Word of advice to the UAW.

IT'S A PIVOTAL MOMENT for U.S. manufacturing. Delphi's bankruptcy decision and General Motors' tentative deal with the United Auto Workers to reduce health care costs appear to be opening shots in the Big Three's efforts to radically alter their cost structures. They have no choice because as J.T. Battenberg of Delphi has argued, no business can survive if it must pay workers $130,000 a year, even if they're not working.

So if the UAW membership has any lingering doubts, our advice is to look at what happened to the steel industry. If you fight the auto industry's management so forcefully that they cannot reduce costs, that's the death knell for what's left of the Big Three. Just pack it all up and head out to your cabins on the lake. There will be no American-owned auto industry for the next generation.

It is far better to accept the short-term pain of lower wages and less generous benefits and redefine your relationship with management. If you engage with management and fight together for the future of the industry, it's possible that Ford and GM could reverse their long slides and gain back market share. If they did, they would build more factories or retool old ones. Over the long term, jobs would be created, not destroyed. That is the best--and only--way forward.