At this point, the auto industry’s cries for help are nothing new. Chrysler, Ford and General Motors are struggling and in desperate need of government assistance. A few months ago, the federal government promised to help these companies if they meet certain conditions for revamping their businesses. While the companies struggle to accommodate the government’s demands, the government continues to disparage the industry’s progress, going so far as to force out GM CEO Rick Wagoner. If the government is going to take such an active role in the industry’s management, then it must outline a clear vision to resuscitate the industry while assuming the responsibility for seeing the crisis to its end.
Last Wednesday, GM’s Wagoner resigned at the urging of President Barack Obama after a presidential task force claimed that GM had not made significant progress in its attempts to restructure. Wagoner was replaced by Chief Operating Officer Fritz Henderson, granting GM 60 more days of federal funding. At the conclusion of this period, GM is expected to have put forth significant plans to restructure. The federal government will cut off aid if these demands are not met. The government also told Chrysler it has only 30 days to complete a merger with Fiat SpA before federal aid will be discontinued.
While the possible side effects of the auto industry’s collapse have been widely discussed for the state and the nation, students may not realize just how much is at stake for the University as well. Automakers like Ford and GM contribute to the many programs and scholarships at the University.In addition, many parents of in-state students work for the auto industry — or for businesses dependent upon the auto industry — impacting their ability to afford tuition. And University graduates often go on to work for the auto industry, meaning these car companies’ troubles directly impact students’ ability to find jobs after college.
In light of the auto industry’s importance to the University — as well as the rest of the country — it’s important that the federal government make a concerted effort to rescue the industry. And while the government did agree to support these failing automakers, it needs to do more than simply make demands and threaten to cut off aid if the companies don’t restructure quickly enough. Having involved itself in the problem, the Obama administration now has a responsibility to the auto industry and to the people dependent upon the jobs the industry sustains. Forcing out Wagoner was only an acceptable move if the government is prepared to offer better leadership for GM and the industry.
But the government doesn’t seem to have a clear plan to fix the problem, instead placing mandate after mandate on the companies that won’t necessarily create positive outcomes. The auto industry needs a long-term solution to its problems, and the federal government has yet to produce such a solution.
The government knows what the stakes are — it understands the dire repercussions for leaving these companies for dead. It’s evident that millions of Michigan residents, including University students are dependent on these companies.
But just understanding the stakes isn’t enough. It’s time for the federal government to offer a coherent plan. Having fired Wagoner, Obama has implicitly agreed to do a better job than he did.