Why are Americans so bitter with its auto makers?

General Motors, once the world’s mightiest industrial enterprise have gone begging the federal government to avoid bankruptcy and its consequences. As it appears, the lawmakers are not convinced about the sincerity of the automaker as well as its capability to make the companies viable and competitive with the bailout amount. For the time being, the lawmakers have turned down the $25 billion loan request.

The nation that discarded a white American for an African American for occupying white house, is no mood to go by techno-nationalism to favour Detroit Three with a discriminatory bailout. However, the most surprising aspect of the unprecedented bailouts is the preference of the Americans for the financial companies and banks over the manufacturing units. Why does America prefer Citibank over GM? As in any enterprise or corporation, the executives taking care of finance of the country rightly or unscrupulously are controlling the destiny of the nation. US is no way different.

Perhaps Americans trust its banking industry and financial institutes more and have confidence that it can keep America at the top in the world as only superpower. It is strange that while the law makers expected GM to provide “a forthright, documented assessment” of their current operating cash position, short-term funding needs “and how they will meet the financing needs associated with the plan to ensure the companies’ long-term viability”, the Citibank gets $100 billion or three times of that without many conditions.

Automakers have been cutting down their cost. That’s why they moved operations to Canada and went all over the world to set up facilities. Even today they are cutting down the cost by reducing the so badly criticized fleet of corporate jets to minimum. They are trying to survive by selling their stakes in different affiliate and closing down the factories in US. As reported, Ford had agreed to sell 20 percent of Japanese affiliate Mazda Motor Corp., raising about $540 million. GM also has completed the $233 million sale of its 3 percent stake in Suzuki Motor Corp. GM plans to idle five plants in Ohio, Michigan, Kansas, Missouri and Ontario. But people expect an overhaul of top management including the replacement of CEOs and senior executives and drastic reduction in their remunerations and perks.

GM has also been trying to do a lot to wash away many myths from the minds of Americans at large with data and facts. Unfortunately, the myths don’t die in days. It may be the actions too late and perhaps too little too. But America and Americans, more so the management and UAW must accept the challenge and save at least GM and Ford.

UAW must realize the seriousness and make its members accept the reality by agreeing to work at compensation in line with those in competition. The technocrats and managers must ensure the products as reliable and as contemporary in design as the best from the competition. Let them produce what the consumers prefer. The American innovative instincts must find a solution to match or improve upon the fuel economy of other manufacturers. Finance managers must make the firms compete with the lowest overheads. The U.S. automakers must produce a viable turnaround plan and the government must set clear benchmarks to measure progress and facilitate the automakers to succeed rather than seeing it die.

I feel bad about the Detroit Three as I have been in this industry for the whole life. I wish Americans do not compare manufacturing with financial services and lead the industry to death. Let me profess that without these manufacturers the world can’t expect their competition to provide the breakthrough in clean fuel vehicles that it dreams of. Let the government find some answers to the wild swings between low and high fuel prices that have crippled the U.S. industry by erratically shifting buyer preferences-to and from SUVs. I fail how the government accepts a system in which the gasoline price comes down from over $4 a gallon to below $ 2 a gallon in the name of free market.

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