U.S. auto industry isn't just Big Three
Detroit automakers say they need help before they crash. Kai Ryssdal talks about the rest of the industry with Micheline Maynard of The New York Times.
Finished Honda Odysseys are ready to drive off the assembly line in Lincoln, Ala. (Brian Schoenhals/Getty Images)
More on The Economy, Auto Industry, Fed. Budget/Govt. Spending, America's Financial Crisis
TEXT OF INTERVIEW
Kai Ryssdal: All right, on to bailout fallout Part 2. Today was a long day of hearings on Capitol Hill. The afternoon session convened in front of the Senate Banking Committee. Alan Mulally from Ford, Bob Nardelli from Chrysler, Rick Wagoner from GM and Ron Gettlefinger, the head of the United Auto Workers were at the witness table. All four were trying to make the case that the auto industry, at least the Detroit part of it, needs help and it needs it now. Micheline Maynard covers Detroit for the New York Times. Micki, good to talk to you again.
Micheline Maynard: Thank you, Kai.
Ryssdal: You know there are a lot of car plants in this country not run by Ford, GM or Chrysler. So, if one of the Big Three does wind up shutting down, is there a chance that those foreign carmakers that make cars here in this country could pick up the slack?
Maynard: I think that they could pick up a little bit of the slack. The plants that are run by Toyota, Honda, Nissan, actually have some extra capacity. The plant that Toyota has done in San Antonio, Texas, for example has actually been closed because they were making too many pickup trucks.
Ryssdal: OK, so that's on the production side. They could make the cars and get them to market. What about the people that Detroit would inevitably have to lay off?
Maynard: That's a touchier subject because not only did the car companies pick the states where they wanted to be, they hand-picked the workers as well. And nobody will say we deliberately picked workers that were against joining unions, but nobody has unionized any of those plants. So, I think it would be an uphill battle for somebody who was a union member at a Detroit plant to go down south and try to get a job at one of those non-union plants.
Ryssdal: Let me just throw a parenthetical question in here. Since we are buying less cars in this country, that means we need to sell less cars. So even if there is a bailout, Detroit is going to be smaller, there are going to be layoffs.
Maynard: That's absolutely true. Dealers go out of business day by day by day just because of the economic crunch. And two years ago, the automakers sold about 17 million cars, it looks like they'll sell about 14 million this year. And it's possible that that will drop to about 12 million next year. So, as everything goes down, everything shrinks as well.
Ryssdal: Let me pick up on that point you made about dealers. As Ford and GM and Chrysler stop selling cars, and their dealerships inevitably go out of business, are we going to see on those big auto mall streets that we have all over this country, expanded Toyota and Honda dealerships?
Maynard: I don't think so. You know General Motors, I believe, has about 6,000 dealers in the United States and Toyota only has 1,300 if you include Lexus. Their goal is not to add more dealerships, their goal is to have more sales per dealership. That keeps everybody in the dealerships happy. They're making money. They would just as soon keep the dealerships at the same number they'd just like more business in them.
Ryssdal: So, what's your gut telling you, Micki? Is there going to be a bailout, first of all, and if that does not come then what happens?
Maynard: I don't think there's going to be a bailout in this round. I think it's very possible that when President Obama is in office that they'll give it anther try. What'll happen between now and then are going to be some very difficult choices for the Detroit car companies. They may try to hang on until they have the hope of another shot at a bailout, or they may have to go ahead and look at some kind of a reorganization either inside bankruptcy protection or outside of it.
Ryssdal: And would that necessarily be a terrible option?
Maynard: It's a very painful option. But I've covered six bankruptcies in the airline industry and many of those airlines came out even stronger and leaner than they were before. It's not an easy thing for workers to face, but on the other hand, jobs are preserved and companies have a little bit brighter future.
Ryssdal: Micheline Maynard covers Detroit for the New York Times. Thanks Micki.
Maynard: My pleasure.
Comments
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From Phoenix, AZ, 11/18/2008
Instead of giving the auto companies a bailout, the government should consider offering contracts for the development and construction of fuel efficient and alternate energy vehicles for government fleets. The technology developed could then be applied in the consumer market, allowing vehicles of this type to be viable alternatives to conventional cars and trucks.
Besides the obvious benefits of keeping the automotive jobs and our countries manufacturing capabilities, consumers would eventually benefit from being given affordable options.
11/18/2008
I am against a bailout directly to the car companies. Companies are responisble for opressing workers earnings, making them less able to purchase products. So they take out loans but eventually that fails too and the economy falters. The economy would be stable and growing if the billions of workers around the world had more income. I am not suggesting another stimulus package from our government because it is a worldwide issue. Governments should help ensure people are compensated properly. Rather, the companies should swallow their greed and give away product (tax free) to sort of "prime the economic pump", starting with the lower income families. Yes, cars, TVs, furniture, computers...etc. Each recipient family should then give old product to charity (no deduction). Isn't it time we started doing something about oppression.
From east windsor, NJ, 11/18/2008
Why the three major US auto makers aren't asking to be bailouted not by the US government but by the big US oil companies that during all these years benefitted, and it are still benefiting from the unwise production strategy and the high milage cost model lines produced by the Detroit "intellighenzia". At the end and once againa the big oil companies are the ones that are going to get most out of the saving of US auto industry.
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