The new Cadillac "Barack" or the Ford Harper...a nerdy looking gas guzzler?

So...I have to comment - I've been rather silent, on the bailout of the North American Auto industry.

First, I need to place a number of qualifiers on what I am about to write.

Let me start by saying that I'm clearly confused about what it means to pro-rogue the House of Commons. Apparently, the Prime Minister can make whatever spending decisions he wants now without any agreement from the people elected to Parliament. This weekend the Tory government-in-hiding announced that it would match 20 percent of the amount given to the US parent companies of Chrysler and General Motors. Ford apparently doesn't need the money as badly.

Secondly, I definitely agree that something needed to be done given the importance of the industry to the North American economy. However I also think we need to build a bridge between slow auto sales caused by the current credit crunch and the mobility market of the future while trying to create new jobs in a new economy. Unfortunately we appear to be squandering what might be huge opportunities to turn crises into catalysts of change.

I am actually a bit baffled and mildly amused by the irony of the 'bail-out'. Chrysler is owned by a Private Equity firm Serberus (sp?) They have been unwilling to pump their own money into their own investment. I become very worried when politicians are making investments that the company's owners won't make! As I wrote in a previous blog about my hopes of a Belinda Stronach Liberal leadership campaign, I believe that the right thing to do is to ensure that GM and Ford survive while forcing Chrysler to be split up.

I'm not talking about the money either. Tony Clement was on CBC this morning talking about the need to reduce wages while also boasting of the Canadian auto assembler and parts maker's efficiency as the most productive in North America. Part of productivity of course is quality where Clement was critical of the Big 3s record. Unfortunately, these are not your father's Fords or GMs. North American manufacturers are now winning initial quality awards from JD Power and are building top-selling vehicles. They're even responding to market demand for fuel efficiency even if they are a bit late to join the party.

Here is my main concern. Our Highways, public transit systems, sidewalks and borders are crumbling due to mismanagement by public authorities and dis-investment in assets. Now government is going to loan money to an industry that constantly fights regulation while ensuring that money is loaned with regulation and oversight. Hmmm. Am I the only one wondering why the Tories, who supposedly believe in the free market now believe in market intervention.

At any rate, it is interesting to say the least that we seem to efficiently produce automobiles and the 'best parts in the world' while also having a bloated market in terms of wages. I don't think that auto workers should necessarily be paid as well as they are but I also don't agree with the roll-back of collectively bargained agreements. As partners in the industry the unions have a vested interest in ensuring that the North American industry survives. A rational individual must conclude that they will act in the long-term best interests of their members.

I am curious to see what happens in the coming weeks. Aside from being directly involved in the intersection of transportation and politics, pardon the pun, we are perhaps in the most precarious economic times since industrialization. There are so many questions to be answered.

Will extending new credit on top of bad credit make things better? Can government do the heavy work of both over-seeing the operation of private companies while ensuring the health of their own bank accounts? Can government invest in the private sector while not crowding-out private investment? Can government create new green jobs in a new green economy while propping-up the old order?

The US economy is already in the deep red, over-exposed to foreign debt and most likely still boasting of an over-capacity of low-to-mid wage and skilled labour. Right now we have an opportunity to create jobs building public transit systems. There are thousands of cars sitting on the docks in Long Beach California depreciating by the minute. How will putting money into the Big 2/3 change the fact that people on Main Street USA have over-extended their credit already and are losing jobs and real wages?

Infrastructure jobs take time to create. One doesn't just approve and build a nuclear power plant in a week. That takes at least 5 years. In fact, it would take at minimum 6 months for any infrastructure money to hit the ground so to speak and that money would likely go to backlogs and 'easy' repairs which most likely would create few new jobs.

We could get to work creating new jobs to address long-standing problems. For instance if we we know that there is a shortage of solar-panels, education/training programs could be started to fill the new jobs are created by investments made - yes, to the reward of those who have taken risk previously - and we could collectively start down the path to a post-carbon economy. I think President-elect Obama gets this. It remains to be seen what, if anything, Harper (or Ignatieff) will do with the opportunity of crisis.

At any rate, these are very interesting times. How we figure our way out of the systemic challenges that we have is beyond me. I do think it's misguided to hope that our politicians will do a better job running companies than they will running government but I love the irony that this is where we're heading! In accordance with the title of this blog, I really can't wait to see the new cars designed by the Progressive Conseratives. There's no way the Harper will be as cool as the Barack!