As we slide into the holiday season, several industries have their hands out like a bunch of Salvation Army bell-ringers.
Like many, I’m disinclined to toss coins into the auto industry pot. Why throw good money after bad decisions?
Here’s why we should: An additional loan right now could save the industry and its millions of jobs until 2010, and that timing is key. If we think only in the short-term, helping Detroit seems a waste of money. Yet think of 2010, and you’ll see something else – opportunity.
According to Chris Isidore at CNNMoney.com, “Billions of dollars in annual savings won in the 2007 labor agreement with the United Auto Workers union kick-in that year, including shifting the responsibility for retirees’ health care costs to union-controlled trust funds.”
Moreover, 2010 is the year most experts predict that the plug-in hybrid technology will be ready for market. Do we really want to let General Motors, Chrysler and Ford collapse right when they can be part of this vanguard?
In addition, Gen. Wesley Clark, former supreme allied commander of NATO, points out that, like the improvements in armored fighting vehicles in Iraq, future automotive innovations will have crucial military applications.
It’s essential to our national security, he explains, that a “vibrant car industry” remains in the United States.
Don’t get me wrong. Right now, Detroit is like an annoying relative I’m seldom pleased to hear from, in dire need of rehab. Yet I’m not ready to kick the Big Three out of the family just yet with so many factors to consider.
Sure, part of me would rather see them go bankrupt than hit up Uncle Sam for a loan, but the likelihood of the Big Three rising from those ashes is slim. Meanwhile, the government – that would be you and me – will wind up with retirees’ pension and health care obligations anyway.
There’s clearly no perfect solution here, but perilous times call for taking the long view and finding opportunities in chaos.
Through a contingency-laden loan, we buy Detroit two more years, one last opportunity to join the technological and environmental leaders in this industry.
If Motown manages to succeed after an extreme makeover, we all benefit. And if not? Then let it be just another Circuit City.