The Relationship Between The NASA Space Shuttle And The Struggling Auto IndustryWith all of the talk in the news about the potential failure of U.S. automakers, many have begun to talk about the far-reaching effects of the auto industry on the U.S. economy.
Few people realize the reach of the auto industry and how integral it is to the whole of the U.S. economy. It has been said that one-of-ten jobs in the United States are connected to automotive manufacturing, sales and maintenance.
It is hard to track down with any certainty how many U.S. cities would be directly affected by the failure of a single automobile model, let alone an entire company or industry. To put the impact of the potential failure of the auto companies into better perspective, it is easier to study the economic reach of another vehicle in which we are all familiar: NASA's space shuttle.
Manufacturing The NASA Space Shuttle
Since NASA is an enterprise of the U.S. Federal Government, its employees tend to create reams of reports and make those reports available online, for the person willing to hunt them down.
While a car is not nearly as complex as the space shuttle to build, the manufacturing base behind the space shuttle is nearly as far-reaching as the manufacturing base behind the automakers.
The space shuttle program relied upon hundreds of manufacturers, located in 165 U.S. Cities in 32 states, with one component built in Canada and one other component built in Paris, France.
These manufacturers create parts as small as the screws used to hold components together, to the parts that make wings and the shuttle fuselage. But NASA projects cannot stop with the building of the flight components, since life support systems are also essential to NASA missions.
Most space shuttle components were built in California and New York, but components were also manufactured in nearly every state in the southwestern, south-central, and southeastern U.S., including: California, Arizona, New Mexico, Texas, Oklahoma, Louisiana, Alabama and Florida. Other states that filled out the remainder of the list include: Washington, Utah, Colorado, Missouri, Nebraska, Iowa, Tennessee, Minnesota, Wisconsin, Illinois, Michigan, Indiana, Ohio, North Carolina, Virginia, Pennsylvania, New Jersey, Maryland, Massachusetts, Connecticut, Delaware, New Hampshire and Vermont.
When the space shuttle building era ended in 1988, a vast number of companies had to return to the process of working in the private sector to keep workers employed.
The Coming End Of The American Automotive Manufacturing Era?
The U.S. Congress is trying hard to find ways to finance a bridge to the future for General Motors, Ford and Chrysler.
Some argue that the U.S. auto industry is handicapped by the retirement plans it had set up for employees in past decades. Whereas the U.S. automakers have large sums of money set aside for the retirement of their employees, European and Asian auto manufacturers who have set up plants in the United States do not have the same kinds of long-term financial commitments to their employees.
Financial gurus argue that the combination of retirement fund commitments and UAW contracts prevent American automakers from competing with foreign automakers on a level playing field. This is the reason why some are suggesting that the best thing that could happen to GM, Ford and Chrysler is to go under, and have other companies pick up the broken pieces of these legacy auto companies to start again from scratch.
But as shown in the NASA space shuttle example, the effects of this outcome will have far-ranging and deep effects on the stability of the U.S. economy.
Perhaps failure will be good for the auto business, but it seems likely that Congress and the soon-to-take-office President Obama will prevent this from happening.
The greater question for General Motors is whether they will be able to survive until January 20th, when Obama takes the reigns of the country from George W. Bush. It is rumored that GM only has enough cash on hand to keep them afloat until December of 2008.
My gut tells me that it may be a bad idea to let any American automotive manufacturer fail. My gut tells me that the Chrysler bailout of the 1980's proved to be a good investment that the U.S. taxpayer eventually got back with interest paid.
But my gut also tells me that it is a bad idea for the U.S. government to be in the business of bailing out every company with a hand extended to Congress. Maybe it would be best to let the carmakers fail, so that whatever company rises from the ashes could compete with foreign automakers on a level playing field.
In the end, whether Washington D.C. comes to the rescue of the automotive industry, in time or not, America will survive and eventually thrive once again.