obama, chrysler, fiat (part iii)
I got a little closer to my new car when a deal was announced today, under which Chrysler will file for bankruptcy but FIAT will nonetheless commit to provide it with new technology and one or more new models in return for a stake in the company. For an outfit that sometimes gets laughed at, FIAT is pretty smart: the Italians got their stake without putting down a single dollar in cash.
Together with FIAT the deal demonstrates that Obama, whatever one thinks of his policies, is a lot smarter than his opponents give him credit for. As the NY Times reported, the increasing desperation of Chrysler, GM, etc. is bad news for their shareholders, but good news--albeit of a bittersweet type--for the automobile unions, which are currently acquiring a larger and larger financial interest in the (admittedly shrunken) companies. In other words, the Administration is using the auto crisis as an opportunity for a significant if forced experiment in worker ownership, a longtime goal of progressive politics in the U.S. and other countries. While the companies may fail, there is at least some chance they'll succeed, and become a model for similar arrangements in other sectors.
That's the good news. The bad news is that unions have a historical tendency to make advances in industries just as they start to decline, a history that FIAT knows something about. In his excellent history of postwar Italy, Paul Ginsborg notes how the Italian unions achieved unprecedented power following strikes at FIAT and other Turin-area employers in the 1970s, only to see FIAT (and indeed the entire Italian economy) hit hard times and gradually break the unions' power in the ensuing decades. In this case, of course, Chrysler would appear to have already bottomed out . . . but things can always get worse.
Well, if I can't get a FIAT, there's always a Toyota Prius, which at least sounds European. But the Times reported today that its workers are seeing hard times, as well. Does anyone have a used Volvo?