Arkansas Democrat-Gazette

Running out of gas

- George Will George Will is a Pulitzer Prize-winning columnist for The Washington Post.

WASHINGTON—Henry Ford, according to corporate legend, said that if he had asked potential customers what they wanted when he founded his company in 1903, they would have said faster horses. The infant automobile industry began by giving people what they did not know they wanted.

Twelve decades later, this industry is being discombobu­lated by government pressure to manufactur­e products—electric vehicles—that the public does not much want, least of all in the quantities that Washington’s central planners deem proper.

There has been much commentary about the nation’s “new economy” because of all the new devices produced to serve the digital economy and the dominance of finance—the making of deals rather than material things.

Yet here we are, invited to be fixated on a partial strike affecting only a portion of a quintessen­tial example of the old economy: the automobile industry. During the strike, much of the industry continues to manufactur­e vehicles, far from Detroit.

In 1979, United Auto Workers membership peaked at 1.5 million, in a national civilian workforce of 98.8 million. Today, the big three— General Motors, Ford, Stellantis (Chrysler’s parent company)—employ about 150,000 UAW members, and the civilian workforce is about 160 million.

In the 1950s, Detroit was the nation’s fifth-largest city (it is now 27th) and Germany and Japan were still struggling to recover from damage done by U.S. bombers, many with Fordbuilt engines. U.S. car companies, with 95 percent of the national market share, had negligible competitio­n and could pass along to consumers the costs of labor contracts.

Labor strife in Detroit—the automobile industry had supplanted railroads as the emblem of the nation’s industrial might—used to be riveting news: Capitalism’s big battalions were battling for supremacy. Now, the union and the companies are subordinat­e to the biggest battalion: the federal government.

In a market economy, labor and management participat­e in profit-making, then tussle over carving the profit pie. Now, however, government hovers over the negotiatin­g table, armed with monetary incentives (subsidies) and regulatory coercion (ever-stricter CAFE—corporate average fuel economy—standards).

The Biden administra­tion is ladling at least $12 billion into the automakers to cushion them against the Biden administra­tion. Against, that is, myriad government pressures to quickly eliminate the non-EVs that the obdurate public prefers.

This will require the companies to make tens of billions in capital investment­s, some with money the public will provide. The semi/ sort of/once-upon-a-time private companies will pretend this is private enterprise, freshly re-imagined.

The UAW reasons, not unreasonab­ly, that its job is to seize for its members as much as it can of the billions sloshing around in the name of “industrial policy” subsidies. Meanwhile, non-UAW production lines are still humming along, disproport­ionately in the South’s right-to-work states.

The UAW worries that EVs, having many fewer components than internal combustion vehicles, will require many fewer assembly workers. Last year, Ford’s CEO suggested 40 percent fewer. The union probably cannot even moderate the Biden administra­tion’s climate monomania. It might, however, extort some taxpayer-funded payoffs.

The union should also worry that many Americans will keep their gas-powered cars longer than usual, rather than take a leap of faith regarding EVs. How many miles can they go between charges? The government is in charge of guaranteei­ng an adequate supply of charging stations, so drivers, too, should worry.

To understand why this month’s inventory of unsold EVs is almost twice that of gas-powered vehicles, start by reading NPR’s report on Energy Secretary Jennifer Granholm’s misadventu­res during her planned drive from Charlotte to Memphis, trying to demonstrat­e EVs’ delights. Fortunatel­y, her advance team had a gas-powered car.

Regarding one matter, the UAW is too timid, given the nation’s increasing­ly political economy. The UAW rails against the CEOs’ salaries at GM, Ford and Stellantis, reportedly $29 million (362 times a median employee’s earnings), $21 million (281 times), and $24.8 million (365 times), respective­ly, in 2022.

The UAW should propose that each CEO be paid $152,771, the highest base pay for GS-15 federal civil servants. This is what the CEOs should be considered, because their companies have become appendages of government, implementi­ng its policies.

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