The war in the auto plants never ended. It flared up and died down, but it never ceased. Management and labor circle each other like sumo wrestlers searching for an opening. Like any war, it ignores honesty, human dignity and common sense. Like any conflict, it leaves collateral damage.

As a supervisor at Ford Motor Company’s largest transmission plant, I fought on the front lines. Despite leaving the auto company many years ago, the factory skirmishes were a key factor in the industry’s disastrous decline in the 1980s, and likely continue to play a part in the failures of the industry today.

The factory foremen had one big gun: Form 4600. It was the stepwise disciplinary tool that could take an employee up the punitive ladder to termination. Many supervisors rose in the management ranks not because of job performance, but by virtue of their 4600 tally. The auto industry rewarded tyrants rather than qualified managers with integrity and an ability to successfully lead.

The UAW arsenal easily outgunned management. Production was sabotaged. Critical employees were absent when high production was most needed. Tools mysteriously disappeared. Bad quality was run purposely. The weakest, least desirable employees were protected with the full power of the labor contract. When management and the UAW stood eyeball to eyeball, management always backed down – they had too – productivity and profitability hung in the balance.

The Ford factory was operated by two warring gangs. Clearly, this business model is doomed for failure.

The spark that ignites the factory battles is ever changing, but the underlying philosophy “us against them” remains the same. Foremen lead by oppression, intentionally making the work environment as uncomfortable as possible for the hourly employees. They justify these conditions with high salary. The UAW fights back the only way they can – production sabotage.

My time in the trenches still haunts me. One particular occasion I was assigned the task of scrutinizing a single employee’s every move for an entire eight hour shift. My only assignment was to nail him with something, anything, by the end of the day. The orders were clear. At the end of the shift someone would lose their job – it would either be him or me. What good was a supervisor who could not nail one single employee after observing him for eight hours?

Like a voyeuristic watchdog I was expected to follow the man to the rest room, noting how long he took to relieve himself, hand count and record his hourly output, follow his every move…

One employee brought his snub nose .38 to work with the explicit intention of murdering me. Fortunately he was so drunk that he left the gun under the seat of his car, and fell into a drunken stupor at his work station. The UAW saved his job despite repeatedly showing up for work intoxicated.

There were the regular bathroom sweeps – teams of supervisors and security guards periodically raided restrooms to ensure nobody was resting. Anyone caught not standing at a urinal or sitting on a commode was slapped with a 4600 disciplinary form.

The Coffee Pot War during the midnight shift was particularly noteworthy. Management confiscated and held hostage the only coffee pot available to the hourly employees, reportedly because they were taking too many breaks. This ill-conceived plan was designed to punish the workers and increase productivity. Things quickly turned sour. Machines stopped running properly. Production dropped. A critical tool that was needed for all the machines went missing. Squads of supervisors and security guards raided lockers, searched cars in the parking lot, and overturned trash cans. Foremen and UAW committeemen screamed in each others faces. Production came to a standstill. The critical tool could not be found.

The Coffee Pot War raged for days. Bleary eyed supervisors, fighting fatigue, faced the possible shutdown of assembly plants in four states because they were running out of transmissions. The foreman of that department had a nervous breakdown, and was carried out of the plant by mental health workers. In desperation, management returned the coffee pot. Within a few hours the missing tool showed up as mysteriously as it had disappeared. Production returned to a normal level.

These never-ending battles on the factory floor ushered in the quality control nightmare of the 1970s that caused 33 states to pass “Lemon Laws” designed to protect American car buyers from the Big Three. The wars destroyed confidence and trust in American built cars, which marked the beginning of the end of the U.S. auto industry. It opened the door for smaller, weaker, less experienced foreign auto companies to come to our shores and beat us at our own game. The wars drove the final nail in the coffin of Detroit.

As disastrous auto sales figures for November were reported this week, the Big Three auto companies–GM, Ford, and Chrysler–told Congress that they want government loans to keep from going bankrupt.

The pleas of General Motors and Chrysler were the most urgent.  Ford allowed that its cash position was better and that it might get through 2009 without tapping the federal line of credit it seeks.

The Big Three, who less than a generation ago dominated the car business, submitted business plans on Tuesday ahead of scheduled hearings before the Senate Banking Committee on Thursday and the House Financial Services Committee on Friday.

Should Congress authorize the requested loans of $18 billion to GM and $7 billion to Chrysler, and a $9 billion line of credit to Ford?  How far should taxpayers go to rescue an ailing industry?

In their business plans, the three said that they would change their model mix and drop some brands, shrink their workforces, and consolidate and retool plants.

Unfortunately, neither loans nor the companies’ promises address the basic problem:  Americans just aren’t buying cars, whether GM, Toyota, Ford, or Nissan.

Consider the November sales data, showing GM ’s sales down 41% from a year earlier, Ford’s down 30%, and Chrysler’s down 47%.  Foreign brands were hurt, too: Toyota down 34%, Honda 32%, Nissan 42%, Hyundai 40%.

It’s not that Detroit isn’t making good cars. Although GM has offered to drop its Pontiac line in exchange for government loans, Americans like Pontiac.  It’s GM’s third best-selling brand, with U.S. sales comparable to VW, Mercedes, and Mazda.  The idea that former Pontiac consumers will just switch to Chevys doesn’t make sense.

And the Big Three are healthy abroad.  Most sales of Ford and GM cars are made overseas.  GM sold 1 million cars in China last year, including 300,000 Buicks, and over 12% of vehicles sold in Russia.

Detroit’s costly labor structure is a handicap that needs to be overcome through negotiation with unions or with reorganization in bankruptcy.  But even foreign brands, with their lower labor costs, are unable to sell cars in today’s environment.

Until American consumers feel confident enough about the economy and their own finances to fill up dealer showrooms, the huge sums under discussion on Capitol Hill would be money wasted, merely postponing the inevitable bankruptcies of one or more companies—even though House Speaker Nancy Pelosi says that bankruptcy is not an option.

Potential buyers can’t get credit—and most new cars are sold on credit.   In October, GMAC, the credit arm of GM, began to require a higher credit score to qualify a potential customer for a loan.  According to GM, half of its sales decline in October—no word yet on November–was due to GMAC restricting its lending, costing about $1.4 billion a month in cash flow.

Congress needs to work on thawing out the credit market—and not just for autos but also for housing and other products.  Until that happens, and it could take many months, if the lawmakers believe that the auto industry deserves special help, members could simply give Americans money to buy cars.

This could be done in several ways.  The government could guarantee no-interest financing on cars—and itself pay lenders the cost of credit.  It could issue vouchers worth thousands of dollars a car to consumers. Or, it could award tax credits to buy cars, as it did with the Toyota Prius.

All of these incentives might cost the taxpayers less, depending on amounts and duration, than giving money directly to the automakers, and could be rolled back as the economy strengthens.

So, rather than lending $25 billion to the Big Three, here’s another idea.  Take the money and give consumers incentives to get into the dealer showrooms—and tell them to go car shopping for Christmas.

General Motors Corp. could run out of cash by January without help. Ford Motor Co. and Chrysler LLC also need fast government intervention to stay solvent. Automakers and the UAW are making their case to Congress this week for emergency help. But even the supporters of a $25 billion aid package for the auto industry are dubious about whether they have the votes to pass it.

This raises the question, why not just let them go bankrupt?  The domestic auto industry is everyone’s favorite whipping boy, and its problems have been growing for decades. Some are of its own making; many are circumstantial. But we cannot blithely accept its failure as somehow inevitable or deserved.

Our economy has been badly battered in recent months, and has become increasingly fragile. The erosion of our industrial base already presents real security risks to our nation. Why would we accelerate this sorry state of affairs at a time of national crisis by sitting on our hands and letting a signature American industry collapse?

The American auto industry is well worth saving, for many reasons.  One reason is that for the past decade Detroit has made heavy investment and steady progress in improving its competitiveness, what it calls “altering the DNA” of American cars.  US automakers spend $22 billion annually on plants, equipment, research and development. Breakthroughs are at hand in developing alternative fuel propulsion systems, and our national well-being and security depend upon seeing them through to completion.

If we allow U.S. automakers to go under out of anger, resignation, or ideology, it will only mean all the work and investment of the last decade will be ceded to our foreign competitors instead of being plowed back into the U.S. economy.

Another reason is the industry’s importance to the job market and the wider economy.  Automobile manufacturing directly employs a quarter of a million workers and indirectly about one in ten U.S. jobs are related to some degree to the automotive sector, according to GM estimates.  So the effects of a collapsed U.S. auto sector would not be limited to Detroit – they would be magnified as the ripples spread to related industries.

If we allow U.S. automakers to fail, millions of retirees depending on auto company pensions will be at risk and auto manufacturing jobs will disappear. The ripple effect won’t end there; millions of jobs in related sectors, such as  U.S. manufacturers of steel, aluminum, iron, copper, plastics, rubber, electronics, and computer chips, will also feel the pain.

Worse yet, the promise of a meaningful future for American manufacturing would fade. As that promise dims, the role played by manufacturing jobs as a passport to the middle class would likewise disappear.

The auto manufacturers did not cause this crisis; they were working hard to reinvent the quintessential American invention when high oil prices and economic upheaval hit, dragging them into the vortex. There is a tendency to think that an example must be made, that someone must be allowed to fail.  But do we really need to cut out of the heart of the real economy? When the patient is in the middle of a full blown coronary, it’s no time to discuss lifestyle changes.

We can and should revisit subjects like executive pay scales and expense controls when the industry isn’t at death’s door.  For now, we should recognize the gravity of the moment, and use the TARP funds and pass necessary auto-related financial stabilization legislation to avoid digging a bigger hole for the national economy.

The domestic automobile industry has two major components—the Detroit Three and the Japanese, Asian and European transplants that also assemble and source components in the United States and Canada. Both contribute importantly to the vitality of our national economy. Ensuring these companies have the means to compete globally is vitally important.

The gradual erosion of the market shares of the Detroit Three over the last several decades stems from higher labor costs—having origins in wages, benefits and work rules–poor management decisions, and less than fully supportive government policies. Although the U.S. government has been sympathetic to the needs of the industry, the industry has fallen victim to currency manipulation and other forms of protectionism in Japan, Korea, India, and China.

The Detroit Three are rapidly running out of cash and face filing for Chapter 11 reorganization. It would be better to let them go through that process and reemerge with new labor agreements, reduced debt and strengthened management that would permit these companies to produce cars at costs comparable to those enjoyed by their Japanese and other foreign competitors assembling vehicles in the United States.

Circumstances are dramatically different today than in 1979 when Chrysler received assistance from the federal government. In those days, the challenge at Chrysler was to become competitive with Ford and GM, and Lee Iacocca had a clear plan to achieve that objective and succeeded. Today, the Detroit Three, though improved in productivity and with lower labor costs thanks to concessions from the United Auto Workers, are still not as competitive as the Japanese transplants.

Margins in automobile manufacturing are thin and there is no such thing as being competitive enough. Either a company is competitive or it is not—either it accomplishes the cost structure enjoyed by Toyota and Honda, operating in the United States, or it will continually cede market share and run into financial difficulties.

By assisting the Detroit Three, Congress can delay one or all of them going through Chapter 11 reorganization but sooner or later one or all will face reorganization. The communities and suppliers dependent on these companies would be better off going through that process now than by delaying it with assistance from the federal government.

Without a new labor agreement that brings wages, benefits and work rules in line with those at the most competitive transplant factories, and without reduced debt and other liabilities, the Detroit Three will continue to lag in product innovation and field too few attractive new vehicles, because their higher costs, debt and other liabilities require them to spend less on new productive development than they should. Also, they are inclined to field products with less desirable content to compensate for higher costs.

As consumers find vehicles made by Japanese and other transplants more attractive, like those imported from Korea and eventually from China, the Detroit Three will cede market share of one or a few percentage points each year.

If Chapter 11 is put off, the successors to GM, Ford and Chrysler that emerge from a bankruptcy reorganization process will be smaller and support fewer jobs than if these companies endure this difficult transition in 2009.

More jobs can be saved among GM, Ford and Chrysler and their suppliers if bankruptcy reorganization is endured now than in the future.

When Americans buy automobiles from the Detroit Three, more is contributed to the vitality of the U.S. economy than when Americans buy vehicles assembled here by transplants or imports. These vehicles have more U.S. content in terms of jobs, engineering and profits than do foreign nameplate vehicles.

The Congress could take steps to improve the attractiveness of making cars and parts in the United States by improving the public policy environment. This would include finally addressing, directly and forthrightly, undervalued currencies in Asia—currencies kept cheap by intervention by foreign monetary authorities in China and elsewhere. In addition, assertive efforts to develop fuel efficient vehicles could strengthen the industry and create export strength.

For example, Congress could offer an incentive for car buyers to trade in their gas guzzlers—the newer and the bigger the clunker, the more the car buyer would receive under the condition the vehicle is destroyed. This would raise the price carmakers receive from selling smaller vehicles.

Congress could provide substantial product development assistance to U.S.-based automakers and suppliers. The latter includes Toyota, Nissan and Honda, as well as the Detroit Three, battery makers and other suppliers to accelerate the production of innovative, high-mileage cars.

The condition for assistance would be that beneficiaries do their R&D and first large production runs in the United States, and share their patents at reasonable costs with other companies manufacturing in the United States. The huge U.S. market would help attract producers from around the world and rejuvenate the U.S. auto supply chain.

When the chief executives of Ford and General Motors flew in to Washington yesterday to ask Congress for a $25 billion lifeline, they didn't fly coach.

General Motors CEO Rick Wagoner arrived on his company's cushy Gulfstream IV, ABC News reported. Ford CEO Alan Mulally flew in on a private company jet as well.

It costs about $20,000 to fly one of these jets round trip from Detroit to Chicago -- far more than the $900 cost of a first-class ticket on Northwest Airlines, ABC said.

Wagoner told ABC he took the private jet because he's a busy guy. Mulally declined to comment.

It's not exactly news that corporate fat cats prefer to fly in style. And assuming all eight seats on the G4 were taken, the private jet only cost about $13,000 more than flying commercial.

But it might not be the best move by Big Auto as it tries to convince Congress that a $25 billion bailout would be money well spent. The two have already been criticized for their generous pay packages ($22 million for Mulally in 2007, $15.7 million for Wagoner).

What do you think? Is this a tempest in a teapot, or further evidence of Detroit's poor business practices?

For more Reuters political news, click here.

Photo: REUTERS/Kevin Lamarque (Auto industry leaders testify in Senate on Nov. 18)