Recognizing the need for a new direction, the Obama administration has charged the newly-created Auto Task Force with supervising the restructuring of the auto industry. And over the past few months, the task force has been busy, making unprecedented government demands in an attempt to restore the once vital business.

Chrysler, which has been living off a $4 billion government loan, must merge with Fiat, cut debt and reduce labor costs by April 30 if it wants an additional $6 billion to stave off bankruptcy. Chrysler and Fiat are currently in negotiations.

A few weeks ago, the government requested that Rick Wagoner, long time chief executive officer of GM, resign — which he did. Now the Obama administration has given the company until the end of May to reach deals with creditors and unions to cut its costs or be forced into bankruptcy. In response, GM today proposed to shed 23,000 U.S. jobs by 2011, drop its Pontiac brand and reduce 40 percent of its dealer network.

The restructuring plan will give the Treasury Department, i.e. U.S. taxpayers, along with the United Auto Workers union, which controls the trust funds, an 89 percent stake in the automaker. Even with a plan, bankruptcy may still be a possibility, said new GM chief executive officer Fritz Henderson.

Despite the tough road ahead, Obama maintains that it is in America’s best interest to remain a viable competitor in the global automotive industry. The American auto industry “is an emblem of the American spirit; a once and future symbol of America’s success,” he recently said. Furthermore, he said, “[W]e cannot, we must not, and we will not let our auto industry simply vanish.”

Not everyone shares Obama’s opinion. Recent polls show that a majority of Americans don’t like the auto bailouts. But how can the United States maintain its leadership in the global economy if it no longer contributes to one of the largest world industries? If GM and Chrysler disappear, we are looking at economic devastation within the United States that will ripple around the world.

I know that many look at the overwhelming government spending and control to save supposed market-driven entities and say, “this is socialism.” But consider the other options. There are none. We are backed into a corner, and push is coming to shove.

Forget the fact that the United States currently produces the second most cars in the entire world behind Japan. Forget the fact that GM owns 12 of the 20 American car brands, and Chrysler three more. The fact of the matter is that the spirit of America is intertwined in cars. The spirit of freedom that our country is founded upon is exemplified in our automobiles. Are we really prepared to change our most fundamental quality or will we fight to keep our identity?

(Photo by James Allison III)

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To continue on this road, though, Obama will need to make some clutch decisions early on. We all remember what happened to President Bush’s credibility after a few questionable decisions early in his presidency. Here, while Obama’s presidency is “on hold,” the question must be asked: What should President Obama do first? 

I’ve compiled a list of three initial policies that I believe will best position Obama and America for the future. 

Initially, he needs to implement a strategy that shows immediate economic progress. We’ve been hearing recently that the economy might be hurting for a few years to come, but something must be done now to show that there is light at the end of the tunnel. We need a visible demonstration of hope, not blind assurance. That, in and of itself, will help the economy by prompting people to go about their spending habits as usual. 

Secondly, after the economy begins to show some signs of improvement, Obama should begin to tackle the problems in the Middle East. Ending a war in the middle of an economic crisis might be difficult, as it could put some people out of work, but he needs to find a way to bring troops home and give them another way to contribute such as reinforcing national security and building our homeland defense against terrorism. 

Finally, a good amount of attention should be paid to energy issues. The end of the widespread use of fossil fuels is well in sight for younger generations, so now seems like a pretty good time to figure out the next step. And what a coincidence, with the failing economy many people are going to be looking for jobs. Obama needs to figure out a way to take those people who need work and connect them to the search for alternative energy sources. That way we can solve the energy problem of tomorrow and beat the recession at the same time. 

If Obama can string together a few good ideas to solve some of these seemingly unending problems, I think he can maintain the respect of most reasonable, open-minded people. And after he gains a little congressional momentum, maybe he can tackle a couple more of the long-term problems that our generation will face, like Social Security and healthcare.

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