White House Surrenders on Auto Industry

Why are President Clinton and Vice President Gore so frightened by the automobile industry that they are fleeing their lawful duties in the areas of health, safety and energy policy?

Look over the scene. The federal auto safety agency (NHTSA) has never been more moribund. It is asleep at the wheel in not upgrading obsolete vehicle and tire safety standards, not issuing new standards to reflect available life-saving technology, not toughening bumper protection rules to save your insurance premiums nor doing anything on fuel efficiency research. The NHTSA has abandoned its statutory duty as a regulatory agency and has become a consulting firm for Detroit under Clinton-Gore.

Over at the Environmental Protection Agency (EPA) the auto industry lobby, while reporting record profits, is battering EPA on long overdue air pollution regulatory enforcement and, making sure that there is no effort there to do something about the abysmally wasteful fuel behavior of the internal combustion engine. The energy crisis is still here and oil imports are at a record. Though supplies are plentiful and prices low, the conditions for the next squeeze are still untreated by the auto moguls.

At the same time, the domestic auto companies are relentlessly exporting their factories to Mexico, Brazil and other nations where the top wage is $2 an hour or nearly one tenth the wages plus benefits of UAW workers here. The auto executives claim it is necessary to replace American workers with Mexican workers to meet the global competition. Yet these same bosses never replace themselves and their multimillion dollars a year compensation with capable $200,000 a year Brazilian management, for example.

On the contrary, the bosses are jacking up their massive pay packages to unheard of and undreamed of excess.

Take the “incentive” pay grab by Chrysler Corporation Chairman Robert Eaton who just sold the company to Daimler-Benz AG in Germany. As co-chairman of Daimler-Benz, Eaton will receive a cash outlay of $3.7 million, 628,277 Daimler-Chrysler shares valued at $66 million and an additional bonanza of 2.3 million shares to replace his old Chrysler stock options.

In July those Daimler-Chrysler shares were worth about $239 million. In total, Eaton would make about what 9000 Chrysler workers together would earn. In the 1970s, by comparison, the auto chiefs made about 40 times the entry level worker’s wage in their company.

Just to cover all his leases, Eaton negotiated one last final goodie. If he is fired on the day of the merger, expected to be formalized in a few weeks, he would receive an additional lump sum payment of $24 million!

Against the background of regulatory defiance, abandoning the country and overweening avarice at the top of the auto companies, Albert Gore trots out to Detroit a few months ago to give a speech that was designed to curry favor with the top executives.

Instead of Clinton and Gore performing their ‘law and order’ responsibilities that they are sworn to uphold for the interest of the American people — safer cars, cleaner air, more economical vehicular travel and energy independence, the two politicians cower and grovel. Not even statements or addresses exhorting the industry to more responsible heights have come from the White House. A more abject surrender to the auto industry has not occurred since federal authority over these companies was established in 1966.

If in the midst of year after year of record output and profits, Clinton and Gore choose not to get this stubborn industry to liberate its engineers to build vehicles that could proudly cross the bridge to the 21st century, we can only imagine what the White House would do if the auto companies get themselves into a recession — such as repeal of safety rules, taxpayer funded corporate welfare and who knows what else?