Automakers must adapt

By U.S. Rep. Mary Fallin (OK-5)

Congress convened briefly in the week before Thanksgiving, the key issue being what to do about the financial problems facing the American auto industry.

No decisions were made, but it is possible we will return in mid-December to take up this issue again.

While opinions vary on what, if any, congressional action should be taken to help shore up the Big Three automobile manufacturers, there is a growing consensus among lawmakers that these companies are working under an outdated and unsustainable business model.

A multi-billion dollar handout will only delay the inevitable restructuring that must take place for these corporations to be financially viable. Until auto manufacturers develop a long term plan for sustainability and can guarantee a greater measure of accountability to taxpayers, they should not expect a handout from American families, all of whom are living under the same recession and dealing with the same hardships.

In some cases, problems faced by these companies go back many years.

There's a reason the domestic market share of the Big Three American auto makers has been declining. They haven't been making the cars and trucks that American consumers want to buy. Part of that may simply be bad luck, but some must surely be attributable to poor decisions.

The Big Three are also hampered by union contracts that require them to pay much higher wages than their competitors, even those who build cars here in the United States. When GM or Ford pays an average of $71 an hour to assembly line workers while Toyota or Nissan average $48, it's no surprise that it costs a lot more to build an American car that is comparable to one with a Japanese name.

At a recent congressional hearing, I was disappointed that the auto executives flew in on their private jets and essentially said "Give us some money" without offering any ideas about how they could change the way they have done business in the past. If we simply hand them a basket full of cash without real changes, they are likely to be back in a year asking for more.

There's a simple way to succeed in any industry: make products people want to buy at prices they can afford. The car companies have not done well at that, which is why their domestic market share is at or below 50 percent for the first time in history. They are not listening to American consumers who are demanding more quality, fuel-efficient options.

In the end we took no action. If nothing further is done in December, the car companies may have to enter bankruptcy, like other American firms that are badly managed or make foolish decisions. Make no mistake, exercising this option would also send shock waves through the economy, including here in Oklahoma where car dealers and related industries would also feel the impact.

For now, they should not come back to Congress without first showing the American taxpayers that they understand the need for a new business model that includes sustainability and more efficiency.

In short, auto makers need to understand support for assistance will be in direct proportion to their willingness to adapt both to the current marketplace and the increased demand for accountability to the people they are asking to pick up the tab the American tax payer.