Wednesday, May 06, 2009

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.

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Blogger Rita said...

This is off topic but I'm curious, have you ever posted anything about "the silent majority"?

Another thing... I've been following your blog in different guises for about 5 years now. Even though we've called each other names in the past, you've really helped me move foreword, mostly because you don't take any shit. I've worked through most of my issues w/academia types. What do you feel like you've gained by blogging on the net?

1:42 PM

Blogger Unknown said...

Can you change the red band? It's way too bright. Please. Interesting blog.

12:56 PM

Blogger concerned citizen said...

I think language guy has passed away. Please comment?

5:39 PM

Blogger The Language Guy said...

Actually not dead yet. I will soon turn 72 and have a clogged carotid (hope they can get a stent in this time), sleep apnea not under real control but not dangerous really, serious butt pain when sitting, high blood pressure, etc. I think the fact that I have blogged on damn near everything and Obama's election soothed my savaged breast has resulted in a lack of blogging zeal. Nice to year from you, however.

7:20 PM

Blogger Mrs. Geezerette said...

I am glad to find out that Language Guy is still with us. I, too, was afraid he had passed on.

9:33 PM

Blogger The Language Guy said...

Still kicking but with many ailments -- butt pain and sleep issues. As long as my granddaughter is a treat life is good. Its amazing what an energetic always happy kid can do to one's spirits.

8:28 AM

Blogger Mrs. Geezerette said...

Sorry about your many ailments. These things happen, unfortunately, as we get older.

I'm glad you are enjoying your granddaughter. Imagine if you had fifteen grandchildren close by like I do and how high your spirits would be then. They are sweethearts for sure.

9:58 PM

Blogger concerned citizen said...

AKA l>t, rita, concerned citizen...

LG, 72 is not old. I miss you. You could still teach me lots of stuff. Do you know I work for a newspaper now? I'm not doing too badly, either. Are you surprised about that? :)

1:27 AM

Blogger The Language Guy said...

Is 73 old?

I am not surprised you are working for a newspaper since you have always shown a great deal of curiosity.

8:23 AM

Blogger Rita said...

Is 73 old? They say you are as old as you feel. You aren't as old as my mother, but she was already old when she had me :)
Age has its relativity issues, you know.

11:24 PM

Blogger The Language Guy said...

As it turns out, I am only 71. How I managed to compute that I am 73 is a total mystery to me.

10:18 AM

Blogger Rita said...

It's the relativity thing.
It's the difference between what is clearly defined & what runs or blends together.

12:00 AM

Blogger Rita said...

BTW...are you ever going to post anything ever again???

8:58 PM

Blogger Mrs. Geezerette said...

I don't know how long ago this exchange took place, but I would like to leave you a few of my thoughts.

Look, LG, I will turn 70 next June and I am here to tell you that these calendar years are a bunch of hooey. I refuse to give in to them. I have decided that I am ageless. How about you do the same and get back to writing things on your blog at least once in a while...maybe once a month. It's been nearly seven months since your last post. That's way too long.

Rita and I miss you. You always had good stuff at this blog. You used to be the topic of conversation often at my dinner table when you were writing on a regular basis.

I'll be checking here to see if you have returned.

11:16 PM


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