“Trump Is Wrong About the General Motors Bailout,” the headline on Steven Rattner’s op-ed in yesterday’s New York Times declared. Donald Trump surely is wrong about GM; he’s Donald Trump. But was Rattner right? Speaking from his expert position as the official who was in charge of the Obama administration’s rescue of the automobile industry, he instead established his own place in the even more alarming category of being Not Even Wrong.
Here’s what the architect of the country’s emergency policy on the automobile industry had to say about GM’s announcement it would be cutting 14,000 jobs:
Rather than some arbitrary downsizing, the company’s decision was a rational response to many worrisome factors.
Its sales have begun to soften. Consumers have shown little interest in small cars, and G.M. lacks a strong line of crossover vehicles. Like many of its competitors, the company continues to increase production at less costly Mexican plants. Moves toward electric vehicles, in particular, will vastly change the types of factories and workers that G.M. needs. What’s more, the whole industry faces disruption by the sudden rise of ride-sharing apps and other innovations that will discourage vehicle sales.
Fourteen thousand people are not losing their jobs for arbitrary reasons. They are losing their jobs for inevitable reasons. They are rationally losing their jobs. Things have happened. Consumers (after decades of policy promoting SUVs by protecting them from real fuel-efficiency requirements) are not interested in smaller cars (on roadways dominated by ever-larger vehicles built to see over the previous generation of large vehicles). GM’s facilities (after decades of policy protecting SUVs from real fuel efficiency requirements, while atmospheric carbon dioxide kept rising) are not prepared to start building electric vehicles. GM’s production, for some reason or other, is cheaper in Mexico, and there is nothing preventing it from relocating there. Low-wage gig-work drivers are supplying an alternative to car ownership for customers who can’t afford it. Forces of nature! (Like floods or wildfires.)
Trump’s answers to these problems are bad answers: trade war, bombast, threats. Rattner, representing the technocratic establishment he helped spare from collapse, had no answers at all—neither for the past nor for the future. How did GM get to this point?
When Mr. Obama decided to save the auto companies in 2009, electric cars were just beginning to be produced, ride sharing was in its infancy, and I can’t remember a single expert telling us that self-driving vehicles would arrive in my lifetime.
Some critics argue that workers should come ahead of G.M.’s robust profits and hefty share repurchases. However, the company’s stock price is only modestly higher than it was in 2010, when shares of the post-bankruptcy company began to be traded. And as painful as layoffs and plant closings are, it was a failure to see tougher times ahead that helped send G.M. off a cliff a decade ago.
How could the car czar have been expected to guess what the next not-even-ten years might hold for the industry he was pouring tens of billions of tax dollars into? And how could anyone ask him to make plans for what might come next?
Rattner called for “more sophisticated remedies” for the ailments of American manufacturing, to be developed “with our allies and with the support of international organizations,” but nowhere in the columns did he specify what those sophisticated remedies might be. All there was was the usual weary set of halfhearted suggestions for managing decline: more job training, so workers might chase after some of the jobs that have not yet suffered their own inevitable disappearance. Something something to show the experts feel bad about the useless classes starving or turning to drugs.
In addition, the American government should increase spending on education and training and finally begin that the long-delayed infrastructure initiative. We need to foster Americans’ pioneer spirit, and encourage them to move to where the jobs are.
For some Americans, it’s too late for retraining or relocation. They deserve a stronger social safety net, including programs to reduce the tendency to turn to alcohol and opioids.
We’re not going to return American manufacturing to its halcyon days, but we can do better.
We can do better, though we can’t say how. Listen to us. We have nothing to say, and you have no other choice.