Big Three bailout pursuit a rejection of capitalism

(Originally published 11/22/08)

The CEOs of the Big Three automakers and the president of the United Auto Workers are painting a Doomsday scenario similar to what financial leaders told Congress ahead of the first bailout fight back in September: Unmitigated disaster looms if Congress doesn’t fork over another $25 billion (or more).

(The Big Three have already gotten $25 billion from the federal government for research and development this year.)

I’m curious: Do the Big Three and the UAW chief also support a bailout for the newspaper industry? Journalism is the only constitutionally protected profession in this country. How about the construction industry? The contractors, their subs and suppliers comprise many more jobs than the Big Three. What about real estate professionals? They are completely at the mercy of the market.

These are national industries. The Big Three is mostly a regional industry.

But there is no bailout talk for journalism, construction or real estate.

Their job losses are just as painful. So why should UAW jobs be insulated from the economic downturn and protected above and beyond other jobs?

Complicating the Big Three’s quest for bailout is the relatively new auto industry in the South.

At a news conference Thursday, UAW president Ron Gettelfinger took potshots at Southern success – specifically, Alabama’s Mercedes, Hyundai and Toyota operations:

“We can help the financial industry and give incentives to let foreign automakers compete against us,” Gettelfinger said. “But at the same time, we’re able to walk away from the industry that is the backbone of our economy.”

No.

One, whatever incentives Alabama has offered any business – foreign or domestic – to locate here have been Alabama’s choice and sacrifice. No one from Montgomery went to Washington and begged federal lawmakers to pave the way. If Gettelfinger wants to compare Alabama’s state incentives with the Big Three’s bailout request, then he should be rapping on Michigan Gov. Jennifer Granholm’s door.

Two, Alabama’s incentives total a fraction of the billions Gettelfinger and the Big Three seek.

Three, Alabama’s incentives have created new American jobs in a new industry and spawned new suppliers that employ American workers in just the past 15 years. The Big Three, by contrast, have been in business for a combined 288 years. Shouldn’t the more established automakers be better equipped to weather the downturn?

Finally, and most disturbingly, why does Gettelfinger believe that Alabamians and Georgians and Tennesseans are somehow less entitled to jobs in the auto industry than Michiganders or Ohioans or Indianans or Pennsylvanians? I know the answer to this, and you probably do, too. I just wish he would admit it.

A compromise might allow the Big Three more latitude with the R&D money it secured earlier this year. And they can always file for bankruptcy, reorganize and return stronger – like regular Americans do with their businesses every day.

No company is "too big to fail." Every company can fail, just as every company can succeed. That’s the hazard, and the promise, of capitalism.

But the Big Three CEOs and Gettelfinger need to ask themselves: If they happily enjoy their profits but refuse to take responsibility for their failures, are they even capitalists anymore?