Photo: Are the Big Three's business models as antiquated as their cars?
Yesterday in the Wenatchee World, Tracy Warner advised against the $25 billion bailout of the Big Three, American automakers (GM, Ford, Chrysler). As a fiscal conservative his arguments focused on 1) the conundrum of even defining what an American-made car is 2) the fact that competitors to the Big Three make more popular cars at lower cost. “Buying American, even if you could figure out what ‘American’ is, won’t change any of those problems. Read Tracy’s article.
On top of this, the Big Three have operated for decades believing they could dictate what the market wanted rather than supplying what the market wanted. In a world with finite resources and with a planetary need to produce cleaner technologies, American automakers have steadfastly lived in the past and ignored the looming future. Now the ostriches of Detroit who lived with their heads in the sand are being devoured.
The notion of bailing out the arrogance, blindness, laziness, and “can’t- do” spirit encapsulating what the unholy Trinity has become is as galling to most taxpayers as watching AIG’s top executives secretly squander bailout money while stridently insisting they need for more. Here’s another interesting article published a few days ago in Salon questioning the wisdom of bailing out the dysfunctional Big Three. Written by Joseph Romm who worked as an assistant secretary for the Department of Energy, it not only enumerates the problems plaguing these corporations, it reminds us that their commitments to develop fuel-efficient hybrids for previous government funds they received were reneged on.
Meanwhile the editorial below, written by K.C. Golden, Policy Director for www.climatesolutions.org, a research and advocacy organization working to build the new energy economy, just ran in the Seattle Post Intelligencer.
Turn bailout into opportunity
By K.C. Golden
We should not rescue General Motors as we know it. But Congress could use the proposed bailout as an opportunity to begin building a new prosperity that can last. As part of any public assistance, GM should be required to help America reduce its oil dependence and tackle the climate challenge by producing the cars of the future.
Saving GM under any circumstances is a hard swallow.
This is the company whose Vice Chairman Bob Lutz says "global warming is a total crock of s - - -."
GM sent a posse of executives and lobbyists to Olympia to fight Washington's Clean Car Act in 2006, a law that will reduce climate pollution from new cars by 30 percent and save Washington consumers more than $2 billion in fuel costs. (Gov. Chris Gregoire sent them packing and fought successfully to get the law passed.)
The Clean Car Act was due to go into effect in the 2009 model year, so we should be getting the better cars now. But we're not, because GM has more good lawyers than engineers.
In its endless court battles against Clean Cars, GM has mounted a vigorous "can't do" case, casting doubt on its own ability to deliver quality cars that meet the standards. If you believe them -- if they really can't build good, clean cars -- then "what's good for GM" is what's killing America.
Federal Judge William Sessions scoffed at GM's pessimism, finding it "improbable that an industry that prides itself on its modernity, flexibility and innovativeness will be unable to meet the requirements ... especially with the range of technological possibilities and alternatives currently before it."
The market wants efficient cars; the engineers can produce them; the law requires them. But GM's lawyers and executives fight on for their right to commit commercial suicide and planetary ecocide, even as they descend on Congress, cup in hand.
Come again -- why should we dig deep to save a company that seems so resolutely determined to destroy itself, taking the economy and the planet down with it?
Congress cannot save GM and the jobs it provides by propping up its failed business model. The only way to save it is to overhaul it.
Bullitt Foundation President Denis Hayes nailed it: "In World War II ... Detroit was ordered to stop making cars and start making tanks. Today, Detroit needs to be ordered to stop making civilian tanks and start making cars."
Hayes proposes that manufacturers be required to deliver cars that average 50 miles per gallon by 2020, and 100 mpg by 2030. That should be a minimum condition of any bailout. Little tweaks won't do it. We need -- and to survive, the company needs -- an automotive revolution.
We can't revitalize the economy by resuscitating a gasping Hummosaurus. We have to build a new, more durable economy by investing in the infrastructure and industries that can sustain prosperity and save the planet.
The GM bailout is a crucial test: Will our heroic interventions to revitalize the economy merely prolong the demise of the old, bankrupt economic models? In response to this economic seizure, will we just lubricate the same obsolete machinery so it can hurtle more efficiently over the cliff? Or will we use this historic opportunity to begin building a new economy that actually works -- delivering sustainable, broadly shared prosperity and good jobs for the long haul?
The "General Motors" we know is doomed. But if a new GM can rise from the ashes and deliver "Green Mobility" -- aggressively doubling fuel economy and doubling it again -- it would be worth saving.