Rev up the auto industry

Fisker Karma Plug-in Hybrid Sedan

Detroit 2008: Fisker Karma Plug-in Hybrid Sedan

Dear PJ,

I hope you didn’t think I was trying to get your goat in re: Obama and the auto industry. Being a banker and financial wizard, I somehow suspect your sympathies lay with McCain — for whom I have a lot of respect — but I strongly feel as though his fatalism regarding our auto industry was precisely the wrong tack to take.

Because our entire economy runs on wheels, as it were. Perhaps more importantly, our cars are a great source of pride to Americans and to simply give up in the face of foreign competition seems a singularly un-American, dispiriting prospect.

On the other hand, reviving the industry and going on to lead the world with cool, clean-running cars — that is something millions of us could get on board with and could go a long way toward providing the kind of leadership and momentum we clearly crave at this uncertain hour.

Anyway, those are my considered thoughts on the issue, for what they’re worth.

From today’s WP :

A Friend in Need

Mr. Obama needs to show the auto industry some tough love in helping it weather its troubles.

BARACK OBAMA made clear yesterday that the American automobile industry will have a friend in theWhite House starting Jan. 20. At his first post-election news conference, Mr. Obama, who had supported more federal aid for Detroit during the campaign, echoed talking points the industry has been using to seek more aid from Congress. He described carmaking as “the backbone of American manufacturing,” and noted that its current “hardship” extends to “countless suppliers, small businesses and communities throughout our nation who depend on a vibrant American auto industry.” Mr . Obama wants his aides to come up with new ideas “to help the auto industry adjust, weather the financial crisis, and succeed in producing fuel-efficient cars here in the United States.”

Hemorrhaging cash, Detroit wants an acceleration of an already approved $25 billion government loan to retool for greater fuel efficiency, plus $25 billion more to help the automakers ride out the financial crisis. This would, indeed, be a bad time for a sudden shutdown of the industry; including related businesses, that could eliminate hundreds of thousands of jobs, with tragic effects for communities across the Midwest. Still, the industry is no longer quite as pivotal to the American economy as it once was; and many other businesses are also hurting, including many whose workers make less than Detroit’s unionized workforce. Even with a bailout, U.S. carmakers will have to shed workers by the thousands. As for improving the fuel efficiency of the U.S.-made fleet, the best way to do that would be to permanently raise federal gas taxes. Alas, higher gas taxes seem to be politically impossible at the moment.

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