Bailout Watch 477: Sacrificial Lamb, Anyone?

by Edward Niedermeyer

Published: March 31st, 2009

Ousted GM CEO Rick Wagoner is being posthumously hoisted onto a cross by Michigan’s Governor Granholm and the Detroit News, which is running a piece today entitled “GM Workers Upset That Wagoner Became Sacrificial Lamb.” Huh? Better him than them, right? “Here we got past all the bad media, all that fury during congressional hearings, and now they want him to resign,” says UAW Local 599 (Flint) Chair, Terry Everman. “It’s really a setback, because you don’t know what new direction GM will take.” And it’s not just the uncertainty that has workers in a kerfuffle over the Wagoner pink slip. “It just didn’t seem appropriate for the administration, rather than the board, to dictate,” says OnStar Manager, Bryan Bateman. “I think Rick was a sacrificial lamb in all this. I think he took one for the company.” Except that Red Ink Rick should have been dumped years ago, and the irresponsible board members that kept him around have been canned by Obama as well. Oh, yeah, and GM turned its fate over to the feds the second it took public bailout money. But, hey, one man’s sacrificial lamb is another man’s tasty entrée. To (you guessed it) more government intervention on behalf of the General. Of course.

But the best indication that it will take more than Wagoner’s head on a platter to turn around Detroit’s insular self-importance comes courtesy of the DetN‘s apologist advocacy group du jour. “Fighting Against International Restrictions; Industry and Manufacturing Advocacy Group for public Education,” or “Fair Image” runs a website that puports to tell “The Truth About American Manufacturing And Trade Policy.” And the site’s editor is the perfect foil for the DetN‘s brand of soft propaganda. “Washington just denied that government trade and energy policy had anything to do with the mess we are in, and replaced it with the head of Rick Wagoner,” says FI’s Chris Vitale. “It re-enforces this public image that it’s all the companies’ and workers’ fault. But the (federal government) just washed their hands of any responsibility for its unfair trade policies that created this environment.” Just think: instead of firing Rick Wagoner we could have just come up with a suite of protectionist policies to further insulate GM from foreign competition. Because loaning money to the General just isn’t enough.

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Pch101 on Apr 01, 2009
I didn’t think it would be necessary that I qualified that statement with “finished goods”, not lumber and soybeans. As is true with many other western countries, the US’s primary export is travel and tourism. (Money spent by foreign visitors is counted as an export.) It’s a legitimate flow just as much as anything else. Previously, you made the claim that "North America isn’t much of an exporter." That obviously isn’t true. North America is the world's largest exporter. It's even (at least for now) larger than China. The figures that I cited were for US goods exports. Add in US services, and that number goes up by almost 50%. The economics are fairly straightforward – when a country has high labor costs, manufacturing operations have to create some sort of value-added benefit to the customer in order to justify a price premium, which can allow them to hurdle those added costs. If Detroit can’t justify that premium to American customers, who demand steep discounts when buying most of these vehicles, then it’s a stretch to believe that Detroit can dupe others to pay the premium, either. Hence, not a whole lot of exports -- you can't sell people stuff that they don't want. If you're a disgruntled auto worker who is upset that the US doesn't export a lot of Chevy Cobalts outside of North America, then blame General Motors for its business strategy and for producing a second-rate offering, not the rest of the world for disliking these vehicles at least as much as Americans do. That car was made for us, which frankly is insulting to the American people. What it “has to do with” is showing why the transplants don’t commit infrastructure to the production of small cars in the US Honda Civics are built in Canada, which has been part of the US-Canada joint automotive zone for the past four decades. Nissan Sentras are built in Mexico, part of the NAFTA zone where Ford, GM and Chrysler all build vehicles. When you get your hackles raised about who's building vehicles in places such as Hermosillo and Oshawa, then we can talk. Otherwise, you're not being, er, fair.

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Mykeliam on Apr 01, 2009

Can tell me how many Asian transplants build compact cars in the US? (The answer is one, the newly opened Honda Civic plant in Indiana.) first Japanese auto plant in America ....in 1982 when the first Honda Accord came off the line. And wasn't that considered a compact car at the time??The Marysville Motorcycle Plant began operation in 1979, and isn't that the ultimate compact??? I respect the opinion, but must ask about the facts

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