Senators McConnell and Shelby wrecked the auto bailout. They gave a litany of reasons, the basic gist being the Big 3 can't compete with Toyota. It's a valid concern. But, well, what about Toyota? Unlike the Big 3, foreign automakers have plants throughout the South. So do Southern GOP Senators somehow think they're voting for their region's "long-term viability," as the new "domestic" auto industry? If so, their badly mistaken. Toyota put out a statement today saying "the U.S. auto market is shrinking rapidly," and "a major bankruptcy would exacerbate an already difficult environment for Toyota and the industry." It seems counter intuitive: a global corporation calling for its closest competitor to receive government aid. Are they just posturing? George Magliano, Automotive Analayst for Global Insight, doesn't think so.
"Nobody benefits from a bankruptcy," he said. "It's just gonna be too disruptive for the industry. A bankruptcy by Detroit hurts the supplier base, and everybody uses that supplier base. That's the issue."
Seems logical. In fact, Jeffrey Liker, author of The Toyota Way, agrees. He also notes that:
"GM is a partner of Toyota through [their joint venture NUMMI] as well as a competitor."
"And if the American auto companies go under or are shadows of what they were, and the foreign automakers like Toyota are still strong, there could be a political backlash."
It seems that backlash has already begun. Grassroots campaigns like BoycottAlabamaNow.com are calling for "true Americans" to support "true American industries, not foreign companies that assemble products in the U.S." This site joins prominent blogs in suggesting someone "look into whatever contributions these Republican Senators have gotten from these transplant companies."
Oh, dear.
By slashing the tires of the auto bailout, Shelby and McConnell have undone decades of image building by Toyota. They've revived protectionist, anti-Japanese sentiment and endangered their suppliers. They have a funny way of supporting their states.
