Commentary: Big 3 automakers spin wheels

New Orleans CityBusiness, Nov 24, 2008

Quick. How many people do you know who drive a Buick Lucerne? How about a Lincoln MKZ? Have you found yourself longing for a Pontiac Torrent?

To be fair, all are fine American-made cars but none rival the popularity of makes such as the Mustang or Malibu. And therein lies the problem for domestic automakers beyond the declining economy that has put a pinch on auto sales.

Representatives of the Big 3 -- Chrysler, Ford and General Motors -- shuffled off to Capitol Hill last week in their figurative Edsel (actually, they left town in their luxury jets) with a clear edict from lawmakers: Take a long look at the way you do business before expecting taxpayers to come to your rescue.

From consumers, the call is even louder to the American auto industry: Make cars we like and can afford.

GM has launched a grassroots counteroffensive to the shelling it took in Washington, D.C., appealing to consumers through its Web site, www.gmfactsandfiction.com.

The site points out that when an auto plant closes, it not only affects the workers at the site but also its suppliers along with the restaurants and stores that cater to the plant. GM estimates the demise of the American auto industry would cost 3 million jobs the first year and 2.5 million in the following two years.

Maybe it was drowned out by the roar of GMC Canyons rolling off the assembly line, but who said anything about shutting down the American auto industry?

Again, the message to automakers from Washington to Waggaman: Check yourself before you wreck yourself.

When most businesses close shop, it is usually because they offer a product or service that is not in demand or a result of poor business practices. And seldom does the business owner get someone else to pick up the tab for a do-over.

Automakers have painted bankruptcy as a doom and gloom scenario, but there exists a mechanism through which they can restructure more efficiently. This form of government intervention offers far more upside than the cashier's check they are seeking from Congress. It might offer a solution to the incredibly burdensome union obligations they face yet maintain working relationships with labor to retool the industry.

The U.S. auto industry can be resuscitated. The sheer will of the American work force and the ingenuity of our brightest minds can design and create vehicles that will go toe to toe with foreign makes -- many of which are assembled here in America.

The obstacle in this path appears to be on the corporate level, where management clings desperately to practices that put the industry in its current state. They're driving a Hummer in the passing lane but refusing to go faster than 45 mph.

Unfortunately, their behavior has been reinforced by an administration and Congress that's set dangerous precedents with its bailout policies, or lack thereof.

As of press deadline Thursday, a bipartisan group of U.S. senators from auto-making states had reached a compromise to provide loans to automakers.

Regardless of whether government-backed aid is in the works, tough times are ahead for the auto industry and many others. There is no bailout plan that will suddenly make us immune to the declining economy. Those that survive and thrive do so because they've reassessed their fiscal habits and adapted accordingly.

Consumers who borrow blindly and spend casually eventually pay the price. So do businesses, industries and governments.