What is an American Auto Company?
I see in the morning New York Times that the US government has approved the sale of most of Chrysler to Fiat. and that the bankruptcy judge has denied a claim of creditors that liquidation of the company, among other things, might yield greater value. The last time I checked, Fiat is an Italian auto maker. So we are not exactly saving an American auto company. What then are we saving?
Jobs, of course. I do not oppose this but we do need to be clear about what is going on. Had anyone suggested that we should be alert to the needs of Toyota, Honda, Nissan and Hyundai, all building cars in the USA and all suffering cutbacks, I suspect that the American people would have raised holy hell. However, the moment Chrysler and Fiat executives sign on the dotted line, Chrysler will join Toyota, Honda, Nissan and Hyundai and cease to be an American auto company.
There is another way of looking at this and that is to see any auto company building cars in the USA as an American auto company. They do hire American workers and, we hope, pay taxes here. The only downside is that should the world go to hell in a hand basket and we need the auto companies to start making tanks and other military vehicles, will these foreign owned companies agree to do this? There are complicating factors, less with Fiat than the Asian companies, and one is that we might be fighting China and China may threaten Japan and Korea should they in any way assist us. This war is very unlikely. More to the point, we could just nationalize the companies. In such a circumstances, there could be no blow back from Korea or Japan.
There are going to be some major benefits from Fiat ownership of Chrysler. The first is that there will be Americans working in the auto plants. Second, any technology Fiat has that is superior to what Chrysler had will surely be employed in the Chrysler plants. This technology will become de facto American technology. Third, any skills the American workers acquire will reside in the brains of these American workers. Should a set of American investors want to recapture Chrysler, they would acquire workers who are more skilled than before who are using more advanced technology.
You say, "But the profits will flow to Italy." I reply, "Who cares since American capital and jobs have been flowing out of the country for years and Italian capital will, in fact, be used to rehabilitate Chrysler's plants." In the 60's a couple of leftist friends trying to convert me to their way of thinking argued that nasty American companies were creating factories or buying farms in Latin American countries and rather than plowing the profits back into enterprises that benefit the people of these countries, these American companies were bring it back here. Moreover, we paid the people there a pittance. This is an hellaciously bad argument. First, note that American capital had already flowed into these foreign countries by way of building the factories or clearing the land and planting banana trees or whatever and these efforts employed people there. Second the businesses themselves employed people. Did they pay as much as they should have? "No," let's say, but when have any companies anywhere been any more generous to their employees than they had to?
As for acts of benevolence by foreigners owning companies here, I draw attention to this NY Times report last December:
workers at the Toyota Tundra truck factory here are taking classes: how to handle tools safely, how to get along better with colleagues of varying backgrounds. Some have even cleaned local parks and fed the hungry while Toyota paychecks.I suggest that when we refer to American auto companies, we cease to refer to just those owned by Americans and include Fiat and the Asian companies mentioned earlier. What matters most is not who owns the company but the fact that it is that Americans who are being employed and that we are receiving taxes (I presume) from all cconcerned.
Labels: Asian auto companies, Chrysler, Fiat

