Big 3 stumbled, but all woes are not of their own making

Congress was right to give the Big Three auto executives a second chance to make their case for a bridge loan. After their counterproductive performance last month on Capitol Hill, the Big Three automakers have now submitted their turnaround plans to Congress, as instructed.

In these plans, we see just how dire the situation is —with insolvency possible for GM and Chrysler by year’s end unless they receive immediate loans — but we also see a path forward, with rapid development of clean-energy vehicles and serious restructuring to reduce operating costs.

Now it’s Congress’s turn to act by approving a conditional bridge-loan program for the automakers.

Otherwise, the very survival of domestic manufacturing is at stake, along with millions of middle-class jobs.

The Big Three have many self-inflicted wounds. But these sins are no graver than Wall Street’s transgressions, which were largely ignored by Congress as it rushed to pass a rescue package for the financial sector.

There are many factors beyond the control of the companies and workforce. At the top of the list is the yearlong recession. Demand for cars has dropped through the floor — an across-the-board 35 percent decline in sales last month alone.

Next, America’s trade policy has opened our doors to imported automobiles, while massive state incentives have allowed European and Asian carmakers to set up shop here. But overseas markets — particularly in Japan and South Korea — remain mostly closed to the Big Three.

Finally, America’s healthcare system has, somewhat perversely, penalized the Big Three for providing decent healthcare benefits to its active workers and retirees. Most Big Three competitors either don’t face the same retiree burden or they operate overseas under a national healthcare system.

The consequences of inaction are great. Our middle class will shrink, as millions of manufacturing and allied jobs up and down the supply chain disappear. Communities will grow weaker, as demands on social services increase while local tax revenues decrease. Our nation will become less secure, as thousand of manufacturers, who also make up our defense industrial base, close down. The recession will be prolonged, as unemployment rises and our industrial output dramatically declines.

A bridge loan for the Big Three should be conditional. One such condition that deserves more consideration is the maintenance of the domestic supply chain, where millions of jobs are at risk if the Big Three choose to outsource from low-wage export platforms as a competitive strategy. Also, the weight of the concessions should not fall on the hard-working blue-collar employees of the Big Three who have given back wage and benefit concessions twice since 2005, and are prepared to give back more this month.

A collapse of the Big Three would affect every American. Now’s the time for Congress to act, unless it has decided that America can survive without manufacturing.

Washington

 

Cabinet, legislation may threaten race relations

From Yeh Ling-Ling, executive director, Diversity Alliance for a Sustainable America

As a naturalized citizen who used to prepare amnesty and other immigration applications, I was outraged reading your article “Hispanic leaders pitch Obama on Cabinet choices” (Dec. 2). Appointments based on candidates’ racial and ethnic backgrounds will result in deep resentment. Racial politics should not happen in our multi-racial/multi-ethnic nation.

If Congress adopts “comprehensive immigration reform”  — amnesty and “guest worker” visas — we can expect 120 million more people to the U.S. over the next 20 years — U.S.- and foreign-born relatives of amnestied people and “guest workers.” Most will need jobs! Competition for jobs and other scarce resources, in addition to conflicts over political appointments, will only strain race relations and further sink the U.S., especially during this severe recession because over 10 million Americans, including Asians and Latinos, are out of work.

 A mass-immigration moratorium is long overdue.

Oakland, Calif.