Chrysler's circuitous path to bankruptcy

Chrysler is in bankruptcy but is supposed to survive as a brand, with billions of dollars in help from federal taxpayers and a deal with Fiat, the Italian carmaker. It's a sad day for the company that used to tout its engineering prowess and that once seemed to have a leg up on other U.S. automakers in the struggle against foreign competition.

Over the past 25 years, I've owned four Chrysler products, putting nearly 400,000 miles on their odometers. At the time, I bragged about the comfort and reliability of the Dodge and Plymouth K-cars and talked my parents into making a Dodge Spirit from Cox Dodge in Wilson the last car they ever bought. But one by one, as the cars approached or topped 100,000 miles, key components of the cars — water pumps and air conditioners, primarily — failed. Since the late 1990s, my wife and I have driven Nissans and Hondas and now own two aging Hondas, which are still running reliably.

Taxpayers bailed out Chrysler once before, in 1979, when Detroit's chronic misjudgment of consumers' desires and a huge spike in gasoline prices left all three U.S. automakers foundering. That bailout paid off. It gave Chrysler, under the leadership of Lee Iacocca, time to bring out its new generation of front-wheel drive cars and to invent the minivan, which revolutionized the vehicle market. Chrysler paid back the government loan ahead of time, but after Iacocca retired Chrysler went up the wrong path again, resurrecting its 1960s-era Hemi engines and muscle cars and building ever-larger SUVs to complement its minivans.

But even in recent years, Chrysler did not seem to be as oblivious as GM or Ford. Chrysler never made a gargantuan Expedition, and its 1990s styling on cars such as the Dodge Intrepid was ahead of the competition. Unfortunately, its merger with Daimler Benz never paid off for either entity and probably helped bring Chrysler down in the end. Chrysler dumped Plymouth, the brand Richard Petty had driven to so many NASCAR victories. Its forays into specialty cars, such as the Dodge Viper or Plymouth Prowler, didn't do much for sales of more mundane vehicles.

Still, I think Chrysler's long-term prospects, especially if the Fiat deal works out, could be better than GM's. The automaker that once claimed 50 percent of the U.S. market and was being threatened with an anti-trust lawsuit by the Johnson administration, is weighted down by too many models that are nearly identical, too much corporate bureaucracy and too little attention to customers' interests. Recent news reports indicate GM might also end up in bankruptcy. Meanwhile, foreign automakers are producing more and more cars in the United States (my family has driven two made-in-the USA Nissans and one made-in-the-USA Honda, but our Chrysler vehicles were made in Canada or Mexico) and are more closely attuned to customers' demands.

Detroit, once the heart of American industry, seems to have thrown a piston rod.

America needs to be into manufacturing

Executives from the Big Three Detroit automakers, plus the head of the United Autoworkers, were back before Congress Thursday to ask for billions of dollars in taxpayer money. They say that without billions in taxpayer funding, they will go belly up, with residual effects that will be felt throughout the economy.

No doubt, bankruptcy by Ford, GM or Chrysler would do further harm to the staggering economy. The question before Congress is what would be worse — pouring taxpayers' hard-earned dollars into a poorly managed, uncompetitive industry or allowing bankruptcy to take its toll, whatever the damage.

Congress should look at more than just the auto industry. Almost all manufacturing in the United States has suffered in the global economy. The steel industry, the textile industry, the furniture industry — all have dwindled to nearly nothing because of global competition and detrimental federal policies. Rather than just bail out Detroit, Congress should consider how the United States can restore its manufacturing base.

Some have worried about the impact of losing the automakers on national security. In World War II, all the automakers churned out jeeps, tanks, trucks and so forth for the war effort. Could the United States face a similar threat without the heavy industry that dominated U.S. jobs in the 1930s, 40s and 50s? America has given up on manufacturing and has tried to gain prosperity through creative financing, which is what sparked the current economic crisis. To be truly successful, the United States needs to make things, not just finance them. Perhaps the United States can't compete in highly labor-intensive industries, but it should be able to compete in manufacturing things that utilize robotics and other labor-saving devices. The Obama administration should create policies, including tax policies, that reward domestic manufacturing of a wide variety of goods.

Cars can be manufactured successfully in this country. Just ask Toyota, Nissan, Honda and Hyundai.