It's a convenient American stereotype: Detroit makes cars, Dixie races them. But as the entire tortured debate in Washington over whether to bail out the ailing U.S. auto industry has shown, that distinction is as tired and broken as the Big Three's business models. In fact, the political game of chicken that ended Friday with President Bush announcing a temporary $17 billion aid package for GM and Chrysler to stave off the immediate threat of bankruptcy has shown the rest of the country what the South has known for years: led by foreign carmakers like Toyota and Mercedes-Benz, Dixie is now Detroit's rival in auto production.
And the foreign automakers based in the South, who account for almost a third of all cars built in the U.S., have now become the benchmark against which the Big Three are measured. As the various aid packages were being negotiated, first on Capitol Hill and then this week on the other side of Pennsylvania Avenue, one constant condition Republicans insisted upon was Detroit getting its wages and benefits down to the levels of the so-called transplant workers in states like Alabama, Tennessee, Georgia and Mississippi.(See pictures of the remains of Detroit.)
It was the clearest sign yet that the auto production boom has given the South not just a much-needed industrial boost but new political leverage as well.
When Southern politicians like Alabama Senator Richard Shelby blocked a $15 billion congressional bailout for Chrysler and GM, they gave their constituents something just as valuable as pork: some regional self-esteem, if not outright revenge. The Big Three automakers, Shelby insisted last week, "have basically failed" because of their bloated, rigid and outdated manufacturing methods, while the South's lower costs and more flexible management schemes are the new exemplar.
"Shelby is defending the industry model of his state," says Merle Black of Emory University in Atlanta, a southern politics expert. "A lot of southerners feel they've been talked down to for a long time by northern industry, so he doesn't lose any votes by doing this." Jason Ray, who has worked for both Mercedes and Chrysler in Hunstville, Ala., says the Big Three "have engineered a doomsday scenario where if they aren't allowed to continue being irresponsible with money, including the billions from taxpayers, the U.S. economy will crash. American automakers need to learn to grow with the times or become obsolete."
More than a few northerners feel the South supposedly the last bastion of red, patriotic values is being hypocritical by bending over backward for Germans and Japanese at the expense of U.S. companies. To make the point, a retired GM engineer this month set up a website called boycottalabamanow.com. But southerners ask who the hypocrites really are. "When the textile industry went down in the South and we were accused of being behind the times, we didn't ask for a bailout we just had to reinvent ourselves," says John Jeter, a South Carolina author whose family owns a small chain of auto parts stores and whose new novel, The Plunder Room, examines the modern southern character. "So southerners feel it takes some audacity for northern businessmen who make millions to come holding out beggar's bowls for billions."
Not that southern sages like Black approve of an industrial civil war. "We're all in this recession together," says Black, who like many others is quick to note that Detroit's collapse isn't exactly good for the South, especially given the large number of auto parts production jobs that rely in part on the Big Three.