The General Motors Corp. assembly plant on Baltimore's Broening Highway is one of the survivors in an industrial war of attrition that took heavy casualties in the past year.
Instead of adding the 45-year-old plant to the list of other closed-down industrial facilities around the country, GM will sink at least $220 million into it by the summer of 1982, turning it into what chief plant engineer Art McConnell calls "one of the most modern car assembly plants in the world," saving the jobs of more than 4,000 automobile workers.
The remodeling of the Broening Road plant is part of an unprecedented $80 billion investment planned by American automakers in the next five years to catch up with radical changes in the automotive market caused by consumers' demands for more-efficient, reliable cars.
Although the goal isn't stated this way, the new plant is designed to compete against imports from Japan, with a modern assembly line that can be stopped if necessary to assure quality production. The problem of competing with Japan has become an obsession with American automakers.
GM, the world's richest auto company, says it has the money it needs to redesign its assembly lines, and industry analysts agree. But dozens of American manufacturers in auto, steel, rubber, chemical and other industries face an equally pressing need to modernize but complain they can't afford to do it -- at least not fast enough to stay ahead of foreign competitors.
Last month, the Carter administration formally accepted a large share of the responsibility for "revitalizing" American industrial plants through a program that promises greater tax breaks for capital investment and a new partnership between government, business and labor to review the federal government's policies that help and hurt industry.
Where the new industrial policy will lead is sheer guesswork, because the administration itself is divided on how close the partnership should be. Some critics fear the country is stumbling toward a powerful business-government alliance -- a socialism of the right; other analysts predict that business, laor and government regulators will find very slow going as they try to reach a common ground on complex issues of trade protection, environmental rules and wage and price policies.
Clearly, though, the $1.5 billion federal loan guarantees for Chrysler Corp., approved by Congress in December, marked a turning point in political support for threatened American businesses.
"In the past decade alone, sliding U.S. competitiveness has cost the nation an estimated $125 billion in lost production and more than 2 million industrial jobs," warned a Senate subcommittee report on industrial policy last month. Subcommittee Chairman Sen. Adlai E. Stevenson III (D-Ill.) predicts that even younger healthy industries in the computer and telecommunications areas will have to fight for their lives against foreign competitors.
Although U.S. spending on plant and equipment has risen in recent years, the levels are not keeping up with inflation -- or with the rate of investment in Japan and West Germany, the country's most powerful industrial competitors.
Such plowback investments by American firms amount to only 10 percent of the gross national product here, compared with a 15 percent investment level in West Germany and 21 percent level in Japan.
U.S. industrial technology will stay even only if one assumes that U.S. engineers, economists and businessmen are that much smarter than their competitors in West Germany and Japan, and that is far from a sure thing, says Lester Thurow, professor at the Massachusetts Institute of Technology.
The Carter administration's new "economic revitalization" plan takes only a small immediate step toward closing the gap.
That plan would steer 55 percent of a proposed 1981 tax cut of $27.5 billion toward business, a wholesale shift in tax policy by a Democratic administration, says Amitai W. Etzioni, former White House adviser and advocate of an industrial policy for the United States.
The proposed corporate tax reduction would include steps to increase depreciation for businesses and an additional 10 percent tax credit for economically hard-bit areas.
Carter also established an Economic Revitalization Board -- bringing together leaders from business, labor and government -- to seek a consensus on industrial policy issues.
(Republican presidential candidate Ronald Reagan proposed business tax cuts totaling $35 billion over three years compared with $52 billion in total business cuts for the same period in the Carter proposal.)
Advocates of a full-fledged "industrial policy" were disappointed to various degrees with the administration plan, in part because it doesn't attempt to single out "winners" -- rising, high-potential firms or other crucial industries -- for special government attention.
After months of internal debate, the administration could not agree on how far to go in this direction, particularly when money for a new industrial policy had to be scrounged from what the administration considers a no-frills federal budget.
In addition to its costs, an industrial policy also confronts the government with hard political choices.
"When an obsolete, low-productivity New England shoe factory shuts down and a new silicon chip factory opens in California, individuals and communities are going to be hurt," said Thurow at a hearing on industrial policy this month.
"The correct public response, however, is not to protect the domestic shoe market from foreign competition but to help individuals and capital flow in the new growth area. America is one country. In the long run, no one is hurt if the population in California is slightly larger and the population of New England is slightly smaller," Thurow said.
California congressmen might agree; those from Masachusetts probably wouldn't. Facing this dilemma, the administration plan concedes that with accelerating automation and shrinkage of some basic industries such as autos and steel, jobs of many thousands of industrial workers are gone for good. The plan begins a new training program to help these industrial workers find new careers in new communities, but only $1 million was provided for this fiscal year.
Eztioni and Thurow agreed that to match the industrial innovation of Japan's industrial surge was based on heavy investments in modern plants at the expense of consumer spending, and the United States will have to go farther in that direction to get the same results, they said.