Bailing Out the Auto Industry Now?

When the government decided to give $700 billion to the failing bank industry, I kept quiet. I'm a big believer in keeping my mouth shut unless I have something valuable to contribute to a discussion. I know zero about banking and finance, and my little brain can scarcely comprehend how much money $700 billion actually is.

But like many of you, I drive. In L.A., you pretty much have to drive. So when I heard that Bailout 2: the Sequel had the American auto industry in mind, it got me to thinking. Like you, I've seen the news for the last few years. I've seen the reports of Ford, GM and Chrysler losing money, closing plants, and laying off their workers. Michael Moore started out with a documentary called "Roger and Me", which I recommend watching if you haven't already.

In the United States, people are more likely to be driving a Honda or a Toyota than a Ford or Chevy. Why is this? Simple. They are better values. We are capitalists, which means we don't believe in pissing hard-earned money away, even for patriotic reasons. We're not rich, and when we buy a car we take three basic things into consideration: initial cost (sticker price), gas mileage, and maintenance costs. Whichever car best suits our needs both in practical and financial terms is the one we typically choose. The final truth there is this: Honda's and Toyota's are comparably priced, get better gas mileage, and are less likely to break down that their American counterparts. My Honda has about 175,000 miles on it, and apart from some dings and dents, runs like a champ. It still gets about 25 miles per gallon, which is better than a lot of new cars. When the time comes to replace it, you can believe I will be looking at Honda's and Toyota's first.

Back in the early 1980's when Chrysler was on the ropes, Lee Iaccoca was made chairman. He pretty much rebuilt the company back into relevance. One of the ways he did this was with the "K Car". For those of you too young to remember the K Car, it was this boxy little sedan, nothing particularly gorgeous, but not ugly either: it looked typical for cars of that era. It ran about average, looked about average, and didn't stand out in any particular way except one: it got 41 miles per gallon highway. This was unheard of, at least for American cars. In those days, if you wanted a gas sipper, you bought Japanese. The car sold like crazy, to people eager to "buy American" but anxious to get a bargain at the pumps.

To the best of my knowledge, none of the Big Three has come out with a car since that gets 41 mpg highway. And that's a shame, because gas has only gotten more expensive. I've often wondered if there isn't some arrangement with the American automakers and the gas companies. But that's another paranoid rant for another day.

It should also be mentioned that Ford makes car models specifically for the European market that get considerably better gas mileage. The rationale here is that Europeans pay a lot more for their gasoline then Americans do, so for Ford to remain competitive they have to market cars to the Europeans that address this. That's sweet and all, but it raises two points in my mind: first, Americans are paying been paying much higher prices for gas lately. Secondly, whatever happened to root, root, root for the home team? I hate to tug at Ford's patriotic heartstrings, but why are they showing love to the Europeans by giving them better cars, and then asking our government to bail them out? Dude, go ask the EU, since you seem to give them better cars anyway.

The only thing that is going to save the American car makers is innovation. For too long, they have sold us those towering SUV's. Unsafe, way too big and wasteful with gas, they represent their owners here in America. We too are unsafe - we're now fighting "pre-emptive" wars in countries based on dubious (and what turned out to be bad) intelligence. We're way too big for our britches - we go around acting like the world's police and unofficial hall monitor, assured of our moral superiority as we waterboard hapless saps from third world countries. And we're gas hogs - we produce 3% of the world's petroleum while we consume 25%. Cars like the Humvee have come to symbolize America's simultaneous overblown sense of entitlement and need to assert itself in the faces of everyone else.

I propose that if the automakers here in America want to wet their beaks at the nation's tax coffers, that it come with a list of conditions that reflect our needs.

• First off, don't bother making cars that get anything less than 25 miles per gallon. That eliminates a big chunk of the fleet, and I say good riddance. It's not the size of the vehicle that I find distasteful - it's what it represents - the notion that we assert our dominance through our vehicles, that we have an endless supply of gasoline, that we need not concern ourselves with pollution, leave that for the tree-huggers.
• Second - hybrids. Here's a thought. If Americans don't want to drive a Prius because the shape of it is a little too much of a departure, fine. Let's do this - we'll make hybrid versions of all existing American car models. Hybrid Mustangs, hybrid Corvettes, hybrid Ford pickup trucks. We've already seen how Cadillac is coming out with a hybrid Escalade, and Chevrolet has a hybrid Malibu. Good for you, guys. Now follow it through to its conclusion.
• Also, as a thank-you to the taxpayers that allowed their hard-earned money to bail you out, you will give standard ten-year warranties on all models sold in the States. We're not going to be nickel and dimed to death with crappy cars after we kept you afloat.
• And finally, every gas-sipping EuroFord and EuroGM car currently tooling its way up and down the Autobahn will be made available to Americans within twelve months. Retrofitting all those shut-down plants in places like Flint Michigan will not only create jobs in the short run, but it will create a sustainable future for American carmakers. If it was innovation that made us #1 back in the day, it will be innovation that saves us.

Think of it this way: the Day of the Humvee is done. Now we enter the Day of the Economy Car. You already make them, and make them well, from what I hear. Now you're going to retrofit all those Yukon XL and Humvee assembly lines around the world to make cars we really need. We'll figure out how to haul our soccer practice gear around in smaller cars, and you'll realize the basics of the free market: if you make stuff people can't afford and don't need, you're going to go out of business. If you make cars we need and can afford, you'll never have to ask anyone for a handout again.