As Congress considers a plan to boost auto sales known as “cash-for-clunkers” (a plan with the dual purpose of stimulating the domestic auto industry while simultaneously replacing old vehicles with more efficient ones), the CEO of Volkswagen of America, Stefan Jacoby, is complaining that imports should get a piece of the action.
The bill with the most backing in Congress would limit incentives on new vehicles to only those built in North America, with extra money for those bolted together in the United States. It’s a key reason the bill has the backing of GM, Ford, Chrysler and the UAW.
Jacoby — whose company imported 59% of what it sold in the United States last year — said limiting federal aid to domestic vehicles would be counterproductive since it’s a global industry facing worldwide problems.
This “global industry” he speaks of is one in which everyone has free access to the American market while American-made autos are virtually excluded from the rest of the world, either by design or because so many of these foreign markets are so badly emaciated by over-crowding and low per capita consumption that even their own automakers have difficulty selling cars there.
The American version of the “cash-for-clunkers” plan was inspired by a very successful, similar plan in Germany. That plan had no requirement for the cars to be built in Germany. But then, why should it? German automakers dominate, with 68% of the German market. Naturally, the majority of German taxpayer money used to fund this program will boost their domestic auto makers.
But that’s not the case in the U.S. where the domestic share of the market is down to less than 50%. Why should U.S. taxpayer money be used to predominately boost the economies of foreign auto makers? Hasn’t the U.S. auto market been tilted in favor of imports enough already? Not for Jacoby. He warns:
“We are not going to solve the global economic crisis by creating global trade barriers,” he said. “There would be other countries immediately answering.”
We’re not trying to solve the global economic crisis, Jacoby. We’re trying to boost the American economy. If you want to boost the German economy, then do what you have to do. It’s not our responsibility. And about those “other countries immediately answering,” I say go ahead. In fact, let’s just take it to the max right out of the box. You bar American cars from being imported to Germany and we’ll bar German cars from the American market. Let’s see who gets the dirty end of that stick.