The real test of Barack Obama’s sex appeal is coming soon to an automobile showroom near you - Would you buy a new car from this man?
The president has given his personal warranty on cars from Detroit - if a fuel pump on your new Pontiac falls apart and the dealer won’t make it good, just call the White House and ask for the president. Happy days are here again.
The transformation of the American automobile industry into a government operation, managed from Europe, may be the preview of how Mr. Obama intends to remake America in the image of the Old Country. London’s Financial Times reported Monday that Sergio Marchionne, the chief executive of Fiat, has big plans for consolidating Fiat, Chrysler and General Motors Europe into an enormous new publicly traded European car company.
Joining the Opel, Vauxhall and Saab models from GM with Fiat and Chrysler would create a company that could generate revenues of $106 billion annually on sales of 7 million cars, making Fiat/Opel, as the company would be called, second only to Toyota as the world’s largest automobile company. Note the weasel words “would” and “could.”
“From an engineering and industrial point of view,” Mr. Marchionne told the newspaper, “this is a marriage made in heaven.” Mr. Marchionne says the new company would reap “synergies” by borrowing, merging and adapting the various models. But “synergies” don’t always translate to good cars. Nobody walks into a showroom to kick the tires of synergy.
All hail Fiat/Chrysler, of course, and may all the little Fiats run forever. But Fiat’s reputation in America is not great; those who remember them at all remember Fiats are underpowered tin cans, shoddy and unaccountably ugly given the Italian gift of good design, tolerable for the relatively short distances typical of European road trips. But not at all happy with running at high speeds on the interstates all day, 600 miles from dawn to a destination in early evening.
The Fiat scheme, like most European ventures into the marketplace, requires a caress from the dead hand of government. Mr. Marchionne must first persuade the governments in Britain, Germany and others where Opels, Fiats, Vauxhalls and Saabs are built under the GM umbrella to lend a hand - and a lot of cash. The “market” is mistrusted in the European social-welfare states because it swiftly and efficiently separates winners and losers.
GM and Chrysler collapsed just as they have actually begun to build good cars. The automakers are learning to their considerable pain that destroying a reputation - a “brand,” in the pretentious jargon of the marketing men - is a lot easier than building one. Putting together loans backed by greedy governments will be considerably easier than fixing what went wrong in Detroit. The further irony is that the United Auto Workers, which extracted the featherbed contracts a quarter of a century ago that doomed GM and Chrysler, will now hold a majority stake in Chrysler and a slightly smaller stake in GM.
We’ll see now how the UAW deals with self-abuse. In the early ‘70s GM imagined that it could stay rich forever selling junk if only it could avoid strikes that shut down the junk-assembly lines. So it agreed to anything the unions demanded.
Then the Japanese arrived with cars of modest size and high quality; the impact on Detroit was of a reprise of Pearl Harbor. This time there was no wake-up call. Good times continued in the junkyard. Soon the Japanese were through with lunch and beginning to sup on Detroit’s dinner.
The news Monday from Tokyo was hardly heartening for Detroit. The Japanese car factories have reduced a glut of inventory and are building cars in numbers again. Toyota said it built 472,000 cars in March, many of them in the United States, up 40,000 over February. Honda and Nissan said they built more cars in March, too. Toyota, which has replaced GM as the world’s biggest auto manufacturer, has negotiated a 26-percent cut in the wages of its union workers and announced Monday that it would cut bonuses for nonunion managers by 60 percent.
“Buying American” is not as simple as it once was; Toyota, Nissan, Honda, Hyundai, BMW and Mercedes are built in America, too. Buying from GM and Chrysler may be an act of good citizenship, anyway. But if you buy a Pontiac Vibe or a Chrysler convertible, keep Barack Obama’s telephone number at hand.
Wesley Pruden is editor emeritus of The Washington Times.