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A Green Auto Bailout Must Oust Execs

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If President-elect Obama is serious about bailing out Detroit and also serious about his campaign goal of putting 1 million domestically produced plug-in electric hybrids on the road by 2015, execs like Bob Lutz, GM’s vice chairman, have no place in tomorrow’s Detroit — at least that’s a growing sentiment in the media; a recent spate of editorials and columns have called for salary freezes and firings. Lutz is the one who earlier this year said hybrids “make no economic sense.” He also told Stephen Colbert, while promoting the Chevy Volt, that he doesn’t believe in what he refers to as the “CO2 theory” of climate change.

The Wall Street Journal asked early on if an auto bailout package should boot the CEOs of Ford, GM and Chrysler just as the government ousted top executives at Fannie Mae, Freddie Mac and American International Group (AIG) as part of its takeover.

Speaking in May to the Detroit Economic Club, Obama did not mince words when it came to telling auto execs what their role was in their own downfall:

“Whenever an attempt was made to raise our fuel efficiency standards the auto companies would lobby against it, spending millions to prevent the very reform that could have saved their industry. Even as they shed thousands of jobs and billions in profits over the last few years, they’ve continued to reward failure, in some cases with lucrative bonuses for CEOs.”

Thomas Friedman was far less forgiving in his latest column, calling most of the “brain dead” auto industry’s woes self-inflicted and scoffing at the idea of subsidizing innovation in Detroit. He would rather have the likes of Steve Jobs take the reins of domestic auto sector. Sure, Jobs has built his company on innovation, but perhaps someone more like Better Place’s Shai Agassi, of whom Friedman is already a fan.

The auto execs are preparing to testify before Congress next week, but perhaps they should also be updating their resumes.

10 Responses to “A Green Auto Bailout Must Oust Execs”

  1. In Search Of The New “Holy Grail”: The SCEV “Self Charging Electric
    Vehicle or (The Unplugged Self Charging Electric Fuel-less Zero
    Emissions No Battery Exchange Electric Vehicle: (The Green Dream
    Machine Electric Car)

    Despite what naysayers and nuts, foot draggers and perpetuators would
    like to pass off as reasonable explanations for not changing anything
    when it comes to building The “TRUE”SCEV “Self Charging Electric
    Vehicle or ( The Unplugged Self Charging Electric Fuel-less Zero
    Emissions No Battery Exchange Electric Vehicle) big enough, luxurious
    enough and fast enough to satisfy the needs and desires of the most
    crazed automobile addict are simply nonsense.

    The challenges are not overwhelming; the science and technology is not
    decades away. It is here now and if we decide, if we declare like
    putting a man on the moon, that we are going to do it, and we put our
    money where our mouths are we can have the dream Green Machine vehicle
    on the road in 2010.

    (The Green Electric Car)…

    And then there will be the Green Truck, the Green Jet Aircraft, The
    Green Train, and on and on. Then you can all come to Washington and
    join me at the Smithsonian to look at a fascinating relic from out of
    past… The Dead Internal Combustion Engine!

  2. In the case of the auto-makers’ bailout, it’s a relief to have a national issue that is so straightforward: American cars tend to suck therefore people are not buying them. If GM and Ford don’t want to go out of business, they should start making decent cars. To bail them out would be to reward their terrible manufacturing standards.

  3. Josh Schwartz

    The auto industry is in the position they find themselves due to greed. Selling suv’s is more profitable than fuel efficient vehicles. They sold us a bill of goods that has political, environmental and financial consequences that we will pay for in years to come.
    Saving 3 million jobs is important. Let the oil industry bail out the big 3 they made the money from the auto manufacturers decision to sell us gas guzzlers.

  4. Looking at all the Op-eds from Left/Right, I can’t help but think that we are destined (in short term) to fall into the classic problem of fixes that fail. Trying to link money to improving the combustion engine seems wrong and that the industry must move beyond the manufacturing and sales paradigm of the combustion engine.

    Hybrids should be avoided at all cost and our attention should be focused only on advanced energy storage systems (batteries, fuel cells and capacitors) that can change how we build cars. The industry needs leaner manufacturing, not the complexities of hybrids.

    The Big 3 have too many factories, too many supply chain networks and have to stop only making money when they sell a new car. It’s time to leapfrog into electric motors powered by combination of batteries, fuel cells and capacitors. And leverage the coming convergence of the auto industry and utilities, and auto and IT industry around new revenue streams.

    While Execs often dismiss new platforms and worry about being too early, recent bets on energy storage systems to be made in Asia suggest that we might be close to being too late. I would hope that US leadership recognizes the need to kill the combustion engine.

    Thanks for the post!! Wonderful seeing this topic being flushed out across the blogosphere!

    Some related articles that look at the globalization of electric vehicles:


    Garry Golden
    The Energy

  5. Richard Leclair

    This is a great opportunity to realign the auto industry on sustainable principles.
    1) Nationalize temporarily (10 years) all the design functions of all the companies and get the best engineering minds together to design the best sustainable, fully recyclable zeron carbon transportation vehicles
    2) leave the manufacturing to the current companies and keep only the management required for this function
    4) invest only in companies that retool to build sustainable zero carbon vehicles
    5) do not give millions to fired management – give them instead stock options based on the value of the whole industry in 10 years so that they have a vested interest in it’s success

  6. That’s exactly what Detroit needs – required political litmus tests there executives. Bob Lutz is the driving force behind the Volt which has more potential to reduce green house gasses than any competing technology. How does it help to get rid of him just because he doesn’t believe in the party line. I think that has been tried in Russia and Germany, As I recall it didn’t work out well. Building innefficient cars was not smart, but it is not the main cause of Detroit’s financial problems, their problems stem from the huge expenses they incurred from the labor contracts they negotiated years ago.

  7. All the auto execs should pay the price for their lack of imagination and stubborness in clinging to THEIR idea of what the industry should be and ignoring the Japanese competition. They took that route in the’70s and it almost killed them and they did not learn.

    As a result the innovative part of the industry passed them by and now the taxpayers are expected to pick up the tab.

    Only if these executive failures pay their share of the price.