orgtheory.net

Short thoughts: A number of people are admitting that it may be time to let leading auto firms file for bankruptcy. I find this to be fascinating for a few reasons:

• People don’t seem to believe so much that if the Big 3 fail then so does America. Though everyone would admit it would lead to much hardship, at least in the short term.
• A cultural sociology note – Auto industries used to have this special place in the imagination of national policy elites. Back in the 50s, every country wanted to have its own auto industry, even if they were at a horrible disadvantage. You simply didn’t have national pride if you couldn’t make cars. No one is saying that anymore, though people do take pride in the work ethic of manufacturing workers.
• Globalization note – it’s also now hard to make the “security argument”: you need US auto firms because if an ally turns against us, we won’t have access to needed cars and related equipment. When supply chains stretch round the world, that’s a tough argument to make. An auto firm and its suppliers haven’t been inside a single country, or small # of countries, for years.
• A few people have argued that Detroit can’t regenerate itself because it’s tied to a declining, overpaid industry.
• If we save the auto industry now, will it mean that we’ve socialized/ institutionialized the risk of that sector? Is the US gov’t now responsible for periodic bailouts of these companies? What sort of relation is that? Underwriter? Quasi-owner?

Any more sociological thoughts on the impending auto firm bankruptcy?