Corn Stalking Capitol Hill

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The chief executives of Detroit’s Big Three automakers pulled up to Congress last week in gaudy cars tricked out to tout the virtues of ethanol, the corn-based substitute for gasoline. In addition to tax subsidies for filling stations that carry ethanol, the CEOs were there to persuade lawmakers to “reform” health care and “level the playing field” internationally.

Oh, but lest you think Detroit is looking for a bailout, GM Chairman Rick Wagoner was quick to set everybody straight. “We weren’t interested in coming and asking for help for the domestic auto industry,” he asserted. No sir, GM, Ford and Chrysler were only there to ask for changes that would benefit the overall economy and American competitiveness.

Meanwhile, a group calling itself Level Field Institute, financed by auto industry retirees (Ford also provides some direct funding), is running TV ads pointing out that foreign carmakers employ only 20 percent of American autoworkers. The bulk of the 5 million or so workers directly employed in American auto and parts plants still belong to the Big Three.

But several things about the Big Three’s public relations offensive were worth noting. For one thing, the CEOs were stiffed by the White House. President George Bush deferred a long-scheduled meeting until June, and then announced that even that meeting would be held in abeyance. How the mighty have fallen: In the old days, Washington regularly sent delegations to Detroit to ogle new cars and hear the automakers’ line on industrial policy.

The effort to tout ethanol also demonstrated the degree to which the environmental movement has succeeded in painting the family auto as a threat to the planet. Rather than fight back against futile fuel efficiency standards and global warming hysterics, Detroit struggles to deflect criticism by portraying itself as greener than green. Yes, Ford admits on its website, ethanol yields 25 percent less energy than gasoline and is an economic loser without steep subsidies. But it produces fewer greenhouse gases!

TV ads pointing out that Detroit still employs far more American workers than the foreign owned auto plants may not be terribly persuasive either. Indeed, they may only succeed in underlining the degree to which the American companies are still less efficient than their competitors – requiring 80 percent of the autoworkers to maintain a 60 percent market share.

As for leaning on Japan, China and others to raise the value of their currency, most currencies already have risen substantially against the dollar – even as Detroit’s market share continues to erode. Indeed, since the early 1980s, the dollar has declined by more than half against the yen. Wall Street tanked last week as worries mounted that further dollar weakness – the flip side of a stronger yen or yuan – might unleash renewed inflation.

Health care? It’s not as if Detroit was forced to offer all those benefits to its workers. To the extent the American taxpayer bails out the “legacy” manufacturers on health care, what’s to prevent the unions from demanding higher wages, leaving the underlying competitiveness issue untouched?

I happen to think Detroit is making real progress. If it can conclude a significant pay and productivity with the unions in coming months, it will be back in the game. But driving around Washington in cars dressed up like corn stalks, and trying to persuade Americans that debasing the value of their savings is a good thing, isn’t likely to help much.

Mr. Bray writes columns for The Detroit News and RealClearPolitics.com.


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