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Restructuring the auto industry
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BarackObama.com
A healthy and robust auto industry in America is going to be needed to build new fuel efficient cars. This will be important to solving our global warming problem. Gasoline powered cars with fuel efficiency based on existing technology will have to be replaced. Designing and building these new cars in America will be necessary for Barack Obama to make good on his campaign pledge of reducing our dependence on foreign oil and creating millions of jobs. You just can’t shut down this much American industrial production and keep either of those pledges. (Although shutting down the auto industry would create such a massive recession that our foreign oil imports would fall; but that is clearly not anyone’s intention.) As Obama recently stated; “For the auto industry to completely collapse would be a disaster in this kind of environment”.
This represents a good time to restructure the auto industry. Everyone is looking for a solution. President elect Obama also stated in his 60 minutes interview; “So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all of the stakeholders coming together with a plan — what does a sustainable U.S. auto industry look like?"
Right question! The keyword here is sustainable! In a perfect world, what do we have to fix? The cost structure has to become competitive with their foreign competitors. All of the legacy costs such as health care costs for retirees have to be unburdened from the companies. The cost of health care for current employees would have to be removed. Foreign workers are covered by government health plans.
Don’t get me wrong; I don’t think people should work for these companies without health coverage just because people in China don’t get coverage. I don’t think that anyone in our country should to without health care. Our country is rich enough that every citizen should have good health coverage. I noticed that John Podesta, Barack Obama’s transition team leader, has suggested that the country implement a consumption tax in the form of a value-added tax to provide health coverage to all Americans.
To keep this in context, Podesta was referring to supplemental revenue to provide additional resources while keeping most of our health care system intact. But, why not raise all the money to provide the funds for a single payer health plan that covers every American through a value-added tax and gets General Motors out of the health care business? We would be asking all Americans to contribute to health care based on their ability to pay while receiving health care according to their needs. We would also be getting foreign manufacturers to help pay for our health care instead of giving them a free ride on imports. This would be perfectly legal under our trade treaties. Foreign countries add value-added taxes to our exports to pay for their health care.
Barack Obama should look very closely at the costs in the auto industry and industry competitiveness in our global economy. We should be planning to build and export millions of electric hybrid cars all over the world to create high paying jobs in our country. This is an opportunity to fix both our manufacturing industry and our health care system. I think Barack Obama has the opportunity to be a great president, but just raising taxes $50 billion or so and spreading the money around is mediocre at best.
