: Big three: The wage deregulation trap is closing

International audienceThe US automakers are likely to crumble like the twin towers of the World Trade Center unless a vigorous and costly state intervention takes place sooner rather than later. Their disappearance would have the same effect on the ‘real economy’ as Lehman Bothers’ bankruptcy had on the financial sphere. After all, the Big 3 still account for one-quarter of global automobile output, two-thirds of which they produce out of North America. The fallout would be extremely painful to their suppliers and to competitors who get their inputs from these same sources, leading to the elimination of hundreds of thousands of additional jobs. Then there are all the financed sales and leasing operations that the Big Three have developed in recent years, plus the way a large part of their receivables portfolios has been transformed into derivative products. Lastly, their property holdings did not benefit from the same subprime facilities as other sectors did.The conditions underlying the American auto- mobile firms’ current situation have their origins in the distant past. It should be noted, however, that these companies also had many opportunities to escape the trap set for them by the form of capitalism that progressively took shape in the United States following Richard Nixon’s 1971 decision to let the Dollar float