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Tuesday, June 03, 2008

Who Killed Janesville?

by folkbum
Post title patterned after this film, which I have not seen, but have heard good things about. And it's narrated by President Bartlet.

I hope, of course, that Janesville recovers from the blow it received today. I spent five years in Rock County and I know how GM's plant there is the lynchpin to a whole lot of that economy. If another manufacturer doesn't come in and utilize that talent pool, well, I don't know what will happen. Let us all hope for the best.

But the question remains: What did in the Janesville GM plant? Seems to me there are, perhaps, a handful of reasonable suspects:
  1. The oil companies. For many years, Big Oil and Big Auto have had a sick, almost incestuous relationship; cars would only run on gas and gas would stay cheap enough to keep people buying cars. The 1990s was perhaps the worst of it: Not only did GM sell key electric car technology to the oil industry (where it never saw the light of day again), gas prices in the U.S. stayed ridiculously cheap in the midst of a mondo economic growth spurt. Suddenly everyone had more money--or at least felt flush, since we were told the market was never going to go down again (Dow 36,000, anyone?). The answer: Bigger cars. For Janesville, a boon. For oil companies, a massive boon. But it was an illusion. And as soon as the SUV lost the consumer juice to the hybrid--and Big Auto started chasing that ball--Big Oil bailed. With profits like it's making now, the oil sector could easily roll back prices a little, even a moderate amount. But they won't--the market will bear $4.25 a gallon, and that's what they'll charge. (Which, ultimately, is why a gas-tax holiday is a dumb idea: You'll pay the same for a gallon of gas, but the part of the price that used to pay the bill to fix the roads will instead boost Exxon-Mobile's third-quarter profit.)

  2. George W. Bush. Why not? There can be little doubt about two things: One, the war in Iraq has not done a thing to stabilize the world oil market. Sure, it didn't really fall apart as soon as the first tanks rolled into Baghdad, but you have to admit that the rise of Iran, the lack of the promised Iraqi oil, and the general antipathy with which the rest of the world now view us is not helpful in the least. Two, the present administration has done nothing to promote alternative source of fuel, alternative sources of transportation, or greater responsibility among automakers to provide higher efficiency vehicles.

  3. Ronald Reagan. Yeah, I'll go there. When the CAFE standards were relaxed in 1985--and the tradition of halting increases was begun--the stage was set for the absurdly low-mpg SUVs that ruined Detroit. As long as I'm at it, I'll add in the Republicans and Michigan Democrats throughout the 1990s that refused to reclassify the SUV as anything other than a truck, which is what gave GM and Ford such license to make inefficient monsters for so long.

  4. GM. GM was slow, slow, slow to catch on that efficiency was going to be the key to success in this century. GM has locked itself into old facilities (it cannot afford to build new ones), sometimes, as in Janesville, literally locked in because of the life that has grown up around the plant over 90 years. It is too big, with too many products (including legacies that should be put to pasture), and, like the Titanic, too big to dodge the iceberg.

  5. Unions, NAFTA, and taxes. I put these together because they are weak candidates, and, even taken together, they cannot compete with the top four here. GM didn't close its Janesville plant because Wisconsin taxes are too high (I haven't even seen that suggested, though I thought it would be Talking Point A on every conservative blog today). NAFTA didn't save GM's plant in Toluca, did it? And the unions didn't crush GM either. It may well be that the typical American-made GM car has more labor costs in it that the typical American-made Toyota, but wait a few years until Toyota's employees start retiring and see what happens then. Besides, what's killing the SUV is not its sticker price, but rather the price at the pump.
Ultimately, I'm not sold on any one of those, or even all of those in combination, as what killed Janesville.

I think it's us. I think we did it, the zeitgeist, the ethic, the Culture of the Car that is so ingrained into us that "What do you drive?" is a fairly common getting-to-know-you question. It's the nagging suspicion that people who ride the bus are poor and will rob us if we get on there with them. It's our representatives who see only lanes, lanes, lanes, and not a track to be had. It's the rules that require big lots and far-away shopping, rules that we demand because, well, we have a car, so what's the harm? It's the belief that whatever happens everywhere else, America will be just fine. When you live by the car, you die by the car. God bless you, Dwight D. Eisenhower, indeed.

General Motors could never have been born in any other place, among any other people. In the end, we also killed it.

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