Just four months ago, Barack Obama spoke to General Motors workers in Janesville, Wis., who build some of the world's largest sport utility vehicles: the Suburban, the Tahoe, the Yukon and the Denali. Obama addressed them the day after GM posted a loss of $38.7 billion in 2007, the largest-ever single-year loss for an American carmaker.
“But I also know how much progress you've made, how many hybrids and fuel-efficient vehicles you're churning out,” Obama said. “And I believe that if our government is there to support you and give you the assistance you need to retool and make this transition, that this plant will be here for another hundred years.”
The plant barely lasted another 100 days before GM said recently that it will close the plant and several other SUV and pickup-truck assembly plants over the next two years, slashing 8,350 jobs. “My heart goes out to the workers and families,” Obama said. “Today's news is a painful reminder not only of the challenges America faces in our global economy, but of George Bush's failed economic policies.”
Crying uncle too late
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“Today's news” is one of Obama's biggest challenges to his promise of change if he wins the presidency. In announcing the closures, GM chief executive Rick Wagoner said, “We at GM don't think this is a spike or temporary shift. We believe that it is, by and large, permanent.”
But Wagoner and his fellow executives at Ford and Chrysler did not sober up from SUVs until $4-per-gallon gas made them cry uncle. Their binge drinking of petroleum cost the American auto industry 300,000 jobs between 1999 and 2007, dropping to 820,000, according to federal statistics. GM alone has lost $54 billion since 2005.
As Asian automakers focused on smaller, fuel-efficient cars, Detroit kept feeding American delusions of unbridled power and limitless privilege. The automakers bitterly fight federal and state efforts toward stringent standards for fuel efficiency and emissions. They keep trying to fit the round peg of fuel efficiency in a square hole of “smaller” Hummers and hybrid Tahoes and Yukons. Two years ago, GM offered to reimburse some new car buyers for any gasoline they purchased over $1.99 a gallon.
In 2005, G.M. vice chairman Bob Lutz boasted that he and Wagoner were putting their resources “where we've got positive momentum, which is basically … Cadillac, Hummer, and GMC.” Later that year, Lutz voiced confidence that the slumping SUV market would rebound because, “I'm betting we're going to see regular under $2 a gallon again.” This winter, Lutz went so far as to call global warming, of which SUVs have become America's symbol of denial, “a crock of (expletive deleted).”
Visionless and addicted
The lack of American vision was made complete last month as Asian automakers outsold Detroit for the first time in history.
This is an addiction Obama cannot blame on Bush alone. He has many a Democrat to wean out of the mid-20th century as 13 of the top 20 congressional recipients of 2008 election campaign contributions from the automakers are Democrats, according to the Center for Responsive Politics. Obama will have to simultaneously prod both executives and union workers to a new small-is-good vision in battleground Midwestern states. Obama won only one of those states, Wisconsin, in the primaries.
It is not yet clear what Obama's own vision is. He took a bold first step last year of chastising U.S. automakers in front of the Detroit Economic Club. Since then, it has been more like Janesville, telling workers that with the right planning, their SUV plant will be here in 2108. The announced closure of the Janesville plant shows that even for the oratorically gifted Obama, his rhetoric is already behind the reality. It is too late to merely retool. The U.S. auto industry looms as his biggest domestic overhaul.