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Summary:

Many of the readers on this site support or invest in cleantech companies, of which green cars are an important component. We’ve all seen the dire predictions about what will happen if the Big Three automakers fold. Millions of people will be thrown out of work, […]

Many of the readers on this site support or invest in cleantech companies, of which green cars are an important component. We’ve all seen the dire predictions about what will happen if the Big Three automakers fold. Millions of people will be thrown out of work, the economy will implode, etc. If this happens in a vacuum, true, but nothing happens in a vacuum.

American automakers have been producing a mediocre product for decades, and have fought cleantech at every turn (remember the EV1?). They’ve earned their failure, and should be allowed to go into bankruptcy so that their assets and workers can be reallocated to companies that are not freighted with old baggage.

The government should send a clear message that it will bail out soon-to-be-idled auto workers and their suppliers, but not the companies themselves. Let’s look at where the real value is in the American auto manufacturing base.

The value is not in the upper layers of management or the corporations themselves. The value is in the millions of people who are employed by the auto industry, in their institutional knowledge and skills, and in the factories in which they work. Those people will still know how to build cars even if they are out of work for a year, and if supported during this interval, most will find work with new and more dynamic companies. Meanwhile, the factories will still be there. Such assets that can be sold in liquidation to entrepreneurs seeking to build new car companies.

I view this chapter of the economic crisis as a great opportunity, a chance to drive a stake through slow-moving companies that have done more to retard innovation than anyone. Get rid of the corporate shells and the bloated management and start anew. Provide special programs to support idled workers, fast-track universal health care so company-sponsored health insurance is rendered moot, and spend the rest on funding and incentives for new car companies to scale and bring hybrid and electric cars to mass production.

Remember, it took the U.S. just months to retool the auto industry in response to WWII. This may be the best opportunity in half a century to restart what was once the pride of this country’s manufacturing sector. It’s called creative destruction. The U.S. car companies have earned it.

  1. The point is understandable, but, I think, rife with Californian condescention. The EV1 failed because Californians didn’t want to buy it. It wasn’t some Billion dollar rouse by GM to invite greentech just to kill it. The reality is that the Automakers make what the people want to buy. What you should ask yourself is why Americans are (were) still buying large trucks from the Big 3 (they were also buying cars from Asian auto makers – just fewer of them). This is still the country that voted for GW Bush…twice. Don’t blame the auto makers for our own behavior.

    If they go under, you can forget about the Volt or any other electric car.

  2. It’s interesting how it’s called creative destruction if it happens somewhere else. (NIMBY). Who is this Guest Columnist? Jean-Baptiste Emanuel Zorg? (look it up.)

    I think the people at Tesla are finding out how hard a car company is to build and run. I don’t think that people not close to this industry (that includes California and Wash. D.C.) have any idea how hard it is to make a modern automobile.

    I understand that the Big 3 has made some missteps, but most of their money problems are institutional, not technical. These include legacy pension benefits (already addressed; will fully take effect by 2010), health care costs (a problem shared by many others in this country), a parasitic dealership relationship (far too many dealers), and too generous payments to union workers (also being addressed).

    If these changes (many already in place) can be given a chance to take effect, then the Big3 will save about $3500 for every car that they build. This is huge!

    They do build cars that people want! People wanted SUVs and trucks! So they built them. Now, apparently they want something else. Like the $30,000 Prius. Compare this with a Chevy Malibu for about $20,000. Now GM didn’t understand the greenness cache of the Prius (they do now).

    GM is still the leader in world car production. They are doing very well in China, so they do know how to make vehicles at very low cost.

    I agree that this is a great opportunity to rebuild America’s energy infrastructure. And the automobile is key to that. But you need large, experienced companies to do that! GM has crushed far more cars than Tesla will ever build. (They do that will the first few thousand of ANY car they build, by the way, for legal reasons. That being said, their behavior w.r.t. the EV1 was a PR disaster.)

    A solid PHEV vehicle concept could lead this country out of oil dependency and onto alternative energy sources to power much of our infrastructure. Now is not the time to make rash judgments based on past mistakes. GM, Ford, and Chrysler all “get it” now; as you can see with their furious efforts at alternatively fueled vehicles. Give them a chance to get these new technologies to the showrooms. If we have to wait for new companies like Tesla, that will set us back a decade or more.

  3. The Volt and it’s underlying technology will be bought by some one if it gets sold at all. GM isn’t the only company producing electric cars. Last I heard Tesla beat them to the punch. Th!nk with its City will be available in Norway early next year. Nissan and Renault are moving aggressively with Better Place on electric cars as well.

  4. I don’t think selling a two-seater for $106,000 is “building a car that people would want to buy”. Your double standards are mind boggling. PBP is a sham.
    The Th!nk is a good niche vehicle but not mainstream and also not buildable in large numbers anytime soon.

  5. Gail Nickel-Kailing Friday, November 21, 2008

    I think your message hit the nail on the head! Let the Big 3 go down, but give a safety net to the workers, keep the warranty process in place to service cars on the road, and keep the parts available.

    They will reorganize, retool, and reopen – smaller, chastened, and focused on providing transportation options necessary for today’s population.

    The advertising industry will have to turn its thinking around too and educate/influence the market and promote transportation options that don’t guzzle gas, require expensive infrastructure, and – here’s the most necessary – make it a good thing to be careful and considerate of the environment.

  6. Hot News And Web Search Friday, November 21, 2008

    I don’t think selling a two-seater for $106,000 is “building a car that people would want to buy”. Your double standards are mind boggling. PBP is a sham.
    The Th!nk is a good niche vehicle but not mainstream and also not buildable in large numbers anytime soon.

  7. I think selling this car people would buy it,
    especilaly if it is in wholesale

    and it does not require expensive infrastructure.

  8. Long live the free market!

  9. You may not want the Tesla but plenty of people want one. Perhaps you don’t know that the Telsa competes in the luxury sports car market. Do you know what that range is? Tesla is relatively cheap compared to it’s competitor.

    Do you have any idea who is supporting the Th!nk? Do you think these people are idiots? Do some research on the Th!nk and tell me if you think their backers are stupid.

    One of the options available with the Th!nk is a battery pack from EnerDel. EnerDel can mass produce battery packs. Do research on their production capability. They CAN mass produce. That is why they are getting a lot of interest from multiple EV producers.

  10. Their very first move should be to rid themselves of the UAW which is as much to blame for the current state of the big 3 as their failed and outdated policies.

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