Auto industry requires unparalleled effort

November 24, 2008
 Flora Fetid was at the door.

"Come in," I said.

"Could I?" she asked, her voice trembling.

Fred and Flora have lived next door to us for the better part of three decades, but I've never seen her so distressed. "What's up?" I asked after we settled down with soothing cups of tea.

"Fred," Flora said, "is fuming. He's beyond frenzy; his fuses are afire over this financial fizzle. He spends hours in futile fantasies of frustration and fatalism. I'm trying to be his faithful friend, but in the face of his fantastic fears, I'm fully fatigued."

"That's serious," I agreed. "What's his primary concern?"

"The same as most Hoosiers: What's going to happen to the auto industry?" she said.

"Ah," I said, "there's room for a big difference between what is going to happen and what you or I think should happen."

Flora sat quietly, sipping her tea as I collected my thoughts.

"The American auto industry," I said, "has been misdirected for more than 50 years. Yes, it has been profitable, but at the expense of our environment and our economy. The auto has been instrumental in degrading our air and spreading our population over vast areas. Federal, state and local governments have been willing co-conspirators in this wasteful, destructive behavior.

"Instead of setting standards for urban development and for automobile performance, governments have yielded to management and labor interests seeking to build housing and roadways in ever-expanding rings about the central core of our cities."

"That's all in the past," Flora said.

"Right," I said. "But now we have a chance to stop the madness. Now we can help the auto companies become instruments of progress in return for financial aid. We can set realistic emission and performance standards. Those auto and union executives who cry that they cannot meet these standards can step aside."

"Who will set these standards?" Flora asked.

"Not Congress," I said. "They have failed too often. These tasks demand the attention of the nation's leading technical experts. But they also have the tough job of maintaining choice for consumers. The choices should be fundamental rather than cosmetic."

"And what happens while these experts debate?" Flora asked. "Are the factories to stand idle? Are auto workers and the employees of auto suppliers and dealers to stand around collecting unemployment compensation for a year or two?"

"Flora," I said, "this may be the greatest opportunity America has ever had to make a course correction. These temporarily displaced workers are talented people; they know how to work. Let's put them to work on the nation's most urgent problem: education.

"Let's train these millions of workers to mentor students who have trouble learning the basics of reading and math. In a short time, they can be parts of the schools that need them to serve the next generation of Americans. While these workers continue to be paid, their services will be invested in education or other necessary public services.

"It will take diligent administration to make it work," I concluded.

"It will take a miracle," Flora said, "and I don't think this will free Fred from his fruitless fuddle."


Marcus taught economics for more than 30 years at Indiana University and is the former director of IU's Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.
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