Does anyone in Washington care what’s happening to the Big Two these days? As GM and Ford announce the closure of plants and the elimination of thousands of jobs, it seems that with rare exception—New York Senator Hillary Rodham Clinton, prepping for a presidential bid; the Michigan Congressional delegation for obvious reasons—no one on the Potomac seems to give a rip. President Bush and his economic team, as well as others, shrug their collective shoulders and point out that Toyota, Nissan, Hyundai, and Kia have made recent investments in the country, and therefore are picking up the slack from Detroit—that’s how capitalism works. Yes, that may be how it works, but those investments are but a drop in the proverbial bucket as compared with what GM and Ford have plowed into people, plant, and equipment in the U.S.
The woes of Motown aren’t limited to the factories and the office buildings that carry the carmakers’ logos. Take advertising, for example. GM is the world’s largest advertiser, spending more than $3 billion in 2004, according to TNS Media Intelligence. What if GM was to fold? There would be a whole lot of portfolio-clutching creative types on Madison Avenues across the land looking for new gigs.
Silicon Valley-related firms are often cited as the sorts of companies that will be the future, not cars. But GM has announced that it intends to spend billions (yes, it still has money, despite what some would lead you to believe) on information-technology related infrastructure in the coming years. Not surprisingly, this has led IBM, Microsoft, and other companies to come courting at the RenCen. What happens if those billions disappear into a bankruptcy court?
The simple fact is our nation needs to pay attention to what’s happening to our auto industry and move quickly to stave off any further erosion of jobs or the fallout will be devastating. No, I am not calling for our nation’s leaders to write a check to bail out the debt carried by many of these companies and the chieftains of the industry also deny they are trying to get the politicos to bail them out. What has to happen is for the Administration to call for an immediate summit with the CEOs of Ford, GM and Chrysler, along with key suppliers, to see what our nation has to do to put our auto industry on an even playing field with the rest of the world. But beyond talking about the issues around a table, demands must be placed on the participants to deliver results by a set timeframe with concrete targets.
Sure, not all of the problems in the industry rest on the steps on Congress or the desk of the Oval Office, but it’s time our leaders showed leadership. Likewise, those in politics need to ask the hard questions of those at the top of the industry: Why are you not producing products people want to buy? It’s time for some frank discussion and action.