The American auto industry is one hell of a lemon. This week, governmental debt bringers are sinking another $5.5 billion in taxpayer money into GM and Chrysler, two sputtering corporate giants who can no longer find first gear. In realistic terms, this cash is just a survival stopgap – without intelligent cooperation between industry and government, loans won’t repair the auto market, just buy it another tank of gas. In short, we need to put new ideas at the wheel. (Man, I really went full throttle into that car metaphor.)
Juxtaposed with other spending headlines the auto bailout, now totaling $26.9 billion from TARP funding, seems downright modest. Equally unlike the blank-check financial bailout, government money now comes with strings attached. The U.S. Treasury has given GM and Chrysler 60 days to draft a viable business plan with their aid at stake. By “viable business plan,” they mean “just take a knife and start cutting.“
Both companies plan to make massive cutbacks in dealerships and jobs (several thousand at minimum) and the overdiversified GM will be forced to slice off brands and close factories. Should this fail to free up enough cash for debt repayments, bankruptcy looms. For Ford, that will be the best day ever to be alive.
The “end of times“ budget cutting plan solves nothing, will worsen unemployment and will fan deserved public ire toward both automakers and politicians. Real solutions must be had, not infinitesimal of aid and superfluous deadlines. On a lighter note, GM is discontinuing the Hummer.
This pitiful state of affairs isn’t what any of us wants or needs. The auto industry is an integral part of the American economy and, for better or worse, the American cultural identity.
So the industry needs saving. What to do? At present, industry heads, federal economic advisors, potential foreign partners and United Auto Workers are meeting and throwing ideas and numbers across the table. Here’s some food for thought:
First, more money! Because you can’t drive a derivative, and we paid for that.
Second, increase regulations! Unstable oil prices have driven American consumers away from American cars – our products‘ average gas efficiency is down under Australia’s. When was the last time you considered buying an Australian car? Should Corporate Average Fuel Efficiency standards increase, the market could revise and return from critical condition.
And surprise, Obama’s already moved CAFE regulations. Downward. Dropping fuel efficiency standards to below Bush’s 2008 levels (from 31 to 30 for passengers, 25 to 24 for SUVs) has been a move so insulting that his office has been brought to court by the Center for Biological Diversity. You read that right. Obama. Less green than Bush. Reality is too weird sometimes.
Another great concept is that of scrapping programs. By offering steep discounts on new models of cars (half government-funded, half industry-funded) in exchange for an older model to junk, Germany upped its auto demand by 40 percent. We should do the same, only pass the cars on to “Top Gear.“
In any case, the message is clear: Existing technology can and must be incorporated into available models of U.S. cars and to do that, it’s gotta be regulated. The industry has become too entrenched in the SUV, the sham that has been foisted on this decade’s illusory upper middle class. A lack of standards allowed for the inflation of a fair-weather economic trend that has now burst. Without regulations, we’d have no airbags, so here’s to the next step.
Third, bring back the electric car, you bastards! Under regulatory pressure from the California Air Resources Board, GM was required in 1989 to turn 10% of its sales into zero-emissions vehicles by 2003. With a $3 million budget, GM turned out in 1989 a prototype plug-in electric car, the Jetsonian-styled “EV1.“
With a home-installed charger, the EV1 could speed along on a 120-mile charge without a drop of gas. Combined with a photovoltaic array, the EV1 could run entirely on sunlight. Though pricey to produce, as is any groundbreaking product, the EV1 was a viable option for mass transit without petrol. If you think this is some heavy shit, so did GM.
GM leased hundreds of EV1s as if it were about to become a production model. Things looked good. Then, through vigorous loopholing by automakers, CARB’s regulations lost their teeth. Immediately, GM recalled and tracked down every single EV1 in existence, then hauled them to the compactor. Like some capitalist arachnid, it ate its children. Toyota’s RAV4-EV met a similar fate, though a few hundred remained on the road.
We need an immediate expansion of infrastructure for electric cars. Had research and development been in progress since the EV1, production costs would have dropped and thousands of Americans would be free from gas. We can correct it now, and we must.
Fourth, don’t combust what you eat! The National Corn Growers Association won’t let this one die. Chewing through the logic of corn-based ethanol, it doesn’t work. Food prices have already doubled outside the U.S., waste products must be dealt with, no harvest could ever cover demand, fossil fuels remain in fertilization and distribution and on and on and on.
The NCGA is driven by the same compulsion that drove GM to crush the great electric hope. PROFIT. CARB is convening right now to discuss alternative energy options for this state. Call in.
Whether you prefer to envision the American auto industry as hurtling toward a cliff or sputtering to a halt, the signs are everywhere. We can’t make ‘em like this anymore.
CHEYA CARY thinks Kele of Bloc Party “got laryngitis“ after dealing with UCD administrators. Tell him what DRIVES you crazy about this economy at firstname.lastname@example.org.