What Happened to Buy American?

I leased a new Honda Civic last weekend. That's the model in the photo below:

It's a 2009 sedan, black, with a GPS navigation system. This is the fourth Honda my wife and I've either bought or leased. We also drive a Honda family van, which at the time of purchase was one of the first vehicles available with a DVD movie entertainment system, the perfect accessory for our boys when we take long family trips.

One of the things I always used to hear was "buy American." This, of course, was back in the 1980s and early-1990s, when U.S. automobile manufacturers were facing super-stiff competition from Japan. There were all kind of protectionist demands from Detroit, and Washington placed all kinds of tariffs and import quotas on Japanese vehicles to protect the American market. Japanese manufacturers imposed "voluntary export resraints" as well, which were tacit agreements not to export additional cars (and thus forestall more formal U.S. import barriers). When Washington placed limits on imports of smaller passenger cars, Japan built Lexuses and other luxury vehicles, and the Japanese eventually took over those sectors in quality and customer satisfaction. More recently, Toyota has been sellling full-size pickup trucks (after a long period of formal exclusion from the big truck sales here), which have cut into the market share of one of the last profititable product lines of American manufacturers. If I was in the market for a new truck, I'd probably get a Tundra.

It's not that I don't like American cars. If I had the money, or the leisure time, I'd get a Corvette. Some of the U.S.-built trucks are absolutely fabulous, and I'd feel even more all-American than I already do driving one. The question for me has always been quality. In 1980, friends drove American cars - I remember Camaros, especially - and they were always breaking down or being recalled for manufacturing defects. When dealing with the distributors, customer satisfaction took a back seat. A buddy's car was in the shop a number of times on warranty, and he had to practically bleed Chevy to pay for the repairs.

This is all off of memory, but I think those early experiences shaped my car-buying habits. I want a dependable vehicle that's not going to break down; a vehicle that gets good mielage, and a car that's hip, frankly. Hondas are cool. Lots of people drive them, and along with the Scion brand, the import sports-market and Friday-night cruising scene is dominated by them.

Perhaps this is why I haven't blogged too much about the Detroit bailout. Actually, I'm tired of bailout politics. I supported the administration's first $700 billion Wall Street bailout in September, and what did it do? Markets kept dropping and more firms and industries stuck out their hands for help from government. Unlike free-market purists, I see a real public interest in preventing a full-blown market crash. It's unknown what might have happened to the economy in the absence of government support, but the corruption we're seeing from top bailout executives, in slush funds, golden parachutes, travel expenses, etc., doesn't engender a lot of confidence that taxpayer money is being well invested. Maybe we need some genuine creative destruction in housing, finance, insurance, and other sectors of the economy before we really know what's to become of American capitalism (if we can really call it that anymore).

In any case, that brings me back to cars. The GM bailout last week collapsed over union issues, for the most part. What's fascinating is how the debate over GM has generated the classic partisan debate between Democrats and Republicans over support for the middle- and working-classes, as well as the question of whether the auto sector is as deserving of a bailout as Wall Street.

The Wall Street Journal, in fact, puts its finger on this moment in the "Crash of '08" as a chance for the GOP to stand up for its values:

Thursday's showdown marked an important political moment for the Republican Party. By refusing to write a blank check to Detroit, Senate Republicans have started to reclaim some credibility on fiscal policy and the role of government in the economy. They did so standing up to a Republican President who doesn't want any more bad headlines, as well as to Democrats who will blame the GOP if the auto makers collapse.

They also stood up for the right reasons. No bailout will ever restore the car companies to profitability without a restructuring. Yet an explicit UAW goal is to use the bailout to avoid any such thing. The union and their Democratic protectors want to avoid the discipline that a bankruptcy could impose under Chapter 11. A government-directed salvation would also give environmentalists huge leverage over the cars Detroit builds, a power they and Democrats have wanted for decades.

That does really get to the political nub of it. But if you look around the leftosphere, conservatives and the GOP are being tarred as the new "Hooverites." Chris Bowers attacks conservative ideology directly, arguing that conservatives don't care about "workplace democracy" and the concerns of "the middle-class":

The Senate Republicans who voted against the bridge loan are not acting as ideologues. Instead, they are acting rationally according to the dictates of their values system, aka ideology. They want to destroy the Great Lakes. They want to destroy the UAW. They don't care how many people get hurt or lose their jobs in bringing about those goals. They do not view these outcomes as catastrophic, and they know this will happen if the bridge loan fails. They are aware of these outcomes, and view them as desirable.

Read the whole thing to get the context (basically, leftist ideology is benevolent and conservative ideology is evil, blah, blah...).

I'm not an expert on the whole union-management debate. The big auto companies, in my opinion, have failed for a long time to offer a product that people woudn't hesitate to buy. Big labor, on the other hand, has been like a cancer on the car companies.

A couple of years back I was shaking my head when I read a story in the Wall Street Journal, "Idle Hands: Detroit's Symbol of Dysfunction: Paying Employees Not to Work." At the time, the big auto companies were paying about $2 billion a year for laid off workers to sit around all day - that is, the car companies, at union demand, paid people not to work. The piece demonstrates how UAW was essentially helped to kill its own companies.

So for me, it's both sides: The corporate bosses have failed to adapt to a changing American car culture and business environment (see, for example, "GM: Death of An American Dream"), and the unions have failed to develop a spirit of cooperation that puts company viability ahead of worker entitlement.

Meanwhile, across the American south, foreign automobile manufacturers are thriving, with higher productivity, lower costs, and greater consumer satisfaction. Look to Dixie for the future of the car business in the United States.