Made In The USA: Saving The American Brand

Enlarge David Duprey/AP

Eastman Kodak Co. headquarters is shown in Rochester, N.Y. Kodak once employed 60,000 people there, but recently filed for Chapter 11 bankruptcy protection amid foreign competition.

David Duprey/AP

Eastman Kodak Co. headquarters is shown in Rochester, N.Y. Kodak once employed 60,000 people there, but recently filed for Chapter 11 bankruptcy protection amid foreign competition.

A majestic building still dominates the skyline of Rochester, N.Y., the word "Kodak" shining brightly from the top. It's the legacy of George Eastman — the founder of the Eastman Kodak Co. — a company that helped Rochester thrive and gave it the nickname "Kodak Town."

In 1976, Kodak sold 90 percent of the film around the world. The company basically invented digital photography, but it couldn't figure out how to make the transition from film quickly enough to out-compete its Asian rivals. Of the 20 best-selling digital cameras in the U.S., not a single one is from Kodak.

Today, Kodak is barely a shadow of its former self. Earlier this month, the company that in 1982 once employed more than 60,000 people in Rochester — but now has fewer than 7,000 workers there — filed for bankruptcy protection.

Just three years ago, two other iconic American brands, General Motors and Chrysler, were on the ropes. They recovered thanks to government intervention. President Obama even made it the centerpiece of his State of the Union address, when he declared: "We bet on American ingenuity. And tonight, the American auto industry is back."

So what does it take to keep making goods in America and to save the American brand?

Saving American Autos

Before the auto industry bailout, many people in the U.S. and around the world assumed that the age of the American car manufacturer was over. And yet, one need only visit an auto show, like the Washington Auto Show that opened this weekend in Washington, D.C., to see how confident American automakers have become.

Enlarge Bill Pugliano/Getty Images

General Motors, headquartered in Detroit, recovered from near disaster after a financial bailout from the federal government.

Bill Pugliano/Getty Images

General Motors, headquartered in Detroit, recovered from near disaster after a financial bailout from the federal government.

There are hundreds of new models all across the showroom floor, and they're innovative cars in terms of their design and their prices. Probably one of the best slogans is Chrysler's "Imported from Detroit," splashed across a huge sign above the company's newest sedan.

GM and Chrysler are now expected to show their best performance since the auto crisis. On Friday, Ford posted its biggest profit in years.

No one at the auto show sounded more confident about American manufacturing than Transportation Secretary Ray LaHood. From the floor of the auto show, he told weekends on All Things Considered host Guy Raz that the return of GM and Chrysler is a "great American story."

"[The auto industry] is back because President Obama decided he was going to make an investment," LaHood says.

A few years ago, General Motors, once the largest employer in the country, was on the path to insolvency. No bank would lend them money; and so the Obama administration insisted that the company declare bankruptcy, and with a massive federal bailout, begin a massive overhaul.

Bill Vlasic, Detroit bureau chief for the New York Times, tells NPR's Raz that it was shocking to realize how much trouble GM was in at the time.

"The leadership of General Motors had resisted Chapter 11, saying that people wouldn't buy a car from a bankrupt car company," Vlasic says. "Well, that was proven wrong."

Vlasic is also the author of Once Upon a Car, a book about the auto bailout and the revival of GM, Ford and Chrysler.

Vlasic says that although they were initially resistant, once GM restructured, the company became more streamlined and focused. Part of that restructuring was discontinuing the Pontiac and Saturn brands, a tough decision for GM because of the long history of Pontiac.

"Guess what — when they closed the division, nobody cared," he says.

Considering the cost to the American tax payer: Was the bailout worth it? With job loss estimates in the hundreds of thousands if GM had been allowed to go into uncontrolled bankruptcy, Vlasic says that's still up to the American people to decide.

Humility, restructuring, tough decisions and billions of dollars to fall back on; it was enough to save American automakers, but what about smaller companies, like Kodak, in Rochester?

Vlasic says only one thing is certain: Kodak will come out of its bankruptcy a different kind of company.

"They can't expect sentiment to save them," he says. "It has to be based on their ability to compete with not just companies around the world, but companies here in the United States."

Kodak's survival will also depend on whether they can tap into their historical ingenuity and success, and come up with the kind of products that can get them back on track, Vlasic says.

Why Save American Brands?

When countries like China can make them faster and cheaper, or in many cases, as good, why does it matter whether our cameras or our cars are made in the U.S.?

Jennifer Granholm, the former governor of Michigan, tells Raz that if the nation decides that the logical choice is to stop making things in the U.S., there would be more consequences than just massive job losses.

"You'd have to deal with the consequence of a country that doesn't make anything," Granholm says. "If we rely on other countries to build the stuff that we use, then we are completely at the mercy of others. If you want to have a strong country, you have to make things."

In the new global economy, Granholm says the blind fealty to "laissez-faire, hands-off economics" no longer applies when our economic competitors are not playing by the same rules. Hanging on to that philosophy simply makes the U.S. accomplices to continued job losses to more aggressive competitors, she says.

"We have to decide: Are we going to fight for jobs or are we going to let others take our jobs?" she says. "We cannot bring a knife to a gun fight, and that's what we have done."

Hope is not lost, however, and Granholm says though the U.S. might have lost the fight for lower-skilled manufacturing, the opportunity is still there to be competitive in higher-skilled, advanced manufacturing — like the auto industry, for instance.

"We have to get in the game," she says. "The auto industry [was] saved because there was a smart, strategic, active partnership with the federal government."

To those that were willing to let the auto industry die, Granholm says that it would have made the country weaker, and we would have lost a manufacturing backbone. That philosophy, she says, would ultimately harm our nation.

Source: NPR : National Public Radio