Saturday, November 22, 2008

Dingell out at Energy and Commerce

Henry Waxman defeated John Dingell for chairman of the House Energy and Commerce Committee. Good for Waxman. I am not sorry to see Dingell go. Waxman has done yeoman's work for the last couple of years as chairman of the Oversight committee, going through the malfeasance of the Bush administration with one hell of a fine-toothed comb. He's my favorite New York Jewish politician from California.

One reason I'm not sorry to see Dingell go is that he has been blocking the imposition of tougher mileage standards for cars. Dingell is the Big Three's man in Congress, and has been for decades. But I actually think his departure from the chairmanship could be a blessing in disguise for GMFordChrylser.

They need to start clearing out deadwood. That's an apt description of Dingell. He's old-school, old guard, and very set in his ways. We need some radical change in southeastern Michigan, not more of the same complaints. Removing Dingell will hopefully put a little more pressure on Rick Wagoner et al. to make more substantive changes. GM still has far too much manufacturing capacity, and far too many models. All GMC does is take Chevy trucks, put a different name on them, and sell them as GMC. The only reason it exists is so that dealers who sell Pontiacs and Buicks (and, formerly, Oldsmobiles), but not Chevys, can also sell trucks. But it must cost GM at least several hundred million dollars a year to maintain an outdated brand.

This is not a time for "restructuring," tinkering with the org charts, waiting until the economy improves, and redesigning some models. This is a time for massive, revolutionary change. The Big Three have structures that are left over from the 1950's. GM could survive perfectly well with Cadillac, Buick, Chevy, and Saturn. Does Ford really need Mercury?

That is the message that the Democratic leaders were sending when they refused to provide a bailout. The American people need some serious change.

On the union side, the UAW still has its 30-year contracts. When people complain about high union costs, this is what they are talking about. It's possible for someone to start working at LincolnDodgeChevy at the age 18, work 30 years, and then retire at 48. My mother has a cousin who retired at 49. Do some simple math: suppose someone actually does retire at 48, and then lives until they are 98. They would work for 30 years, and then receive a pension and health care for 50 years. It is possible that the Big Three are currently supporting retirees who started working in the 1920's and stopped working before Kennedy was elected. Of course, some kind of national health care would solve a great deal of that problem, and the union took over retiree health care a couple of years ago. But there are still many, many union members drawing pensions.

I don't want to deny someone the right to a good retirement. My grandmother drew a pension from AT&T for many years. But I also don't want to pay a higher price for a car because of those pensions. Unless I get very lucky very fast, I'm sure not going to be retiring in my early 50's. There are a lot of people who retired and based their financial planning on having a Big Three pension. I think all of those contracts should be honored. And there are many current employees who have been planning their lives around being able to retire after working for 30 years. Those people really, really don't want to give up those pensions.

But I have no incentive to buy a car with those pensions built into the price.

Bill Clinton talked about building a bridge to the 21st century. Guess where we are. This ain't the 1950's any more. The idea of job security that the UAW holds so dear has turned out to be a brittle one. There is no such thing as total job security. There's only good luck, and that only lasts so long. At some point, we're all on our own. The only way to really deal with change is to be prepared for it.

John Dingell didn't recognize change coming until it was too late. He won't be the first to lose his apparently very secure job.

I've been hearing about layoffs and problems at ChryslerMercuryPontiac for decades. I am a firm believer in the American car industry; I think it can survive and thrive. I think there is still a great deal of potential there. But I also think there are some bad habits that are going to die a very painful death before rebirth can begin.

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