Chris Trotman/Getty Images for NASCAR
NASCAR Chairman Brian France has been more than an interested bystander in the recent debates in Washington over the bailout of the U.S. automotive industry. France runs America’s premier auto racing series and his race teams are heavily dependent on financial and technical support from Ford, GM, and Chrysler-owned Dodge, commonly referred to as the Big Three. But to simply say France supports the bailout does not begin to explain the complexity of his situation.
Like many who hail from the South, where NASCAR has its roots, Brian France and the France family openly lean Republican. The auto-industry bailout is largely supported by Democrats, who control both the House and Senate (not to mention the White House, come January 20th). Many of the bailout’s opponents are congressional Republicans from the South, where foreign automakers have opened numerous manufacturing facilities. Herein lies France’s problem: NASCAR needs this bailout or all three U.S. manufacturers participating in NASCAR may be forced out immediately (the exception being Toyota, who is also in NASCAR but not in financial trouble).
So what does a good southern Republican do when your friend is your enemy and your enemy is your—well, not your friend either? You get creative, which is exactly what Brian France did.
France jumped in with both feet this week when he sent a letter to key U.S. Senators asking them to consider all the ramifications of a failure of the U.S. auto industry. The text of the letter claims that if the Big Three are not bailed out by U.S. taxpayers, it will cost 5.5 million U.S. jobs, personal income will drop by $150 billion and, according to the Associated Press’s reading of the letter, “domestic automobile production—even by foreign manufacturers—would likely drop to zero.”
Say what?
France’s claim that even foreign manufacturers’ operations in the U.S. will not survive unless U.S. manufacturers receive a bailout adds a new twist to the debate. It also conveniently solves France’s biggest problem – Southern Republican senators that don’t support the bailout. France is essentially telling them to get on the bailout bandwagon and start supporting taxpayer subsidies for Detroit, lest their state’s foreign-owned automotive businesses dry up too.
The basis for France’s argument comes from comments made this past weekend from Nobel Prize-winning economist Paul Krugman, who speculated that the U.S. auto industry will disappear because of “geographical forces.” The Princeton University professor and New York Times columnist told reporters in Stockholm that the U.S. auto industry “is no longer sustained by the current economy.”
France apparently saw the economist’s comment as the perfect way to convince Southern Republicans, so he wrote them all a letter saying they too have a lot to lose if the bailout is not approved. The problem is that Professor Krugman is saying the U.S. automotive industry is destined to failure for purely fundamental economic reasons regardless of whether or not they receive a massive bailout. Brian France is making a lame attempt to spin Krugman’s statement into an argument for the bailout, while Krugman is actually making an extremely strong argument against any bailout. In fact, Krugman goes on to say that U.S. lawmakers’ consideration of a bailout is only due to their “lack of willingness to accept the failure of a large industry in the midst of an economic crisis.”
To make the point even more absurd, France’s leap-of-faith letter to Senate leaders argues that the foreign-owned U.S. automotive manufacturers should support a massive government subsidy to their competitors so that everyone survives. Is he kidding?
Washington may not be the most intellectual place on the planet, but the people who are trying to get us out of this economic mess are dead serious. The meeting rooms for considering the bailout of the U.S. auto industry are not places where “spin” does any good and the only thing Brian France’s letter is doing is creating less space in Capitol Hill’s trashcans.
Chances are good that Brian France and NASCAR will get their wish and the U.S. automotive industry will get some sort of a bailout, though it will likely come with alternative-fuel research and investment strings attached. Perhaps the next time NASCAR feels compelled to send letters to senators, hopefully it will be to explain how they are embracing alternative-fuel race cars and doing their part to lead America’s automotive manufacturers into a more responsible and sustainable future.
