"The financial straits that the Big Three find themselves in is not the product of our current economic downturn, but instead is the legacy of the uncompetitive structure of its manufacturing and labor force," Mr Richard C. Shelby, senior Republican on the banking committee said.
And on the House side, Republican and Minority Leader John Boehner said:
"Spending billions of additional federal tax dollars with no promises to reform the root causes of crippling automakers' competitiveness around the world is neither fair to taxpayers nor sound fiscal policy."
What most Republicans want to do is just bust the union and lower wages. High wages is a central economic strategy of any recovery, so it's bad policy to try to lower wages. (That's the single strongest reason why government policy should always be to encourage more labor unions to form -- unions result in higher wages for workers, which results in more purchasing power for Americans which results in a stronger economy).
However, the Republicans do have a point. It's too expensive to make cars in the U.S. compared to Japan or Europe. And it's not because we pay our workers too much.
It's because the cost of buying health insurance to workers and retirees is contained in the cost of the car for American companies and not for Japanese and European companies.
We force GM, Ford and Chrysler to pay for health insurance and run a huge insurance division. If we handle health insurance the way most European companies and Japan handles it -- which is to have the government pay for all health insurance while hospitals and doctors and providers are private and they just get paid by the government -- then the American automakers would save billions of dollars and become much more competitive.
Even just extending Medicare -- the most efficient health insurance company in the nation -- to people who are 55 and over and letting them buy into the plan (as many Democratic Members of Congress have suggested) is a great bailout of automakers by helping to solve a structural problem that makes them (and every other manufacturer) less competitive.
I hope that's part of change in Washington. And I suspect that a smarter way to pay for health insurance than making American manufacturers less competitive will be.
