A contentious Christmas in Washington state | NevadaAppeal.com

A contentious Christmas in Washington state

Robert Cutts
Special to the Appeal

Long ago, I was a journalist covering the Japanese auto industry (and by extension, the overseas operations of the Detroit Big Three). And I think I saw there why we Americans must keep our auto industry rolling, even with tax dollars, along the rough road ahead.

The Japanese carmakers were then yielding to Washington’s complaints over their huge auto and truck export blitz to the U.S. by agreeing to build factories (“transplants”) in America, proving they could compete using  American workers.

But cars are, of course, made with thousands of parts from hundreds of separate manufacturers. And one state, with its own trade promotion office in Tokyo, hit on the idea of luring the partsmakers themselves to build American factories, to supply the mother car companies.

To list all makers who might be candidates, they stripped an office wall and covered it with flow charts, from little companies to bigger, sticking a Post-It with a firm name at whichever junction it supplied critical parts to the process.

They had to quit, however, when over 1,000 Post-Its filled all their wall space.

It’s just like that with American carmakers: Everything from air conditioners to light bulbs are procured from independent U.S. partsmakers, under contract. So really, there are many thousand of other American workers whose jobs depend on building American cars in America. Tens of thousands, perhaps ” it’s hard to know how many.

Now, if you could figure out how all these workers spend their income and benefits, at Macy’s and Wal-Mart, at McDonald’s and Home Depot, you would encounter the economists’ “multiplier effect.”

For each such worker, anywhere from 1.5 to three other Americans’ salaries depend on the wages generated by Detroit ” barmaids to mechanics to day-care operators to local bankers. 

We’re really into the billions now, just counting wages. All of it at stake if Detroit goes under.

Consider another fact of compensation: How many workers are there, really, paid by the American dollar? In Japan, in South Korea, in Taiwan, in Singapore and China and Germany, the count runs into hundreds of thousands.

Of course not all work in the auto industries, but many do, whether they make parts for sold-in-America cars, or machine tools with which Americans make cars, or computers to account for it all.

And a large percentage of the people so employed do not pay for their own health insurance or their own pensions. Because in their countries, these are supplied by national health and benefits systems. 

When we buy their products, and our dollars pay taxes in their home countries, we are subsidizing their benefits and so contributing to the cost-effectiveness of Detroit’s competitors. That’s just the way it is.

Here’s something else to think about. If Detroit had to close all its factories ” shut down American-owned automotive technology capabilities, such as the ones from which we get our military’s Hummers, and automotive equipment of all descriptions ” we’ll be discarding those abilities forever. No new American-capitalized auto factories strong enough to compete ever will be built again.

We’re going to be buying our tanks and weapons-carriers and field ambulances from foreign suppliers, whether friends or economic rivals.

So really, our choice is: We can pay Detroit to rationalize the American automotive industry and its management now ” or we can pay the rest of the world later.

-Robert Cutts is a career journalist who has been a news reporter, magazine writer and editor, author of two nonfiction books and a college journalism teacher. He lives in Gardnerville and Japan.