It now looks as though the three American auto companies may get at least some financial help from Congress, but there's a cruel irony in their having to ask the very people who are partly responsible for the way things are.
It has become customary in some quarters to blame the car companies for being dinosaurs that did not want to change, and for the United Auto Workers for being too aggressive in securing money and benefits for union members.
The critics sound as if it is a crime for unions to do the best they can for the people who pay their dues. But collective bargaining goes on within a framework of federal laws, and if the result puts big enterprises at risk of going under, maybe the people who make the laws should take a look and see how the laws might be improved.
In part the Big Three are said to be suffering now because some of the vehicles they made, in response to market demands, were using fuel at such a rate that they became hard to sell when gas shot up in price last summer. Congress had a role in that development, mainly by failing to foresee the problem and then not doing something about it when it had the chance.
A higher federal fuel tax early on - years ago - might have raised revenue to keep up the highway system. When the price of oil spiked, as it was sure to do with limited supply and increased demand from fast-growing economies like India and China, the tax could have been lowered to absorb some of the shock.
In a more strategic sense, Congress failed completely to make sure the country had a sufficient domestic supply of the fuel on which the economy runs.
Congress also is at least partly to blame for the financial crisis that now has dried up credit, the credit that car companies need to finance their operations. This has spilled over to the perception - largely false, according to local institutions - that consumer credit to buy cars is also hard to get.
As the latest reports made clear, the Big Three are far from the only car companies that suffered sales declines. Others including the U.S. branches of foreign-owned firms are in the same boat. And in Germany for instance, Opel had to go to the government asking for assistance even though its cars are nothing like the U.S. models of its GM parent. This demolishes the notion that if only the Big Three had built cars like the others, they would be fine.
As for the finance crisis itself, the behavior of Congress in regard to federal spending and debt helped create a climate of widespread acceptance for a traditionally unacceptable level of debt. And this in turn removed the stigma that used to discourage too much debt in private life, another cause of the current troubles.
The car companies need help right now to prevent a collapse. If there was more time, they should instead demand that Congress fix its own mistakes first. (hh)
Posted in Opinion on Tuesday, December 9, 2008 12:00 am Updated: 12:19 am.
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