We members from Michigan are often criticized for our strong defense of the domestic auto industry.  It cannot be denied that the domestic auto industry is crucial to the economy in Michigan, but others fail to understand how critical this industry is to our national economy and our national security.  Some say, ‘go ahead and let the car companies fail, let the market work’ or ‘they did it to themselves so let them fail.’  These ideas fail to take into account the impact on our broader economy, the impact on our national security and the human toll exacted by inaction.

 

If the Big 3 were allowed to fail the economic impacts will be immense.  The possibility exists for the loss of nearly 240,000 jobs directly tied to the auto companies and nearly 1,000,000 jobs indirectly related from suppliers to the industry.  Even worse is the potential of up to an additional 1.7 million jobs lost as result of lower economic activity.  Nearly 3,000,000 American jobs are at risk right now and our national unemployment rate could jump from 6.5% to over 10% from the collapse of the domestic auto industry. 

 

While one must weight the cost of supporting the industry, one must also weigh the cost in not supporting the industry.  Increased federal costs associated with massive unemployment payments.  Increased federal costs if pensions are thrust onto the PBGC.  Increased federal costs of health care that workers now receive from the companies that would be borne by Medicaid and other federal programs.  These potential costs are simply staggering if we take no action.

 

In addition our nation will lose the pillars of our manufacturing base.  The manufacturing base that during World War II was known as the Arsenal of Democracy because we had the manufacturing capability to build the armaments that led America to victory and peace.  If we allow our manufacturing base to fail it will be a serious blow to our national security because once it is gone it will not return and we will no longer have the ability to mobilize it to defend our freedom during times of national crisis.  America would then be dependent upon foreign companies and foreign nations to build the weapons with which we defend our freedom.  I am not willing to take that chance.

 

One must also remember that the terrorists who struck our nation on September 11, 2001 had the goal to destroy our economic system.  In response it was the auto companies that stood up with the “Keep America Rolling” program led by General Motors.  They offered innovative financing that kept buyers in the showrooms and workers on the factory floors.  They played an incredibly important role in keeping our economy from collapsing and denying the terrorists one of their clear objectives.

 

Many are pointing fingers of blame at the industry and saying that they got themselves into it and they can get themselves out.  If we do not take action to support this industry the companies will not be the main victims of our inaction.  The victims will be the people in a wide swath of our country in the industrial Midwest where communities have already taken many blows and indeed across our entire nation.

 

Our region has been hit with a category five economic hurricane.  And just as the American taxpayers, including those in Michigan and the industrial Midwest, stepped up with billions upon billions of dollars for the communities victimized by Hurricane Katrina, the federal government must step up in this case.  And we are not asking for a handout.  We are asking for loans that will be repaid.  And in addition to receiving repayment on those loans, America will also benefit from a revitalized industrial base that will deliver the next generation of American built, advanced technology and fuel efficient vehicles that will reduce our dependence on foreign energy.

 

Nobody likes the action we must take but we must act now because inaction will have consequences of untold damage to our entire nation that we will regret for generations.