Monday, June 1, 2009

Tempus Fugit and the American Automobile.

1950 Pontiac

Things change.

We are watching the official demise of the Detroit-based auto industry. It has been about 100 years that automobiles and Detroit went together. No mas. There are causes for the failure, and like all failure, there will be a search for whose failures came first.

It is particularly troubling for those of us old enough to recall the golden years of the American auto, the cars of the 60's: GTO, Mustang, Corvette, the pick-up truck itself. Even if today's cars are more reliable and easier to use, they don't have the allure of those old ones.

Which is why many of us been in denial this last year. I hoped that someone, a modern day Lee Iococca, could save this dying beast, this whale washed ashore, gasping for air. But he can not. They will not. The present costs are too high: the pensions, wages, insurance and salaries are above the competitive scale. In economic terms, the market just won't bear it.

Cars will still be needed, they will be purchased, someone will be making them, and they will be made here as well as overseas. The jobs will be moved around, the wages and benefits will match the demand for the skill, and something good could come out of all of this. That is a difficult change. That is the sad reality for the thousands of workers in Detroit, and the auto dealers nationwide.

But this change carries a greater, more symbolic meaning and it is this: the auto industry is a symbol of the country. Its weakness reveals our weakness. An American currency default is as possible as a GM default, and in some ways is already occurring, and a nation with a weak currency and burdened with debt is a nation that will become a slave to the lender it needs.

Things do change -- but the laws, and consequences, of economics are as fixed as the laws of gravity. No matter who is President.

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