Many blog readers say they're opposed to the government bailout of the Big 3 automakers -- let them go under, or file for Chapter 11 and rebuild from there. I recognize that many of the automakers' problems are self-inflicted, but I still feel that the industry is far too important to risk. (If it makes the critics feel any better, I think any discussion of a government bailout of the newspaper industry is completely ridiculous). A Page 1 story in today's Wall Street Journal helps to make my case. It looks at a string of companies along the Ohio Turnpike, focusing on how the auto industry has helped suppliers to innovate -- which in turn has helped many other industries. Thomas Klier, a Federal Reserve Bank of Chicago economist, tells the paper: "What you see with the auto industry is that it's driving a lot of technologies in the background, like machine-tool makers, that enable a large part of the economy to advance." The story has a plastics angle: one of the companies quoted is Prospect Mold Inc., a Cuyahoga Falls, Ohio, toolmaker. Here's an excerpt_
Prospect is best known for producing molds car makers use to form taillights. Sitting in one corner of its factory is a stack of 14 huge steel molds, representing a taillight assembly for a new model for GM. But Prospect recently was told the project was delayed. Luckily for Prospect, over the years it has used its auto-industry base to diversify into making molds for other industries, as well as into machining finished metal parts. The pressure from auto makers for greater precision and complexity led Prospect to develop skills it now uses to supply other industries that demand precision. One of them is aerospace. "I can't imagine someone opening up a shop and saying: 'I'm going to do aerospace,'" says Brandon Wenzlik, vice president of engineering. "All those years of developing our capabilities and acquiring technology -- that's what makes all this other stuff possible."Still, the story quotes two economists who, while recognizing the importance of the auto industy to supplier innovation, dispute whether that's a good enough reason to bail out the Big 3. I have a feeling that some blog readers who don't support bailing out the Big 3 still might recognize the importance of the Tier 1 and 2 auto suppliers.