Commentary: Autos and our future

Jan 4, 2013

We got what looked like good news for the auto industry yesterday. Americans bought fourteen and a half million new vehicles last year -- nearly two million more than the year before.

True, that’s still considerably below total sales five years ago, before the Great Recession nearly put Chrysler and General Motors out of business forever. But still, it is progress. Except that those figures mask something troubling.

More cars were sold, but the Detroit three continue to lose market share. 50 years ago, in discussions about the auto industry nobody ever talked about foreign vs. domestic market share.

The entire industry was domestic, except for a few Volkswagen beetles and the odd Beatnik with a Saab. Today, nobody talks about the Big Three anymore, mainly for the reason that they aren’t. . . they aren’t that big.

Two years ago, the Detroit three had just under forty-seven percent of the market. Not the world market, the domestic market. Last year that fell to just over forty-four percent.  That means that of every nine vehicles sold in the United States, only four were made by Ford, GM or Chrysler. That still seems hard to believe.

What’s more, the fastest-growing part of the domestic auto industry last year wasn’t really even an American company anymore. Chrysler sales were up ten percent.

But a majority of Chrysler is owned by the Italian automaker Fiat. Our government can hardly complain about that; Washington more or less forced Chrysler to sell itself to Fiat four years ago, when its only alternative would have been extinction.

Now none of what I’ve been saying is meant to whip up xenophobia. The era when enraged Detroiters vandalized foreign vehicles is long past. Today’s consumer might have a hard time saying what is or isn’t a foreign car.

Is a Honda Accord manufactured in Ohio any more foreign than a Chevrolet full of Mexican-made parts? If an Italian automaker owns Chrysler, what does that make Jeep?

Today, most newly hired blue collar workers at the Detroit Three are paid less than auto workers at non-union transplant factories in other states. What does that say about labor in general, the United Auto Workers union in particular, and the auto industry’s future? I’m not sure we know, though we do know that we need to reinvent Michigan’s economy, Autos are never again going to do it alone.

Forty-eight years ago tonight, a President of the United States gave a famous state of the union speech in which he talked about America’s problems. Later, in a commencement speech at the University of Michigan, he fleshed out his ideas, saying that too many people didn’t have decent jobs and too few were getting the education they needed to compete, and we needed new answers.

“The solution to these problems does not rest on a massive program in Washington, not on the strained resources of local authority,” but on all of us working together to do it ourselves, he said. That president was not Barack Obama, but Lyndon Johnson.

His ideal was something he called the Great Society. That slogan is often ridiculed today. But you might find it interesting to re-read that speech. It has some insights worth thinking about.