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December 5, 2008

Auto Destruct
Well. That happened.

The Three Amigos appeared before Congress this week and went over like a lead Edsel. As Ben Mack at Wired's Autopia blog put it, "the Big Three have rarely missed an opportunity to miss an opportunity." And this past week was no exception. Honestly, it's probably even overly generous to refer to them as the Big Three at this point. Indeed, Robert Nardelli, CEO of Chrysler, which tried to merge itself into oblivion right before this whole process started, could barely justify his presence at the table.

Meanwhile, as Joe Romm observed, GM's announced "plan" is a bunch of warmed over boilerplate that includes paeans to ethanol and hydrogen. While they do feature their own potential potential gamechanger, the Chevy Volt, it's disheartening to see GM flogging hydrogen-powered cars so prominently. Hydrogen is that permanent gleam in George W. Bush's eye and the anchor of the sine qua non of greenwashing campaigns (the coal industry learned a lot from the Big Three if "clean coal" is any indication). Let it go, guys.

Only today's horrific jobs report provided congressfolks with any incentive to open their/our wallets. All indications are that while, as Rep. Barney Frank put, Congress will "do something" - probably bridge loans with various strings attached - they will punt anything more significant to the new administration. And why shouldn't they? Saving these companies is hard!

I suppose this whole fiasco was predictable. If the Big Three's management was truly visionary they wouldn't be in this pickle in the first place. That said, Romm did find the silverish lining in Ford's plan, which included some promising tidbits such as a focus on cutting hybrid costs by 30%, on a return to profitability on small cars and on revamping supplier relationships - all crucial elements of any auto industry recovery according to analysts.

After all this, though, I think I'll just reformulate my original assertion into a nifty metaphor. Congress, and ultimately the Obama administration, should worry less about fixing the Big Three's house and more on transforming the landscape around it. With US car sales (not to mention employment and consumer spending) in freefall, it's incumbent upon the government to offer the bridge loans to get the companies past this roughest of economic rough patches. But we shouldn't delude ourselves - the Big Three will shed thousands of jobs even in the best-case scenario if only because the car market itself continues to shrink.

The real energy for reform, however, should go towards new requirements and consumer incentives surrounding fuel efficient cars and transforming the car into a [mostly] electric vehicle that is powered by renewable fuel. There's lots to be done in that regard that has nothing to do with the car companies themselves. The sudden success of A Better Place's car charging system demonstrates that the ball has started rolling. Let's spend our billions on pushing it along and see if any of the Big Three can it pick it up and run with it. If we don't make that the goal, then our aid to the automakers will simply have been a bridge loan to nowhere.

[Updated 10:30pm:] Looks like they'll get their bailout after all.

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Anonymous Jon McGoran said...

Another great post, Tom. Inimitable, indeed!

Anonymous christophersj said...

I simply dont understand the lack of incentive in the congress. When else would there be a better time, or better leverage, to demand a swift move to 100% plugin-hybrids from the big 3. Give the money in installments, linked to strict conditions.

Detroit moved with great innovation and haste during both WWI and WWII, and they can do it again.

Subsidize lithium-ion development. Lease the batteries in purchased cars, ect. Whatever it takes. Lets get moving.

When else would be a better time to make such demands of Detroit?

And about the folly of hydrogen. Do you know of a chart or site that compares the efficiency of hydrogen production from renewables vs. lithium ion batteries? I'd like to have it handy.

Even if less efficient, I cant help but wonder if it will have a place with heavy transport, and aircraft.

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