Industrial Base

Thought you'd heard every conceivable reason for a Detroit bailout? Think again. From an op-ed by retired General Wesley Clark:

"Some economists question the wisdom of Washington's intervening to help the Big Three, arguing that the automakers should pay the price for their own mistakes or that the market will correct itself. But we must act: aiding the American automobile industry is not only an economic imperative, but also a national security imperative."

So once again, the specter of national security raises its ugly head for the justification of a questionable government action. Clark goes on to cite the success of the Humvee, that four-wheeled star of the Gulf War, as an example of how GM's innovation helps drive national security. But a close look at some examples closer in time tells a very different story. Nearly all of the designs for the latest generation of armored vehicles are taken from original plans by overseas companies. General Clark is right that American civilian auto production didn't have to divert much capacity to meet the need for new MRAPs -- the sad truth is, the Big Three could have done so even if they wanted to, because their product lines are too clunky and not agile enough to meet that kind of short-range demand.

The hard truth of the matter is that truly innovative ideas, which could be "game-changers" on the battlefield, have been AWOL from Detroit's methods of operation for some time now. Clark goes on in his op-ed to harp on the need for new hybrid powerplants and electrical generation capability in the next generation of military vehicles, while conveniently ignoring the fact that nearly all of the innovative work in this field right now is being done outside of the United States. The general seems to believe that a focused military investment in this area will bring a huge leap forward -- but it's been decades since we've seen a major leap forward in technology that was led by military investment. These days, the reverse is usually true -- civilian technology bounds forward while military capabilities struggle to keep up. The average avionics suite in military aircraft these days is state of the art -- for 1995-2000. Army vehicles are now getting the ability to see moving maps and send text messages to one another in real time -- about four years after the average suburbanite could do it.

What Clark's rhetoric is really about is Joe Biden's infamous four-letter word: J-O-B-S. It's an open secret that every year, the defense budget becomes less about getting the most capable equipment into servicemembers' hands, and more about protecting the job base in as many congressional districts as possible. The viability of a defense program is no longer determined by its ability to produce a product on time and in budget, but by how many states it can be spread across to ensure viability. The hysteria over the recent award (later revoked) of the Air Force's new tanker to EADS Aerospace is a great case in point -- while some of the arguments over confusion on requirements and design was well-founded, other arguments were nakedly protectionist in design and had nothing to do with the capabilities of the aircraft itself.

So how do we fix that problem? A step in the right direction would be to take action to open our contracting and competition process to foreign companies, and tap into the growing brainpower of the largest expansion of the middle class in history -- the one currently underway in India and China. This may sound crazy, but it would dovetail nicely with diplomatic and military efforts currently underway to make both of those nations responsible stakeholders in the global economic system. Coupling this outreach with enhanced transparency and accountability requirements in government contracting would have two powerful impacts: it would be a giant step towards reforming the bloated and serpentine procurement bureaucracy, and it would be a powerful push towards transparency in areas like labor standards and subcontractor quality for these foreign companies.

There are certainly some powerful economic arguments for a bailout of the Big Three. But national security is simply not one of them. In order to tap the best ideas and processes, the whole world must become our industrial base.

Read More:

Should the Government Bail Out the Big U.S. Three Automakers? HuffPost Bloggers Weigh In

Comments

[therealredstateblues]

Two world wars were won with the tanks planes, jeeps and guns made by the US industrial base

It is shear folly to rely on foreign countries for our defense material. Some like Communist china cklearly do not always have our best interests at heart.

It was CAPACITY that the US held an advantage over technolgoically superior foes like Germany. Germany clearly held the weapons technology edge at the start of WWII, but lacked the capacity and infrastructure to mass produce. The US had the opposite - largely borrowed technology but tremendous industrial infrastructure - the innovations and technology came as a result of the production.

Sadly we have eroded our industrial base to dangerous levels for both our economic well being and our national security

[DuganS1]

Military strength is no longer determined by who has the most planes, ships, tanks, and guns. It's determined by who has the best technology.

[therealredstateblues]

right, and as I said, without the capacity to make that technology, you can not develop it, let alone produce it

the same trap the germans found themselves in

[thatvisionthing]

Defense idiocy is relying on military technopower for security. Worked really fine against a bunch of guys with box cutters and motive.

Start treating other people like you wish to be treated yourself. Big mystery there. It starts with respect, as if all men were created equa-- oh.

[Realization]

Without the industrial base it will be others who have both the technology and capacity. The game plan has to include government and private commitment to have both. One good way to get technology is to bring in the best you can find at a reasonable price and improve on it. Need to get away from the "not invented here" and "the U.S. is the best" attitude. We are behind in sector after sector and need a new model. Or to borrow from someone else's model and adapt it to our strengths.

[nomoredead]

What would be wrong with just having 'The Big 2 '

[KillTheMessenger]

The industrial military complex eats its parents. But not even that is new. The USSR provided the blueprint for that one.

:-)

[William1950]

No! no way is this a good idea... the only reason there has been any lack of new ideas is because our companies are focused only on the bottom line... we need a new model... I call it "Compassionate Capitalism" We can have it all if we share...
Imagine a world where employees were treated like assets and paid a decent wage and provided health care insurance... A world where they then would have the requisite funds to continue consuming... or buying crap. Imagine a world where employees were valued and not treated like disposable overhead, a world where employers did not fire them at the drop of a hat, or the drop of a line on a graph. Imagine a world where crap is manufactured where it will be consumed, by those who will consume it. We cannot buy stuff to fuel the economy when our jobs are being outsourced to canada or mexico or vietnam.

[DuganS1]

Companies have always been focused on the bottom line. Businesses have never been charities. And what is a decent wage? Apparently what workers and retirees for the UAW are making is not a decent wage because it is putting the domestic auto makers out of business. As for consumption, the problem is there has been way too much consumption in the US, not a lack of it. As far as being able to fire employees, the mobility of labor in the US is one reason why our economy is so strong. Other countries lag far beyond in the creation and building of new industries (Europe) and lag significantly in productivity (service sector in Japan is very inefficient). Being able to cut employees is also why our economy is able to adjust so fast to new developments and economic conditions.

[therealredstateblues]

maybe we should cut your wages dugan? how would you like that?

the mobility of labor is a fallacy.

[Realization]

It is Japanese manufacturing companies with stable shareholders, few MBAs, and strong government support and protection that are winning here. The Japanese service sector is largely inefficient. Some of that is due to the iron rice bowl (vested interests) and some is due to social determinations. Some of the Japanese service sector, such as convenience stores, is far superior to anything in the U.S. The inefficiency isn't all bad. Depends on context.

U.S. auto unions and U.S. executives are paid too much.