LETTER: Obama administration deserves credit for handling of auto crisis
I’ve never been an admirer of Obama’s economic policies.
However, looking back, and comparing with the alternatives, the Obama administration deserves credit for its handling of the 2009 automotive crisis.
In one big swoop, the administration moved in, forcing General Motors and Chrysler into Chapter Eleven bankruptcy closed unprofitable plants, and slashed jobs, wages and benefits.
Ford Motor Company followed in their wake. Out of the smoky ruins emerged the world’s most competitive automotive industry.
Stop for a second and compare that with a dwindling and highly unprofitable car industry in Europe. In line with good socialistic ideology, the governments of France, Italy and Germany are prioritizing jobs over profitability with the inevitable result that Europe is stuck with an automotive sector in steep decline, followed by massive losses of jobs.
Forty percent of European assembly plants are operating in the red, costing their owners billions of dollars in losses.
It is assumed that any plant operating below 70 percent of capacity looses money.
Even worse, carmakers are not investing in new plants and new equipment in Western Europe, and probably never will.
The good news is that European automotive workers earn $60 per hour, including benefits compared with $38 per hour in the US.
The bad news is that the $60 per hour jobs are disappearing fast.
Not willing to face economic reality and do what’s necessary, the European governments are turning a blind eye, allowing the situation to get worse by the day.
As a matter of fact, these governments do not allow carmakers to close unprofitable plants.
Even governments, as you may have noticed, can’t hide from the economic reality of globalization. A few years ago, who would have thought that BMWs and Mercedes would be made in the United States and that 70 percent of all BMWs and Mercedes made here would be exported to markets that would otherwise have been served by BMW and Mercedes plants in Germany?
Not me and certainly not the European unions!
Karsten Malmos
