American auto manufacturing is a Trillion-dollar industry. Yep, that’s Trillion with a capital “T”, as in $1,000,000,000,000.00. GM alone has revenues of 200 billion dollars per year. Most people outside of Michigan, especially politicians in Washington, fail to comprehend the magnitude of the auto industry’s impact on the US economy. Not only is it the biggest cog in the intricately interconnected American economic machine, it is also one of the only remaining vestiges of American manufacturing might – a capability we need to retain for national security reasons. While some may say that Toyota and Honda build some of their cars in the US, it is important to remember that the point of final assembly is a relatively minor contributor to an economy. The two most economically and socially valuable aspects of the auto industry are:
1. Design, engineering, marketing, and research and development jobs (high-paying jobs that keep American companies competitive in the world economy).
2. Country of incorporation (this is where the company’s profits end up and typically corresponds to the homeland of its shareholders).
GM, Ford, and Chrysler (the Big 3) do almost all their design/engineering/marketing/etc. in Michigan, and all three corporations are headquartered in Michigan. Because of this, it’s imperative that Michigan is strengthened to help the Big 3, and that the Big 3 are strengthened to help Michigan. Mitt Romney is the only presidential candidate who seems to understand or even care about this. In addition, he’s clearly the only candidate with the skills, experience, and intelligence to actually do something about it.
As a former GM employee (I’m on educational leave right now) I’m frustrated that Washington has turned a blind eye toward the American car companies in recent years. I remember President George Bush taking more than a year to finally agree to sit down with the CEOs of the Big 3! What a tragedy! (It would probably have been even worse with a Democrat in the White House as they would have only listened to the unions.) With President Romney, the White House would have an open line and a listening ear for the Big 3.
One of the most frustrating Washington-based initiatives are the “CAFÉ” fuel economy MANDATES. Most people think, “hey, better fuel mileage, I support it!” But what they fail to realize is that the Big 3 – in catering to the tastes of the US market for generations – have built an infrastructure, set of expertise, and entire lines of vehicles designed to meet the needs of the large-vehicle-oriented US market. While importers like Honda and Toyota came to America with a history (and from a geographic base) that favored small cars. So when you require both companies to meet the same fuel mileage requirements, you are clearly favoring the importers. It’s like telling a 5-foot tall woman and a 6-foot tall man that they both need to lose weight and get down to 120 lbs!
This kind of unfair Washington mandate is what McCain and the Democrats support. It hurts the Big 3 and it hurts the American economy.
Here’s what Governor Romney said about it:
“I wasn’t wild about those because even though we all agree we want to see our fuel economy standards go up, when CAFÉ was put in place, it helped the foreign manufacturers and hurt the domestics, it hurt our jobs here.”
“I want to make sure that if we’re going to have a change in fuel standards that this has been worked out with our domestic manufacturers in a way that helps them rather than hurts them and it’s not what I’ll call an unfunded mandate, which is the federal government says, ‘You’ve got to do this — now find a way to go pay for it. Instead, we’re going to have to work together — federal government and state government, manufacturers and labor — to make sure that if there’s gonna be a dramatic change in the industry, it works for the benefit of American jobs, not for the benefit of foreign jobs.” (Source)
(I’m sure we’ll hear more about this tomorrow when Romney addresses the Detroit Economic Club.)
Besides the fuel economy mandates, Mitt Romney has a deep understanding of the other issues the Big 3 are struggling with. Issues like skyrocketing legacy costs, artificial devaluation of the Yen to make Japanese imports cheaper, and unfair trade agreements that put US manufacturers at a disadvantage are at the top of Romney’s list. Not only does he understand these issues, he is willing to do something about them – and frankly, he’s the only person running for president, Republican or Democrat, who can actually FIX them.
Here’s the bottom line: If you care about the economy – nationally and in Michigan – you would be completely insane to vote for someone other than Mitt Romney.