Coming up this morning, the Senate Committee on Banking, Housing and Urban Affairs holds a hearing… 

US Senator Christopher J. Dodd Chairman US Senator Richard Shelby Ranking Member

Committee:

Title: The State of the Domestic Automobile Industry: Part II

Date: 12/4/08

Time: 10:00 AM

Place: 106 Dirksen Senate Office Building

Publication: Printable Hearing not available at this time

Witnesses

Panel 1   Mr. Gene L. Dodaro , Acting Comptroller General, United States Government Accountability Office Panel 2   Mr. Ron Gettelfinger , President, International Union, United Automobile, Aerospace and Agricultural Implement Workers of America   Mr. Alan Mulally , President and Chief Executive Officer, Ford Motor Company   Mr. Robert Nardelli , Chairman and Chief Executive Officer, Chrysler LLC   Mr. G. Richard Wagoner , Jr., Chairman and Chief Executive Officer, General Motors   Mr. Keith Wandell , President, Johnson Controls, Inc.   Mr. James Fleming , President, Connecticut Automotive Retailers Association   Dr. Mark Zandi , Chief Economist and Cofounder, Moody’s Economy.com

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You watch the hearing online here.

BusinessWeek’s summary of a theme in yesterday’s Senate Banking Committee:

But it was clear from the statements and questions posed by Senators to Wagoner, Mulally, and Nardelli that many think Detroit’s problems are self-inflicted, and that the companies lack the innovation to climb out of their hole.

The criticisms come both from liberals who believe everyone should drive a little green car and the conservatives who blame executive arrogance and unions for the Big 3′s problems.

You can argue the points, but to maintain any sort of fairness or honesty in policymaking you should also acknowledge that Congress bears responsibility for Detroit’s problems as well. In their zeal to to replace the marketplace in determining what vehicles the manufacturers should produce — 35 miles per gallon?  No, 38! — elected officials* have added thousands of dollars in costs and inefficiences to each vehicle while unleashing a fleet of unintended consequences. You know, consequences like forcing Detroit to produce cars people don’t want to buy.

The Wall Street Journal makes this case in a provocative editorial today, taking on the left-leaning critics, “The Environmental Motor Company — Making Detroit a subsidiary of the Sierra Club.”

When is $25 billion in taxpayer cash insufficient to bail out Detroit’s auto makers? Answer: When the money is a tool of Congressional industrial policy to turn GM, Ford and Chrysler into agents of the Sierra Club and other green lobbies.

That’s the little-understood subplot of the Washington melodrama over a taxpayer rescue for Detroit. In their public statements, proponents describe the bailout as an attempt to save jobs, American manufacturing and the middle-class way of life. But look closely and you can see that what’s really going on is an attempt to use taxpayer money to remake Detroit in the image of the modern environmental movement. Given a choice between greens and blue-collar workers, Congress puts the greens first.

Perhaps Congress should consider lifting some of the mandates it has imposed on the industry, things like CAFE standards, or the various strings attached to the $25 billion authorized in 2005 for “retooling.” No? Well, can we at least have an open discussion of these issues after committee members finish lambasting the auto executives?

* We shouldn’t limit the criticism to Congress. Many governors and attorneys general also claim to be more knowledgeable than the marketplace. From Legal Newsline, “Automakers must cut emissions in return for federal money, AGs say“: (continue reading…)

The Senate Banking Committee has not yet posted the prepared statements from yesterday’s hearing, “Examining the State of the Domestic Automobile Industry,” but the testimony  was available elsewhere:

• Rick Wagoner, General Motors, Chairman and Chief Executive Officer
• Alan Mulally, Ford Motor Company, Chairman and Chief Executive Officer (full prepared testimony here).
• Robert Nardelli, Chrysler, Chairman & CEO, Chrysler LLC
• Ron Gettelfinger, President, United Auto Workers

Don’t immediately see the statements from Sen. Debbie Stabenow (D-MI) and University of Maryland economist Peter Morici.

The three auto executives and UAW’s Gettelfinger are also slated to testify before the House Committee on Financial Services at 10 a.m. today, the hearing entitled, “Stabilizing the Financial Condition of the American Automobile Industry.”

The other panel should have its moments of interest:

• Mrs. Annette Sykora, Chairman, National Automobile Dealers Association
• Mr. James S. McElya, Chairman and Chief Executive Officer, Cooper-Standard Automotive, Inc.
• Professor Jeffrey D. Sachs, Director, The Earth Institute; Quetelet Professor of Sustainable Development and Professor of Health Policy and Management, Columbia University
• Dr. Matthew J. Slaughter, Professor of International Economics, Tuck School of Business, Dartmouth College

NPR’s “Morning Edition” has this week been marking the 100th anniversary of the Model T Ford, an entertaining enough series of stories about how the mass-produced vehicle changed America. The reporting has the expected rueful tone now and then, the regrets for modernity, and, “Now India wants affordable cars, too?”

“It was a wonderful invention, the Model T and the mass-mobility automobile,” says Dan Neil, the automotive critic for the Los Angeles Times. “But now, we’re starting to see that there were consequences.”

He says the debate over global warming, and dependence on oil-rich nations, all come back to the Model T’s internal combustion engine, powered by gasoline. And over time, these engines have only gotten bigger and thirstier.

All things considered, we prefer to celebrate freedom and prosperity and mobility than to regret the admitted consequences. In 1900, nearly half of all Americans lived on the farm, and it was a hard and spartan and constrained and oft-short life. Life’s better now.

So above you’ll find “The American Road,”* a Ford-sponsored documentary that celebrated the 50th anniversary of the Model T.  Narrated by Raymond Massey, the 43-minute film notes the freedom and broadened experiences brought by the affordable car, not to mention the industrial revolution it launched:

Everywhere you looked you saw the Model T. It became part of the American scene. It took the housewife to market. It brought the doctor to his patients in time to save their lives. It saved time and speeded up business. Filling stations sprang up by the thousands and a whole new industry in gas and oil was created.

Not only did it save time, it gave the average citizen a wonderful new way to spend the time he saved. Now, for the first time, Americans were able to travel inexpensively across their own country in their own cars and see the grandeur of their own inheritance. They could visit the great national parks, which had been created for the people, which so few people had ever had the opportunity to see. Now the whole family could get away from the noise and the heat of the city.

Freedom, prosperity, comfort, experience. What’s to rue?

* The video is available at the Prelinger Archives, here. The embedded Google version includes updated shots from the ’70s.