Terry Golway
Before he took off for a tour of Asia in mid-November, President Bush played host to the leaders of the Big 2.5 American automakersGeneral Motors, Ford and the U.S. half of the multinational conglomerate known as DaimlerChrysler. The automakers had been hoping for an S.U.V.-sized summit conference on the state of American automaking, but the White House, after avoiding the topic during the midterm election campaign, decided on a more modest face-to-face session. If we did not know better, we might conclude that the White House was trying to send a message to the Big 2.5: Smaller is better. Get it?

The automakers had lots on their minds, but their chief talking point was currency policy. They told the president that the weak yen is wreaking havoc with the U.S. auto market and giving Japanese giants like Toyota an unfair advantage.

Blaming the yen for shocking losses at a time when the signature U.S. automobile product is a sport utility vehicle is a bit of a stretch, and word has it that the president was not overly impressed with this line of reasoning. He might have been more impressed, though hardly likely to act, if the Big 2.5, spurred by patriotism, had pressed for an end to the tax advantages that come with buying a gigantic gas guzzler rather than a sensible sedan. The Big 2.5 apparently did not make such a request.

Ford lost $5.8 billion in the most recent quarter. Chrysler lost $1.5 billion. G.M. managed to lose a scant $91 million. At the same time, Toyota turned a nice profit of $3.5 billion, while Honda made a $1 billion profit. Perhaps this astonishing difference really is a matter of currency inequity. But overwhelming evidence suggests that the almighty consumer has spoken.

The U.S. auto industry, one of the signature successes of postwar corporate capitalism, seems on the verge of going the way of that other industrial icon of bygone years, steel. The Big Three shrank to its current configuration when Germany’s Daimler bought Chrysler and merged the two companies several years ago. Perhaps it’s just a matter of time before Toyota and Honda do the same to G.M. and Ford. If, or when, that time comes, it will be hard not to conclude that the S.U.V. gamble of the 1990’s, which produced handsome profits at first, wound up being the last desperate act of a dying industry. With luck, the S.U.V. craze will not have similar repercussions for American national security or the global environment.

My point, however, is not to throw dirt on the grave of U.S. automaking. In fact, as a bondholder in G.M.A.C., the credit arm of General Motors, I would be delighted to see the company prosperous and profitable again. Instead of beating up the Big 2.5 for sins against the planet and common sense, I’d like to praise them for another topic they raised with President Bush: national health insurance.

The automakers, in their heyday, were among the most enthusiastic proponents of welfare capitalism, a phrase that today prompts sneers from the free-market brigades. Autoworkers, represented by one of the nation’s most aggressive unions, the United Auto Workers, enjoyed a health benefits and pension package the likes of which young workers today cannot imagine. This was the age of the Great American Job, a time when a young man or woman with a good but basic education could dream of home ownership, decent wages for an eight-hour day, health coverage at minimal out-of-pocket expense and a pension in return for years of loyalty to the company.

Those days, of course, are just about gone in the private sector. But the automakers, like some other old-line companies, have not completely dismantled the corporate welfare state. They still provide health benefits and pensions for millions of retired workers. In fact, according to the automakers’ estimates, the cost of pensions and health benefits for retirees adds more than $1,000 to the cost of an automobile. There are about 2.6 retired G.M. workers for every current worker.

Company executives have begun to realize that the competitive advantage enjoyed by Toyota and Honda may have little to do with the yen and more to do with Japan’s system of national health care. The Japanese companies do not have to shoulder the huge costs of health care.

So these titans of private enterprise have begun to mention the unmentionable: national health care, known to a certain sector of the American public as socialized medicine.

Many voices, of course, have called for national health insurance over the years. Most were dismissed as kooky lefties who reside in privileged urban settings on either coast. Now, however, the sensible leaders of the American automobile industry have begun to talk aboutcan it be?some form of, yes, socialized medicine.

A cynic would argue that this is the only way the United States will ever move to a single-payer, European-style health insurance system: If the leaders of capital, in essence, beg to be relieved of the cost of providing private insurance. That may be about to happen, if, for the first time in a very long time, the U.S. automakers are actually on the cutting edge of the next new thing.

The new Congress can continue this conversation with hearings on the nation’s health care dilemma from the point of view of employers. Free-marketeers may be surprised by what they hear. In the end, private business leaders, not nutty lefties, may become the loudest advocates for government-supplied health care.

Terry Golway is the curator of the John Kean Center for American History at Kean University, Union, N.J.

Comments

Robert McNulty | 12/18/2006 - 11:15pm
If the big 2.5 automakers (and Mr. Galway) think Toyota's compeititive advantage lies in Japan's national health system, they are on the wrong track.

One of my daughters and I both have differnt Toyota brands made in the United States, by American workers in plants 2000 miles apart. We both have them serviced by Toyota dealers using American staff.

Toyota's advantage is in updating the Hawthorne Experiment and giving its employees decision making responsibilities in all aspects of the business, quality being a top item.It provides competitive wages and health care to its American employees also.

No doubt the diminishing 2.5 would like to dump its cost problems dating from past mis-management onto the American taxpayers, but it won't hsppen.

Robert McNulty | 12/18/2006 - 11:15pm
If the big 2.5 automakers (and Mr. Galway) think Toyota's compeititive advantage lies in Japan's national health system, they are on the wrong track.

One of my daughters and I both have differnt Toyota brands made in the United States, by American workers in plants 2000 miles apart. We both have them serviced by Toyota dealers using American staff.

Toyota's advantage is in updating the Hawthorne Experiment and giving its employees decision making responsibilities in all aspects of the business, quality being a top item.It provides competitive wages and health care to its American employees also.

No doubt the diminishing 2.5 would like to dump its cost problems dating from past mis-management onto the American taxpayers, but it won't hsppen.

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