The Auto Industry Fix

Thomas L. Friedman is one of my favorite columnists. He is author of The World is Flat and Hot Flat and Crowded. His ideas on fixing the auto industry are almost identical to mine. This column appeared in the New York Times and I have copied it here. He is so correct when he points out that Steve Jobs would be the right man to fix G.M. Congressional efforts to save the auto industry may have to wait until Barack Obama is president.

How to Fix a Flat

By THOMAS L. FRIEDMAN

Published: November 11, 2008

Last September, I was in a hotel room watching CNBC early one morning. They were interviewing Bob Nardelli, the C.E.O. of Chrysler, and he was explaining why the auto industry, at that time, needed $25 billion in loan guarantees. It wasn’t a bailout, he said. It was a way to enable the car companies to retool for innovation. I could not help but shout back at the TV screen: “We have to subsidize Detroit so that it will innovate? What business were you people in other than innovation?” If we give you another $25 billion, will you also do accounting?

How could these companies be so bad for so long? Clearly the combination of a very un-innovative business culture, visionless management and overly generous labor contracts explains a lot of it. It led to a situation whereby General Motors could make money only by selling big, gas-guzzling S.U.V.’s and trucks. Therefore, instead of focusing on making money by innovating around fuel efficiency, productivity and design, G.M. threw way too much energy into lobbying and maneuvering to protect its gas guzzlers.

This included striking special deals with Congress that allowed the Detroit automakers to count the mileage of gas guzzlers as being more than they really were — provided they made some cars flex-fuel capable for ethanol. It included special offers of $1.99-a-gallon gasoline for a year to any customer who purchased a gas guzzler. And it included endless lobbying to block Congress from raising the miles-per-gallon requirements. The result was an industry that became brain dead.

Nothing typified this more than statements like those of Bob Lutz, G.M.’s vice chairman. He has been quoted as saying that hybrids like the Toyota Prius “make no economic sense.” And, in February, D Magazine of Dallas quoted him as saying that global warming “is a total crock of [expletive].”

These are the guys taxpayers are being asked to bail out.

And please, spare me the alligator tears about G.M.’s health care costs. Sure, they are outrageous. “But then why did G.M. refuse to lift a finger to support a national health care program when Hillary Clinton was pushing for it?” asks Dan Becker, a top environmental lobbyist.

Not every automaker is at death’s door. Look at this article that ran two weeks ago on autochannel.com: “ALLISTON, Ontario, Canada — Honda of Canada Mfg. officially opened its newest investment in Canada — a state-of-the art $154 million engine plant. The new facility will produce 200,000 fuel-efficient four-cylinder engines annually for Civic production in response to growing North American demand for vehicles that provide excellent fuel economy.”

The blame for this travesty not only belongs to the auto executives, but must be shared equally with the entire Michigan delegation in the House and Senate, virtually all of whom, year after year, voted however the Detroit automakers and unions instructed them to vote. That shielded General Motors, Ford and Chrysler from environmental concerns, mileage concerns and the full impact of global competition that could have forced Detroit to adapt long ago.

Indeed, if and when they do have to bury Detroit, I hope that all the current and past representatives and senators from Michigan have to serve as pallbearers. And no one has earned the “honor” of chief pallbearer more than the Michigan Representative John Dingell, the chairman of the House Energy and Commerce Committee who is more responsible for protecting Detroit to death than any single legislator.

O.K., now that I have all that off my chest, what do we do? I am as terrified as anyone of the domino effect on industry and workers if G.M. were to collapse. But if we are going to use taxpayer money to rescue Detroit, then it should be done along the lines proposed in The Wall Street Journal on Monday by Paul Ingrassia, a former Detroit bureau chief for that paper.

“In return for any direct government aid,” he wrote, “the board and the management [of G.M.] should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver — someone hard-nosed and nonpolitical — should have broad power to revamp G.M. with a viable business plan and return it to a private operation as soon as possible. That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company … Giving G.M. a blank check — which the company and the United Auto Workers union badly want, and which Washington will be tempted to grant — would be an enormous mistake.”

I would add other conditions: Any car company that gets taxpayer money must demonstrate a plan for transforming every vehicle in its fleet to a hybrid-electric engine with flex-fuel capability, so its entire fleet can also run on next generation cellulosic ethanol.

Lastly, somebody ought to call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar.

A version of this article appeared in print on November 12, 2008, on page A31 of the New York edition.

Top 10 New Deal Programs

Conservatives and Republicans seem to be opposed to New Deal style programs. Conservative talk radio hosts and their guests point out that many of the programs initiated by FDR were a failure. We are talking about jobs that at the very least will provide an income for the hundreds of thousands of people who have lost their jobs during this past year. Putting people to work on the many neglected infrastructure needs of our nation is a positive not a negative. The new administration should follow FDR’s lead.

About.com offered these ten New Deal programs as that someone views as FDR’s best ideas. Some of them did not work out as he had hoped. There are three that have impacted America to this day in a very big way. They are identified in bold below.

1. CCC – Civilian Conservation Corps

The Civilian Conservation Corps was created in 1933 by Franklin D. Roosevelt to combat unemployment. This work relief program had the desired effect and provided jobs for many Americans during the Great Depression. The CCC was responsible for building many public works and created structures and trails in parks across the nation.

http://www.ccclegacy.org/ccc_legacy.htm

2. CWA – Civil Works Administration

The Civil Works Administration was created in 1933 to create jobs for the unemployed. Its focus on high paying jobs in the construction arena resulted in a much greater expense to the federal government than originally anticipated. The CWA ended in 1934 in large part due to opposition to its cost.

3. FHA – Federal Housing Administration

The Federal Housing Administration was a government agency created to combat the housing crisis of the Great Depression. The large number of unemployed workers combined with the banking crisis created a situation in which banks recalled loans. The FHA was designed to regulate mortgages and housing conditions.

4. FSA – Federal Security Agency

The Federal Security Agency established in 1939 had the responsibility for several important government entities. Until it was abolished in 1953, it administered social security, federal education funding, and food and drug safety.

5. HOLC – Home Owner’s Loan Corporation

The Home Owner’s Loan Corporation was created in 1933 to assist in the refinancing of homes. The housing crisis created a great many foreclosures, and Franklin Roosevelt hoped this new agency would stem the tide. In fact, between 1933 and 1935 one million people received long term loans through the agency that saved their homes from foreclosure.

6. NRA – National Recovery Act

The National Recovery Act was designed to bring the interests of working class Americans and business together. Through hearings and government intervention the hope was to balance the needs of all involved in the economy. However, the NRA was declared unconstitutional in the landmark Supreme Court case Schechter Poultry Corp. v. US. The Supreme Court ruled that the NRA violated the separation of powers.

7. PWA – Public Works Administration

The Public Works Administration was a program created to provide economic stimulus and jobs during the Great Depression. The PWA was designed to create public works and continued until the US ramped up wartime production for World War II. It ended in 1941.

8. SSA – Social Security Act

The Social Security Act was designed to combat the widespread poverty among senior citizens. The government program provided income to retired wage earners. The program has become one of the most popular government programs and is funded by current wage earners and their employers. However, in recent years concerns have arisen about the viability of continuing to fund the program as the Baby Boom generation reaches retirement age.

9. TVA – Tennessee Valley Authority

The Tennessee Valley Authority was established in 1933 to develop the economy in the Tennessee Valley region which had been hit extremely hard by the Great Depression. The TVA was and is a federally owned corporation that works in this region to this day. It is the largest public provider of electricity in the United States.

10. WPA – Works Progress Administration

The Works Progress Administration was created in 1935. As the largest New Deal Agency, the WPA impacted millions of Americans. It provided jobs across the nation. Because of it, numerous roads, buildings, and other projects were completed. It was renamed the Works Projects Administration in 1939. It officially ended in 1943.

The Start of the Jewish Holocaust

Jewish artifacts believed to be from Kristallnacht

Reporting from Klandorf, Germany — Sometimes serendipity makes history. In this case, it may have uncovered history.

This year, Israeli writer Yaron Svoray came to Germany to research the underground operation that whisked Nazi officials to South America to escape justice after World War II. Svoray was chatting with a local about his project when the man mentioned that a nearby plot of land had served as a dump during the Third Reich.

Windows on history

The man said items looted during the pogrom known as Kristallnacht, or “Night of Broken Glass,” were disposed of there. Thousands of Jewish homes, shops and synagogues were ransacked and burned that night 70 years ago today in an orgy of hatred considered by many to be the start of the Holocaust.

Svoray’s investigative instincts were immediately aroused. On return trips, he examined old maps to confirm the dump’s location here in Klandorf, about 40 miles north of Berlin. In May, he went to the site, now thick with tall grasses, picked a spot at random and dug.

“We just pointed to one heap and said, ‘Let’s start,’ ” Svoray recalled. “Within an hour I had a [metal] swastika in my hand and Jewish porcelain and a bottle with a Star of David, which could have been a Jewish wine bottle.”

Historians in Israel judged the finds to be authentic prewar pieces, enhancing the possibility that Svoray may have stumbled on a trove of Nazi-era artifacts, including rare physical evidence of Kristallnacht.

Svoray, the son of Holocaust survivors, has organized a traditional Jewish service at the dump site to mark and mourn the brutality of the Nov. 9, 1938, pogrom.

But beyond remembrance, his goal is to prod the German government into action. Since he went public with his discoveries last month, Svoray said, nothing has been done to protect the site from looters, and authorities have shown no interest in investigating further.

“There is enough stuff here to warrant an initial search,” Svoray said by telephone from Israel recently. “And the initial search cannot be done by neo-Nazis after drinking beer on a Friday night and then putting it up for sale on EBay.”

The dump site sprawls across several acres, an uneven terrain of wooded copses and bushy ravines. Wooden watchtowers jut out from the overgrowth, lookouts for hunters who come in search of wild boar and deer.

For Svoray, an author whose book on neo-Nazism was turned into a TV movie in the U.S. in the 1990s, knowledge of the dump site came as a surprise.

Not so for some residents of Klandorf, a quiet village of about 200 people where unfamiliar cars can attract curious stares from behind curtained windows.

Arno Gielsdorf, a burly, friendly mechanic whose family has lived here for 150 years, owns some of the land that the dump site occupies. He has always known of its existence.

“My father told me that [at the time] the population from the town would scavenge what was useful,” said Gielsdorf, 49, adding that his grandparents went out there “almost every day,” picking up silver utensils, tankards and other reusable scraps.

That is, until the day authorities abruptly barred people from the dump.

It was November 1938.

“For several days we didn’t know what was happening,” Gielsdorf said his father, who died in 2001, told him. “At this time of the Reichspogrom [Kristallnacht], it was forbidden to go there and take out what you wanted.”

The refuse pit in use then was 25 feet deep. But when residents were finally allowed back in, “it was covered with regular garbage, so that nobody could get to the items beneath,” Gielsdorf said.

If physical evidence of what happened the night of Nov. 9 was indeed brought here, from Berlin or beyond, there may have been plenty of it.

Rampaging Germans smashed the windows of Jewish houses and businesses, giving Kristallnacht its name. Temples were desecrated, their furnishings tossed into the streets or set ablaze. Inspired by Adolf Hitler’s fanatical fascism, rioters pulled Jews from their homes, destroyed their belongings and beat some of them senseless, in a campaign of violence that the Nazis said was spontaneous but was in fact cultivated and encouraged by the regime.

At least 91 Jews were killed, and 30,000 were arrested and sent to camps in Buchenwald, Sachsenhausen and Dachau.

“It’s really the turning point of the intensification of the violence against Jews in Nazi Germany,” said Ann Millin, a historian at the U.S. Holocaust Memorial Museum in Washington.

Positively identifying any finds as property plundered from Jews on Kristallnacht and not simply thrown out or confiscated at some other date would be difficult.

Svoray said, “If someone says, will you find a piece of paper saying, ‘Save me,’ . . . from the 9th of November? I think not.”

But “if someone says I can’t start a dig until I know it’s Kristallnacht, that’s nonsense,” he added. “You have enough evidence to make a serious undertaking.”

Exposed and half-buried artifacts are certainly not hard to find.

On a recent visit by a foreign reporter, after a day of heavy rain, one small patch of the dump site was littered with jagged shards of porcelain, a delicate pink floral pattern still visible on one piece. Bottles made of colored glass, which might once have held perfume or a tonic, were strewn about.

Within minutes of scraping at a small mound of dirt, Ako Hintzen, a bodyguard who travels with Svoray in Germany, unearthed an old bottle with the raised inscription “Apotheke Zander,” a pharmacy. Another large bottle bore the name “Josef” and a worn-away surname, plus the word “Berlin” and the charming figure of a cat.

The items Svoray found last spring, including the bottle with the Star of David, were taken to the Ghetto Fighters’ House museum in Israel, which documents Jewish resistance to the Nazis. Museum officials examined the pieces and pronounced them genuine prewar objects, although lab results of some kind would be more conclusive, said Simcha Stein, the museum’s director.

“I was so excited,” Stein said. “It was like a scream [from the past] in front of my eyes.”

He acknowledged the problems in trying to determine the artifacts’ provenance.

“To tell you that this part of the bottle was taken from this Jewish table, from this street, from this family — I can’t tell you that. But that’s not important,” Stein said. “What is important is that it can be another way to bring the Holocaust story” to life and to the attention of a new generation of young people.

That is something Svoray too would like to see. But it will take the resources of the German government to make it happen: to secure the site, which he identifies as the first priority, and then to mount an excavation.

“I’m convinced that this is a worthwhile historical, academic endeavor. There is no downside to it,” Svoray said. “I will not rest until this becomes a proper historical investigation.”

Chu is a Times staff writer.

henry.chu@latimes.com