German export advantage…a valuable lesson!
Posted on 07. Apr, 2009 by scott in economic daydreaming, political munglings
The auto ‘crisis’ in the?U.S. is more than just an economic segment issue.? It is a broader problem having to do with our?trade deficit and?our (government as well as corporate)?lack of commitment to quality engineering and first-rate economical manufacturing.? This has been a problem in our country?for years…we would rather buy a cheap ‘knockoff’ from China than get the real deal for a bit more.? A bad precedent to set (and believe me if you shop at Walmart you will understand).
Our manufacturing sector is not in good shape.? Auto’s especially.? What a great time to make changes and?rectify what the last 40 years have caused.? If we let this opportunity to fix the problem pass, especially?by losing?more of our manufacturing base, then we have really blown it!? We NEED a ‘grade A’ auto industry.
BHO has recently made it clear that things have got to change in the auto industry.? Sounds like he is more flexible?with GM but has little patience with Chrysler (truth is?I feel the?same…I have owned three?Jeeps?and they have been the worst maintenance nightmares imaginable…you’d think?I’d learn…but, in my defence, the last one I?bought a few years ago was based on?’Consumer’s Report’ which rated them highly…believe me when I tell you I will NEVER subscribe to that ‘independent’ journal again!).?
Ahh, the auto industry.? Ours to lose and we are doing it pretty handily.? I have a Jeep, a Ford, and a Toyota Avalon…guess which one is most dependable?? The race isn’t even close and it is?not one made in America.?
BHO’s administration needs to remember that?we don’t (and can’t) operate in a vacuum independent of the rest of the world.? Declining auto sales (domestic and foreign sales of our Big Three) are a huge part of our trade balance problem.? We simply can’t afford to let it go.? Not now.? Not in the forseeable future.
If our government causes a further major ‘hiccup’ in auto manufacturing?the results could be disaster.? Not just in job losses but in world-wide credibility.
Let me use the ‘great’ exporter as an example.??For a number of years, the largest ($ volume) exporter in the world has been???? Buzuzzz!??Germany!? They export more than any other country.? On a percapita basis their track record is truly inspiring.? Amazing but not surprising if you look at the facts.?
Germany makes lots of things, but they generally do it well and consumers all over the world appreciate that fact.? This has helped them manage through the ’90’s trauma of?integrating East Germany.? Now there was a problem.? Imagine the U.S. creating five new ’states’ out of all of Mexico and Central America…all the while growing the economy and keeping living standards high.? Germany did just that with East Germany.? Exports were a HUGE part of their success formula (despite the?’socialist’ nature of their political leanings).?
Germany did it with great designs, quality, and reliability.??Face it,?they?makesgreat cars, great high-tech machinery, great chemical products and great electronical goods (and their all-natural hotdogs…they call them wieners…are the best!).??? Those big segments of their economy, their top four exports, just keep rolling along.? It is therefor not surprising they have a $250+ billion trade surplus in the last 12 months (with total exports of nearly $1.5 trillion).?
Surely we must be next?? Nope.
China, at number two in exports and #1 in trade surplus, leads the U.S.? And, in a big way.?
We have a trade DEFICIT of nearly $800 billion on exports of about $1.3 trillion.
Are we going to reverse this horrible trend by simply growing our veracious ’service’ industries.? Not just no, but HECK NO!? We need manufacturing, we need quality machine tools, we need the most modern production capability in the world.? Credibility.? Technology.? Productivity.? Have we forgotten how?
We simply can’t demure to China, Japan, or Germany on these issues.? They have been key to our past and will (must) be key to our future.
What to do?? We must force a remake of our auto industry (GM and Ford at least).? They must become more efficient, more productive and they must regain leadership in manufacturing, automated tool & die craft, and most of all design and consumer appeal (be it ergonomic or fuel economics).? They must become the frontrunners of new American manufacturing…to help with unemployment, to help our trade deficit, to make the $$ stronger, and to give our society credibility.
We just have to be the leader in some aspects of manufacturing for the world.? We have to be the envy of factories and workers worldwide.? We have to ‘make’ things that generate feelings of confidence like the German brands of BMW, Porsche, Volkswagen, and Mercedes.? The best, and most logical place to start again is the auto industry.? By the way, today GM announced a venture with Segway to make a two-wheel, all electric, urban two-seater (the P.U.M.A.).? Cool!? One small step for GM one giant leap for mankind?
So, don’t give up on GM Mr. President.? Force the change we need if you have to, but remember this ‘remake’ is going to take not billions but tens of billions ($$) to implement.? And it will be worth it.
I hate hearing about the ‘cost’ of bailouts and stimulus.? These expenditures are not so much cost as they are investments (if managed properly).? Years from now we can look back on 2009-10 as the time when American creativity and ingenuity won the war?again and it started by winning the manufacturing battle.?
We need another Henry Ford.? There are probably hundreds of us out there ready to fill those shoes.? Let capitalism reign.? Come on America, lets make some stuff!!
We?MANUFACTURE our own advantages.?
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thanks for the photo to flickr’s schoschie
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