Living in Peace and Wisdom on our Planet

  My Profile  Log In   Register Free Now   
Living in Peace and Wisdom on our Planet Planet Thoughts Advanced       Click to see one of our videos, chosen at random from the database, along with its PlanetThought
 Try a video
Home   About   Books&Media   Resources   Contact  
   News   Quote   Review   Story   Tip   All   Blogs   News   Quotes   Reviews   Stories   Tips
Get Email or Web Quotes
or use our RSS feeds:
New Feed:  Fossil Fuel
 Full  Blog  News
Read & Comment:
A Solar Community In Isr...
'Let's You And Him Fight...
Paul Krugman's Errors An...
Why Climate Change Is An...




Most recent comments:
From Farm To Fork
A Simple List: Things We...
Can the affluent rest at...

Actions:
Bookmark the site
Contribute $
Easy link from your site
Visit Second Life
Visit SU Blog




Lack of investment capital threatens the auto industry now

By Jason Pelletier of Low Impact Living

Are you as tired as I am of the unending bad economic news? From the subprime crisis to the collapse of the real estate bubble to the near-failure of the global finance industry, it just goes from bad to worse. More scary news this week — major retailers are failing (Circuit City) and one or more of our domestic auto manufacturers appears to be next.

It now appears likely that the government (and as a result we, the taxpayers) will fund some kind of bailout for the auto industry. The price tag could be in the $25 - $50 billion range, and that's on top of a $25 billion loan they've already received from the US Department of Energy to retool their operations to produce more efficient cars.

This really pains me. Several years ago, when the Prius began to take off, it was pretty clear (at least here in California) that this was the beginning of a transformation rather than a little niche. It doesn't take that much marketing insight to see that something major is happening when folks who normally would buy $50K+ luxury cars (executives, celebrities, high-tech entrepreneurs, etc) are standing in line to buy a $22K mid-size car that looks like a spruced-up door stop. Especially when that trend is being driven by a real-world problem that just happens to threaten the entire planet.

Instead of taking action, the US car companies pursued inaction. Instead of investing in new design on these alt-fuel cars, they lobbied hard to prevent increased fuel economy standards. They repackaged old products based on old technologies in increasingly extravagent ways (see Hummer and Escalade) instead of ramping up innovation. And they made sure that they used their clout (both companies and unions) to keep anyone else who might prod them to change, such as the State of California Air Resources Board, at a standstill as well.

These companies deserve to fail, but this can't happen. Our economy is teetering on the brink, and losing one out of every ten jobs in the US (and probably a higher percentage of wealth, given that these jobs are high paying) would certainly push us into a deep dark hole the likes of which we haven't seen before. This would take a huge human toll: as much as auto unions have been part of the problem, they represent hundreds of thousands of workers who have families to support and homes to keep out of foreclosure.

Now, I'm not an economist. But it would seem that we can either "rescue"? these companies (albeit from themselves) or sustain their work forces in a way that ensures we are fueling the creation of a new economy rather than prolonging the rattling last gasp of an old one.

Here are some thoughts, and I'd love to hear some of yours as well:

  • Provide the funds, but with major strings attached. First, they must be used exclusively to fund the acceleration / development of new green cars. The Japanese and German manufacturers seem to be able to do this on their own, but our companies need a big stick. Second, remove the Boards and top executives who have been part of the downward spiral. Thomas Friedman in the New York Times recommended bringing Steve Jobs to the rescue, but why stop there? Assemble new boards and sprinkle the executive teams with folks from Silicon Valley and other centers of innovation. 
  • Invest in retraining a major portion of the companies' workforces for new energy-related jobs as part of any package. Together, the Big Three employ about 140,000 hourly workers in the US. You could pay full salaries and benefits and fully retrain half of those workers for less than $10 billion. Our new government is likely to invest billions in new energy technologies (solar panel installation & manufacturing, geothermal generation, new transmission infrastructure, etc), and these workers could be on the ground floor of the next great growth industry.
  • Provide incentives to new renewable energy manufacturers to locate near failing auto plants. Take, as an example, thin-film solar companies. Billions have been invested in this promising technology, and many of the leading companies are based in the US.  But, most of the production capacity is being built overseas.  The same is true for many other green tech advances. Keep them here, and staff them with displaced auto workers.
  • We've learned as of late that large banks can fail in a less-painful way when they're immediately taken over by a stronger bank. Let's do the same here - wouldn't Honda or Toyota do a better job managing GM's manufacturing network? I know this is controversial, but pitting any domestic survivors against a combined multinational company would be the competition needed to make all remaining players stronger.

I'm sure some of these won't pan out under rigorous economic or political analysis. But this crisis is also an opportunity to finally get things right in a critical industry. That will require new and perhaps radical thinking, not more of the same.

Source: http://www.enn.com/business/article/38658  
 *** No related readings were found for tag "escalade" *** 
  
^ top
Add a comment    
  Follow the comments made here? 
  (Please log in or register free to follow comments)
Comment by:  Wavehunter (William Coffin) (Nov-18-2008)   Web site
Jason, your ideas seem eminently sensible - far more sensible, for sure, than rescuing the US car industry from a fate of its own making. The car industry is part of the problem, not part of the solution; the workers in it, however, should be seen as a resource rather than a burden.

That these ideas can even be mooted shows, I think, how far America has changed in just a few turbulent months. Once they would have been greeted with shaking heads and people saying "can't" simply because they are not free market solutions. It has always been undemocratic to leave all solutions to a faceless, unelected, unaccountable market, but now it has also been revealed as idiotic. The market is not only unfair socially and destructive environmentally: it is also inefficient economically.

In future years, I hope, political leaders will begin to enact legislation like you suggest - with each measure judged on its sense and popularity, rather than its affect on the NYSE or its adherence to market dogma.
  
Comment by: Steven Earl SALMONY (Nov-16-2008)   Web site

We know who is responsible for this economic mess? Why are they paid billions now?

Billions of dollars are paid in bonuses and bailouts to the “wonder boys” on Wall Street. Precisely what have these self-proclaimed Masters of the Universe been doing for billion dollar year-end paydays?

Yesterday we found out.

In recent years “the brightest and best” have perfected the rule-making governing the manipulation of ‘free’ markets and the institutionalization of fraudulent financial instruments and business models.

What still mystifies me is this: What have these heirs of Ozymandias done in 2008 to merit this self-enrichment? More manipulation and more fraud for more ill-gotten gains, I suppose.

What can done for the benefit of the human community to put right this massive wrongdoing?


Steven Earl Salmony
AWAREness Campaign on The Human Population,
established 2001
http://sustainabilityscience.org/content.html?contentid=1176
  
Comment by:  PT (David Alexander) (Nov-16-2008)   Web site

Well, I wrote a comment to them but since I have no idea what specifically these payments do, I wrote in a slightly different manner. Here is the comment I offered:

Why are we now paying interest on bank deposits? I have to admit that this topic is rather complex for a non-professional such as myself. However, I am someone who has been in many transactions and business deals. Perhaps you can offer an English-language explanation of these actions that the citizens of this country can understand?

I know this: Paul and Bernanke are poor leaders. I have seen this crash coming for years, we just put it off this long by a high degree of intoxication with the current financial system. It is time to look deeply at the roots of our cultural priorities and scale finance back to a MUCH less exciting business - the way it was in the 1950s, being strongly regulated and BORING.
  
Comment by: JS Uralia (Nov-16-2008)   

The wrong goals, David, the very wrong goals. For those of you who are U.S. citizens, please join me and the other four public commenters they have bothered to publish so far by leaving a polite comment at the end of http://www.federalreserve.gov/newsevents/press/monetary/20081006a.htm asking that they please storp paying interest on banks' deposits so that banks might have an incentive to, for example, underwrite commercial paper again.

This graph shows what's been going on (from the DailyKos link below.)
  
Comment by: Linda (Nov-16-2008)   Web site

Great article ... I feel that the automakers need to come up with a plan that will make the 25 billion they want worth it. Right now, they have been thumbing their noses at all of us for a while now. Why should we bail them out? The employees is the only reason. other than that, I would let them die on the vine as we should of done with AIG.
  
Comment by:  PT (David Alexander) (Nov-16-2008)   Web site

These financial reports are rather opaque. The Fed press release to which you point in your comment, JS, says they are doing this to keep the rates close to the target... yada, yada. But, do you think they are lying, incompetent, or have the wrong goals?

Does anyone actually understand what they are doing? I have this feeling that the current management of the economy is purely based on technical indicators, with little awareness (or worse, with intention) of environmental impact and of the growing separation of rich and poor.
  
Comment by: jsuralia (JS Uralia) (Nov-16-2008)   

Please join me in making polite comments asking that the Fed stop paying interest on banks' deposits.

Another likely beneficiary will be Western Wind Energy
  
Comment by: JS Uralia (Nov-16-2008)   

One of the big things wrong with the economy is the Fed paying interest on banks' deposits, which is new, and locked in the credit freeze. Please see the 3rd and 4th graphs here.

I predict a windfall for Vestas.

  
^ top 
About author/contributor GuestWriter

PlanetThoughts.org welcomes occasional articles and opinion pieces from writers who are not regular contributors. Their contributions will be listed under the "GuestWriter" name, and additional attribution will be shown in accordance with the agreement with the original writer and source of the PlanetThought.

Visit Green Wave Email Marketing
Email Marketing for You and Your Planet


We won a Gotham Green Award for 2010, on Earth Day! Thank you Gotham Networking for this award.

See the attractive event brochure.

Recommended Sites

  Member of:
GOtham Green networking
Green Collar Economy
New York Academy of Sciences
Shades of Green Network

  PlanetThoughts
     Members/Affiliates *

Approaching the Limits
    to Growth
EcoEarth.Info
Environmental News Network
EESI.org
GreenBiz.com
GreenHomeBuilding.com
Heroin and Cornflakes
NewScientist
ScienceDaily


* Members of PlanetThoughts      
  communities on SU or MBL,      
  and blog article affiliates      

  Other Favorite Blogs
21st Century Citizen
Center for Bio. Diversity
Easy Ways to Go Green
EcoGeek
Good Bags
Opposing Views


Valid my RSS feeds


We Do Follow

ClickBlog.org



  Volunteer      Terms of Use      Privacy Policy  

Copyright © 2020 PlanetThoughts.org. All Rights Reserved.
Except for blog items by David Alexander: Some Rights Reserved.