Washington Must Help Domestic Automakers Climb Back to Success

Feb 18, 2009 Issues: Economy

The domestic auto industry is the backbone of our industrial base, supporting 5 million jobs. It helped create the middle class, provides health care for 2 million Americans and supports 800,000 retirees.

General Motors and Chrysler are submitting comprehensive restructuring plans under the terms of their federal loans, but change has been underway for years. In the last three years, GM has reduced structural costs by 23%, reduced production capacity by 24% and workers by 47%.

The United Auto Workers has already agreed to major wage reductions and relieved the company of 50% of retiree health care liabilities. The global financial crisis and recession have battered every automaker in every industrialized country, and each one, including the U.S., has responded to preserve the backbone of its industrial base.

All of the stakeholders — company executives, bondholders, workers and retirees — must be part of the solution presented in the advanced restructuring plans.

The federal government must also be a full partner. We must do so with a pride in the legacy of a 100-year industry that is a part of the fabric of our nation. The story has been told hundreds of times in my home state. Parents worked in the factory, they joined the middle class, built a family home and saved to provide a better future for their kids. I have met hundreds of UAW kids who were the first in their family to go to college.

The federal government should approach this partnership with a sense of responsibility. It never invested in national health care, so companies had to shoulder that burden, adding almost $1,500 to the price of each vehicle. And, while other countries invested in advanced technologies, our government stood on the sidelines.

The way for taxpayers to earn a return on our investment is to help the industry climb back to success rather than be pushed into bankruptcy and failure.

Just this week, my brother, Sen. Carl Levin, and I visited the engineers designing the Chevy Volt, the electric GM vehicle set to hit showrooms in 2010. There is an exciting future for the domestic auto industry, one that can help end our dependence on foreign oil, make us the leader again in advanced technologies and keep generating good jobs.