Monday, November 17, 2008

Remember The Treaty Of Detroit

I blogged about this back in July but now that a bailout of the American auto industry appears imminent, it’s time to remember the Treaty of Detroit.

From Roger Lowenstein’s July 2008 New York Times column:
General Motors established its pension in the “treaty of Detroit,” the five-year contract that it signed with the United Automobile Workers in 1950 that also provided health insurance and other benefits for the company’s workers. Walter Reuther, the union’s captain, would have preferred that the government provide pensions and health care to all citizens. He urged the automakers to “go down to Washington and fight with us” for federal benefits.

But the automakers wanted no part of socialized care.
They seemed not to notice, as a union expert wrote, that if Washington didn’t provide social insurance it would be “sought from employers across the collective bargaining table.”

Okay, all of you conservatives blaming unions for the demise of the Big Three need to step away from the GOP talking point, especially since last year's labor contract “nearly eliminated the labor cost difference between the Detroit Three and the Japanese.”

I do think that the failure of America’s auto industry affects far more than just Detroit. It affects parts manufacturers, businesses dependent upon those manufacturing sites, retailers, etc. ... It will reverberate throughout the economy. I have no sympathy for General Motors or the rest of them, which I’ve blogged about many times. But just because I’m angry at the Big Three’s exceedingly inept management and decision making doesn’t mean I want to see the American economy thrust into a deep depression.

But if it’s true that the Big Three are partially to blame for America’s sucky healthcare system, well that ticks me off. And I don’t see why, instead of just throwing a bunch of cash at the automakers, we can’t kill two birds with one stone by providing universal healthcare for everyone, which would take that cost off of the automakers’ ledgers.

This isn’t my idea, it’s something Atrios mentioned this morning, inspired by Josh Marshall’s post about seeing opportunity in the crisis. Marshall wrote we should

use the 'company' as the vehicle for leapfrogging the US into the 21st century, non-hydrocarbon auto industry.


The danger is that we spend all the money and come out the other end still with a big region of the country tied to a dying industry, no true progress on the energy/climate crisis front and a lot more debt.

This is absolutely correct. The automakers’ backwards decisions related to healthcare, higher CAFE standards, gas guzzling SUVs, etc. are what sunk them, but these are problems affecting us all. So any “bailout” plan needs to be presented in a way that benefits us all in a more tangible way than just protecting us from the economic ripples of a dying auto manufacturing industry.

I think providing universal healthcare to all Americans would benefit the American people and it would benefit companies like GM that currently have to carry that cost. Let's make these bailout packages work for everyone, not just high-powered executives awaiting their golden parachutes.