Letter to the Editor

Automotive downturn not just Detroit's problem

Thursday, December 11, 2008

U.S. Rep. Adrian Smith makes some good points in his statement to explain why he voted against the auto company bailout, which passed the House 237-110, and now involves "only" $14 billion for two companies.

"Every American and every American town is struggling," Smith said in a release. "We need to enact policies which truly benefit every town, not just Detroit."

While it's true Detroit automakers need to revamp their business practices, and are at a disadvantage in competition with younger companies because of the burden of pensions for retirees, it's doubtful the government oversight required by strings attached to the loan is the answer.

And, Smith is right that it's dangerous to continue bailing out private institutions rather than letting the market take its course.

But we have to question the idea that this is only Detroit's problem.

Anyone keeping up on Nebraska news, even in the 3rd District, must realize just how much of an impact reduction in auto production has out here on the Plains.

In 2006, there were nearly 8,500 jobs in the transportation equipment manufacturing sector, according to the U.S. Census Bureau, many of them in outstate Nebraska.

But those have been disappearing.

Most recent is the layoff of 29 people at Tenneco's Cozad plant, where shock absorbers are manufactured. Tenneco already shut down plants in Indiana and Ohio, and the remaining 470 Cozad workers don't know whether it will be their facility or plants in Hartwell, Ga., or Kettering, Ohio, that will be the next to go.

The Parker Hannifin plant in McCook recently laid off 24 workers in addition to 28 who took voluntary layoffs. The company, which produces hose and rubber compound in McCook, is heavily involved in the automotive industry, manufacturing O-rings, packing and shielding as well as hose.

While Baldwin Filters, which manufactures oil, air and fuel filters for engines, announced a $20 million expansion and 50 additional jobs in Kearney, the Eaton Corp. nearby, which manufactures valves and gears, has cut more than 100 jobs over the past year.

Those are just a few of the examples of parts suppliers around the state that would be affected by a collapse in the auto industry.

That doesn't count hundreds of new car dealerships around the state that might lose their franchise because of restructuring, even if the American car producers survive.

It may or may not be wise to bail out American auto makers, and even if the current package passes the Senate, it may succeed only in shifting the problem to the new administration.

But one thing is for certain: It's not just Detroit's problem.

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  • I only want to comment on the following quote from the article.."While it's true Detroit automakers need to revamp their business practices, and are at a disadvantage in competition with younger companies because of the burden of pensions for retirees"....This may all be true, however, those retirement accounts were paid for years ago and should be intact today. If the auto makers have been useing the retirement funds for operating capital(or anything other than retirement) they should be prosecuted for it.Retirement funds are not only for the good of the workers, but like state compensation in most states is for the protection of the company.

    Bailout is not the answer in my opinion. Restructuring and management change may be a step in the right direction. If GM had kept Ross Perot on the board and followed some of his advise they would not be in the fix they are now.

    -- Posted by johncmorris on Fri, Dec 12, 2008, at 12:11 PM
  • You make a very good point. Mr. Smith must not know that Parker has laid off a shift here in McCook, Cozad has laid off a large number of people in their shock plant. But evidently Mr. Smith does not know that McCook and Cozad are in the 3rd district, which he is supposed to be representing. He instead decides to tow the party line and vote as the republican party tells him, same goes for the 2 other bozos that the state has in the House. If people think times are bad right now with the recession, just let the auto companies go under, it will then be a depression. If we can waste billions in Iraq, and throw billions at the finiancial outfits, we sure as the devil can throw a few billion to the auto companies. But I'm sure the republicans can smell blood right now, they figure by letting the big 3 go under they can bust the UAW, they should forget their hatred for unions and help Detroit, Cozad and MCCOOK, by giving the big 3 the LOANS they need.

    -- Posted by goarmy67 on Fri, Dec 12, 2008, at 12:15 PM
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