Saving Jeep - and Detroit's Big 3 - is key to saving the nation

12/10/2008

In 1941, car manufacturer Willys-Overland demonstrated to Congress the strength and sturdiness of its new Army scout vehicle - the Jeep - by driving it up the U.S. Capitol steps.

Invented and manufactured in the United States, the Jeep would become an icon of American ingenuity, durability, and mechanical ability. Soldiers loved the lithe little vehicle for its uncanny capacity to go anywhere. The New York Museum of Modern Art would exhibit it in 2002 and describe it as a masterpiece of functional design. Now it's 58 and constructed by United Auto Workers for Chrysler in Toledo.

Disregarding Jeep's help in securing this country against fascists, conservatives like former Republican Massachusetts Gov. Mitt Romney are calling for its execution. Mr. Romney and his conservative compatriots want Congress to deny Chrysler, General Motors, and Ford federal loans so that the Big Three go bankrupt. Using false wage information, they have persuaded the public that auto workers are overpaid. That has resulted in polls showing 61 percent of Americans oppose aid to the Big Three. And now Senate Majority Leader Harry Reid is saying he fears he can't muster the votes necessary for a loan.

Congress cannot let the Jeep die in bankruptcy. Congress must not fail the U.S. auto industry. Doing so would be abandoning the core of the American economy - manufacturing. America is not built on Wall Street's credit default swaps and collateralized debt obligations. Its wealth and culture are built on and built by middle-class workers who construct actual products like steel beams, tires, and Jeeps; who operate and repair machines that pull oil and coal out of the ground, and who log forests and man the mills that convert trees into paper.

Just after the end of World War II, when the Jeep first became a civilian vehicle, 35 percent of workers belonged to labor unions. That's significant because union members earn 30 percent higher wages than nonunion workers and are 59 percent more likely to have health insurance. Those better wages and benefits helped create the American middle class. The money they earned and spent churned through the economy and kept it humming.

But over the next half century, union membership declined. Now it is only about 12 percent. Business and industry groups intent on the extinction of unions can claim credit for a good part of that. These are the same organizations that today mislead the public about auto worker wages, claiming they make $70 an hour when it's really $28. They're the same ones advocating auto company bankruptcy because it would allow the Big Three to renege on their contractual promises to workers and retirees. They criticize auto workers for making a decent living, $28 an hour plus health benefits and a pension. And they denigrate the companies for being decent corporate citizens and fulfilling their health care and pension promises to retirees.

During the past half century, multinational corporations have shipped a significant number of those good-paying union jobs overseas. With the help of wrong-headed federal policy that encouraged it, the United States has lost an average of 12,000 manufacturing jobs per month since 1980. Since May, the average has been nearly 60,000. Americans supposedly benefit from the import of cheap goods. But unemployed workers can't afford to buy them.

Along with the decline in jobs and union membership came a reduction in the rate of personal savings and an increase in household debt. The financial situation of the typical American family became increasingly precarious even as, over the past 25 years, the very richest one tenth of 1 percent of Americans accrued more and more wealth. These were the kind of guys involved in short-selling stocks and selling subprime mortgage-backed securities. These were the kind of know-it-all Wall Street risk takers who gave themselves $30 billion in bonuses last Christmas.

You know what happened next. Three months after those bonuses, the initial investment bank fell. Bear Stearns got the first big federal bailout in March. Then other financial institutions and a gigantic insurance company involved in the subprime speculation toppled. Congress quickly offered up $700 billion to save financial institutions, and giant Citigroup took $25 billion of that in October and another $20 billion in November trying to stave off bankruptcy.

Congress used taxpayer dollars to save those year-end-bonus awardees on Wall Street. Then it stiffed the working stiff. So far, there's been talk, but no actual help, for millions facing foreclosure. And while unemployment is rising, Congress is dithering over the Big Three's request for a loan that could save millions of auto worker and support industry jobs.

Unemployment increased to 6.7 percent in November, after 533,000 people got thrown out of work in just 30 days. During the past 12 months, 2.7 million people lost their jobs. And, finally, what every one of them already knew was officially declared: the country has been in a recession for a year.

We shouldn't be spending all of our financial resources salvaging those who destroyed the economy. America needs to invest in what works - its people. Congress must provide mortgage relief. But, most urgently, it's crucial that we reinvigorate our manufacturing base. Swapping paper is not enough to sustain a strong and stable middle class that will save money and buy cars and homes.

The Jeep helped us win World War II. Saving the Jeep - and Chrysler, GM, and Ford - would be a symbol that America understands manufacturing is key to a strong economy and financially brawny workers.

Jeep owners should let Congress know they're prepared to drive up the Capitol steps to support loans for the Big Three and investment in American manufacturing.

Leo Gerard is International President of the United Steelworkers Union. This article originally appeared on the USW blog.