The "Other" American Auto Industry

Fred Barnes has a really good article in the Weekly Standard on "transplant" auto makers. The success of foreign auto makers with plants in non-union southern states has been a quiet sub-plot in the auto bailout politics. The reason the Big Three stick together instead of let the others fail is because of "supply shock" - what's good for one is good for all. However, (I gather) foreign car makers must have their own supply lines which allow them to avoid any supply shock and kept them quiet throughout the whole bailout business. And the reason Shelby, Corker and all the other southern Senators are against the bailout is because their states have successfully attracted foreign car manufacturers. Part of the reason the Dems don't want Detroit to go bankrupt is because "restructuring" is usually a death knell for unions.

So - here are the real questions: is it important to have (1) an American name on the hood of a car (2) what constitutes a "good" job. First, as far as the economy goes, it doesn't really matter whether the plant is making Fords or KIA's as long as it's providing jobs and boosting the economy. Although the may make Nissans in Tennessee, I doubt you'll see George Strait driving a Pathfinder through Nashville. So I think we can agree that an American brand has mostly nastolgic value at this point. Second. if these southern plants are giving people "good jobs" then whether they're unionized shouldn't matter. This part is somewhat unexplored (or unknown to me). I thought the Big 3 paid $27/hr - while the transplants offered $23. Now, Barnes says it's upwards of $45/hr (which could still be partially b/c they have to out-do the UAW). Also, I wonder how the benefits are and how the working conditions are. I have heard that the transplants are better at making their workers happy, so maybe there's less of a need for the unions. Or maybe since they're in "right to work" states the problems are below the surface. But all told, the BIG reason Detroit is in a fix is because they gave good healthcare to their workers - and they have thousands of "legacy" retirees to pay for. Nissan's only been in the U.S. for 10 years, so they don't have any career employees retiring. So I wonder how good the transplant benefits are. Still - all told - this shows again how the lack of universal health care can place HUGE competititve burdens on some companies - to the extent that a famous brand like Ford could disappear.

Sorry for the ramble, I just wish we could discuss the real issues out in the open. Is it important for America to still build Ford's and Chevy's? And can you still get a good job with good benefits without a union. I think they way you answer these questions largely determines where you are on the bailout.