Selling American cars

The Baltimore Sun

After a week of drubbing, jokes and outrage over their failed appeal to Congress, the leaders of America's auto industry appear to have gotten the message. When asking for billions in federal financial aid, candor goes a lot further than hubris.

In plans submitted to Congress this week, company executives have offered to make sweeping cuts in their operations and to eliminate an array of venerable auto brands and models - that's long overdue. They have agreed to negotiate significant cuts in union benefits, a necessary if painful concession for labor leaders, and offered to work for $1 a year rather than the millions in salary and bonuses they had been receiving. And in a real gotcha moment, they also decided to park their private jets in Detroit and drive to Washington for hearings that begin today.

These steps are encouraging developments. A preliminary agreement with the United Auto Workers to delay the companies' payments to a multibillion-dollar, union-run health care trust and to dump a jobs bank in which thousands of laid-off workers are paid most of their salaries also should impress the congressional inquisitors.

Still, the auto chiefs face a skeptical Congress and nation. Some 61 percent of Americans surveyed this week said they oppose government aid for the major U.S. automakers. Congressional leaders say the automakers have to prove they can deliver on their promises.

Those doubts are justified. GM and Chrysler said they need $11 billion just to get through this month. And with America and the world struggling in a deep recession, it's hard to see how these troubled companies will sell the numbers of vehicles they need to survive, regardless of their economizing efforts. Sales in November were the worst in 26 years.

Beyond the reforms offered, the companies need to explain in detail to Congress how they intend to eliminate thousands of uneconomical dealerships, swiftly bring their labor costs closer to what Toyota pays its workers in this country, and quickly produce more energy-efficient cars that Americans will want to buy.

That's a tall order. But if the auto executives are candid and convincing in their explanations of how they intend to weather the turmoil and rebuild their industry into a lean and profitable competitor, the government should gamble on the multibillion-dollar rescue effort because the loss of millions of jobs is at stake. Aid payments should be tied to improvements, and if the car manufacturers falter, the money should stop.

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