators and representatives to fight for me, and I am proud when they do so.

I know that this sort of middle-road and straightforward approach is often taken off the table (and for all the wrong reasons); you cannot help the the environment in which you are debating this issue. But this is a straightforward case, and this is the most reasonable solution.

Sincerely,

Connor Coyne

Event: Bailing Out the Big Three.

---

New York Times: Congress Remains Divided on Bailout.

New York Times: Clout Has Plunged for Automakers and Union, Too.

New York Times: How Many Jobs Depend on the Big Three?

* * * * *

New York TimeS: Saving Detroit from Itself.

Paul Krugman: Cars.

* * * * *

Daily Kos: Ideas for an Auto Plan - GM Edition w/ Poll.

---

The articles above pretty effectively stake out the boundaries of my position. With possibly over three million jobs at stake, it isn't with a lot of pleasure that I watch the Big Three work the nation over now as they've worked Michigan for decades. What do I mean by work over? I mean that they draw assistance from the government (whether in terms of tax breaks, incentives, and now a bailot) to rectify a mess they've made, and in exchange for which the best they can seemingly offer is a non-worst case scenario. If that. In Flint, throughout the eighties and nineties, GM continued to drink that city's tax pool dry in infrastructural and fiscal accomodations as if they were dying of thirst at a desert oasis. And yet they persisted in the manufacturing strategy that has put them in dire straights. The cities and states which invest in these companies, essentially at gunpoint, rarely see such speculations realized. There is a risk of this being mirrored on a national level. The Big Three's market share will presumably continute to dwindle in the near-future, albeit hopefully at a slower rate, they'll close plants and hemmorage jobs, and if everyting goes perfectly, it will still be a long, long time before they can offer a fleet as well-adapted to the next global environment as their competitors.

It's just like the Wall Street Bailout all over again. These were my original reservations with that bailout package, and here is the upshot after just two months.

Let's learn a lesson from this very recent history and not be handing out blank checks.

Let's encourage our representatives to cautiously support a bailout for the auto industry, but let us absolutely insist that it only come with serious and meaningful restructuring that will lead to an industry that can legitimately compete. Symbolic shuttling of executives will not be sufficient (and the Wall Street bailout didn't even achieve that obvious step); any Company that requires taxpayer money to fight for profit is fair game for prudent meddling. It's more than auto plants that will need restructuring; it's the Big Three's entire corporate structure.

---

I wrote more on this at Daily Kos: Don't Be Flint, Michiganized by the Big Three.

Event: "We'll make 'em fit! It'll be fun!"

???

Dear Mr. Danziger,

For several years now I've openly described your work as my very favorite of political cartoonists. Your drawing has a precision that goes beyond a canny resemblance and your cutting captions can sum up an issue in better than a thousand words. Yours is a medium in which cheap shots seem to be both available and abundant, and the care which you take in your selections has always impressed me. After all, any sane critical thinker could spend eight years pummeling the Bush administration; your statements have been fresh and trenchant, and you've had ammo left over for the Democratic primaries, for Chinese domestic and foreign policy, and for all of the other misguided and tragically uninformed errrors in American politics this decade. Which is why I'm so dismayed by the lone autoworker you have exclaiming "we'll make 'em fit! It'll be fun" as he holds an oversized croquet mallet aloft this week.

I come to this personally: practically everyone in my family has worked for GM in Flint, Michigan and Oakland County. My father worked at Buick for almost 40 years before being bought out this year because the last plant in his division (Powertrain North) has closed. My aunt worked at EDS, my grandmother was a secretary at GMI, and my grandfather made spark spugs for AC Delco from the moment he got home from World War II.

Look, I know that doing what you do you are bound to anger people, that you can't be over-sensitive to anger, that calling things as they are is inevitably going to bruise some ribs along the way.

But I've always seen you as being very selective in choosing your targets, and more importantly, in choosing their foibles. In your recent piece you show an autoworker standing like an uneducated buffoon, a "Joe V6" who doesn't know a thing (and doesn't care) about anything other than banging metal on metal. Granted in the past you've called out the American automakers for their incompetent leadership, and maybe even for your perception that our domestic automakers have produced an inferior product. I have disagreed with many of these strips, but this is the first time it seems you've crossed the line.

Actually, excuse me, that's not right.

I should say, instead, that you've failed. After all, there are no lines that you should not cross. The mark of a great political cartoonist is the ability to eloquently disagree, and to render such disagreement visceral and visual to the larger public.

But why have you abandoned the rigor of your other pieces?

Why are you taking cheap shots at our autoworkers instead of their leadership or even their product?

For that matter, if you want to criticize autoworkers, why are you holding them up as mentally incapable, instead of criticizing a union that is as stubborn as it is often ineffective? Or holding accountable a rank-and-file that is often unable to look beyond their next paycheck to address the consequences of the agenda their employer is pursuing?

Why not pick a disagreement worth stating instead of promoting inaccurate misconceptions about the education and drive of our nation's most assertive and robust union workforce?

I could disagree with you on many of these other possible arguments, but these would be disagreements worth having.

Your characterization of the auto-worker in your recent strip is trite, pointless, obnoxious, insulting, and irrelevant. It does nothing to promote a worthwhile political argument, and it is a waste of both my own and your time. I wouldn't be so disappointed if not for the fact that you are my favorite political cartoonist. I hope that the abundance of material these days doesn't mean that your standards (the standards I most admire) are slipping; one could safely argue that an informed and powerful political critique in all media are more important these days than ever.

Sincerely,

Connor Coyne

Event: Thank. You.

CBS News: GM to Build $370M Plant in Flint, Michigan. Factory Will Make 4-Cylinder Engines for Chevrolet Volt.