The national industrial base, including the auto industry, provides more than jobs. It is critical that the nation maintain the knowledge and capabilities to create autos, planes and so on. Such knowledge and capabilities are almost impossible to replace, and losing them puts the security of the nation at risk.
Intense pressure by Wall Street has encouraged indiscriminate cost-cutting - and, in some cases, criminal accounting practices - just to meet or beat analysts' expectations. This shortsighted mentality sacrifices long-term, strategic decision-making for a short-term win on the Street.
Globalization for its own sake is not viable public policy. Yet it is nearly impossible to separate the national industrial base from the global one and the defense base from the national one. It's all one system.
When we outsource much of our foundry capability to China, it's conceivable that we become dependent on the Chinese for our country's parts as well as the innovation and technology that go along with producing them.
Global purchasing organizations in much of U.S. industry and the military are not looking sufficiently at the newly emerging risks of potential disruption of supply lines.
Economic and political risks are not always calculated by purchasing organizations. Purchasers tend to be rewarded only for getting parts cheaper.
In a global economy, the rules of engagement are different. They can hurt as easily as help. When foreign companies have government assistance, from r&d to health care and pensions, U.S. competitiveness is at risk. That can lead to the inability of a U.S. industry, such as autos, to survive.
Both Republicans and Democrats must address this issue. If the nation cannot put some balance into its globalization policies and invest in U.S. manufacturing capability, America's ability to lead will be in jeopardy.
The global competitiveness of the U.S. auto industry is related to the national security of the country. Its problems become national problems requiring national solutions. Dialogue and cooperation between the auto industry and Congress are essential and must accelerate now.
The University Group Inc. is a consulting firm on global competitive issues investigating ways to improve the U.S. industrial base as a contractor to the U.S. House Small Business Committee.