Who’s to Blame for U.S. Auto Industry Problems?

What a remarkable country this is. Where else would a government prepare a position paper against its own tax-paying industry in favor of foreign freeloaders.

By use of clever, and largely bogus, subassembly and parts transfer pricing and exaggerated shipping and insurance costs, foreign “transplant” operations avoid paying federal taxes and in several states they pay few local taxes either.

With such incentives is it any wonder that transplant automobile operations can afford to drive domestic manufacturers into the ground?

We have already witnessed the demise of the U.S. consumer electronics industry, our machine tool industry is now down to about 25% market share, the U.S. banking industry is no longer a factor in world commerce (there are no longer any U.S. banks among the world’s top 10)--so why try to save the nation’s automobile industry? The Treasury doesn’t seem to mind the tax losses, it just runs a larger budget deficit each year.

If I were Lee A. Iacocca, I would seriously consider folding Chrysler. It would be far more honorable to voluntarily cease operations than to be forced into bankruptcy like so many other American corporations. Chrysler dealerships could be readily converted into Mitsubishi outlets and Chrysler plants could be used as housing for the homeless.

Our government is firmly in the grip of consumption-first economists. They prefer to have Japan establish industry policy for the world than to have to deal with the issue themselves.

A. DANIEL ELIASON

Santa Barbara