The US auto industry has lost the war. Not just the battle, but the war. At least, the war for supremacy in fossil-fuel vehicles. We’re not close to being remotely competitive in the arena of fossil fuel-powered vehicles, and we never will be. Legacy pensions, benefits, an uncompetitive pay scale and sheer lack of vibrant new product ideas will ultimately crush the US auto industry. Foreign cars in this country are built in with a far more cost-effective cost structure. Detroit Big Steel is sunk. Pure and simple.
Automakers want a bail out because they’re burning cash at phenomenal rates, but they have no meaningful plans for how, exactly, they’re going to turn things around. What good is a bailout if there is absolutely no opportunity for a turnaround? Detroit will never compete with foreign owned manufacturers. They simply do it better, faster, and cheaper. There is no way Detroit can shed its ugly legacy of high costs, slow market response and white-collar fat. Let’s admit that.
On the other side of the coin, there is strong, albeit idealistic, talk about creating an energy-independent America and weaning ourselves from fossil fuels. Rather than debate about the future of the Big Three, let’s look at this situation from a radical perspective. Well, as radical as capitalism, with a kick in the pants from the government. Which, in case any of us have forgotten, is representative of the people, by the people and for the people. So here’s a “peoplespeak” solution.
Henry Ford didn’t invent the horseless carriage, but he did figure out how to mass produce it and capitalize on the abundance of cheap fossil fuel. It propelled the US auto industry for seven decades, but we have hit the end of the line. Government cash infusions for US automakers will only prolong the pain. There is no K-car or minivan miracle in our future. We will throw billions out the window if we simply prop up automakers doing the same old same old.
Many of the pundits of the early 1900s scoffed at the concept of replacing the cheap, reliable, hay-fed four-legged vehicle with a weird device with a starter crank and a paucity of places where this odd vehicle (which couldn’t even keep pace with a decent horse), could find fuel. We all know how that battle ended up.
After all these decades, perhaps it’s time for radical thinking, consistent with the radical concepts of Henry Ford in his battle for the internal combustion engine or Thomas Edison in his belief that electricity might actually be a cost effective replacement for gas lamps. I’m a historian, and if you spend enough time on the Internet, you’ll see just how much resistance there was to electricity. The rhetoric of the day might make you wonder why we aren’t working by the light of gas or kerosene.
Making a change from Detroit steel to Detroit clean green would be a move of desperation and opportunity, but so have many great successes to bolster our “unrealistic” hopes. John F. Kennedy charted a course to the moon before we’d barely breached the stratosphere, and six years later, men were walking on the moon. It can be done. And perhaps it takes a government initiative – reflected by the will and spirit of the people, rather than what we’ve come to think of as a government plan – to make this happen. If the people wish it, then the government, a vehicle of the people, should be compelled to make it happen. Unlike many countries, where government is a vehicle of the elite, the US government is not an “it,” but an “us.”
Before I launch my plan, let me counter one argument you must all have: Henry Ford and Thomas Edison, two of America’s great innovators and inventors, built their businesses without government intervention. Ideally, this is the way it should happen. However, you must agree that they operated without the restrictions of union and employment obligations, expectations of management compensation, and all the other factors that are weighing down the US automakers.
The concept of small manufacturers building energy efficient autos using alternative fuels sure sounds good, but it hasn’t worked in 20 years and it will never work. Too many vested interests, and a lack of sufficient compelling financial reward has proven that simple capitalistic entrepreneurship will not succeed. This dire situation requires a radical approach.
So here’s the plan: implement a plan that virtually nationalizes the US auto industry. If everyone is talking about bailing out US automakers because they’re a “can’t fail,” we’re already talking about virtual nationalization. We’re looking at an outdated, uncompetitive industry with high costs and an unbelievably slow to market response time. So if the US were to provide billions to the auto industry to prop it up, what new value proposition would we actually have? The same old companies, doing the same old thing, and when all is said and done, they would still not be able to muster a cost-effective, high quality alternative to their competitors.
If the political rhetoric is correct, and the country is ready for new transportation and energy alternatives, why not use a government bailout to jump start the Big Three into becoming the world leader in new-energy vehicles? How is this so different from Henry Ford figuring out how to make the break from hay-powered nags to the era of cheap fossil fuel?
Maybe whatever energy source we select will never be as cheap as the early days of fossil fuel. But do we still believe the US is the world leader in developing new, creative, cost-effective alternatives for the future? If we don’t believe that, we should give up right now. But then, who would the Chinese and Indians have to emulate? If we believe we are still world leaders in innovation and creativity, then let’s step up to the plate and make the jump from the four-legged hay-burner to the horseless carriage. This fundamental change in business would be risky, but it would also jump start a level of creativity and energy not seen since we made the commitment to put a man on the moon.
We can do this. Our country, spurred by a can-do attitude and an infusion of money, went from bi-wing canvas-clad airplanes with propellers to rockets on the moon in 25 years. Think about that: 25 years. If our belief in American leadership and ingenuity is accurate, let’s encourage these $46 per hour line workers who are proud of their creativity and expertise to show what they’re made of. Let’s not fire the white collar designers and engineers because there’s no future in designing fossil fuel vehicles. Let’s challenge them to rapidly develop a new generation of vehicles, with new power sources and new capabilities, at attractive price points. Let’s pressure gas stations to switch from offering bales of hay for the horses to instant battery chargers or bio-fuel dispensers or whatever. We’re heading toward a big government cash bailout anyway, so let’s make it count.
We’ll deal with the consequences later. We’ll figure out how to return these companies to independence, free from government control, and to being attractive free market investments. But right now, throwing good money after bad makes absolutely no sense. We will just prop up the same old operations, and sooner or later, they will collapse and the taxpayers will be out so much money America may never recover.
So, let’s be radical. It’s not a perfect plan, but can you think of any better way to meld populist agenda with economic reality?
Automakers want a bail out because they’re burning cash at phenomenal rates, but they have no meaningful plans for how, exactly, they’re going to turn things around. What good is a bailout if there is absolutely no opportunity for a turnaround? Detroit will never compete with foreign owned manufacturers. They simply do it better, faster, and cheaper. There is no way Detroit can shed its ugly legacy of high costs, slow market response and white-collar fat. Let’s admit that.
On the other side of the coin, there is strong, albeit idealistic, talk about creating an energy-independent America and weaning ourselves from fossil fuels. Rather than debate about the future of the Big Three, let’s look at this situation from a radical perspective. Well, as radical as capitalism, with a kick in the pants from the government. Which, in case any of us have forgotten, is representative of the people, by the people and for the people. So here’s a “peoplespeak” solution.
Henry Ford didn’t invent the horseless carriage, but he did figure out how to mass produce it and capitalize on the abundance of cheap fossil fuel. It propelled the US auto industry for seven decades, but we have hit the end of the line. Government cash infusions for US automakers will only prolong the pain. There is no K-car or minivan miracle in our future. We will throw billions out the window if we simply prop up automakers doing the same old same old.
Many of the pundits of the early 1900s scoffed at the concept of replacing the cheap, reliable, hay-fed four-legged vehicle with a weird device with a starter crank and a paucity of places where this odd vehicle (which couldn’t even keep pace with a decent horse), could find fuel. We all know how that battle ended up.
After all these decades, perhaps it’s time for radical thinking, consistent with the radical concepts of Henry Ford in his battle for the internal combustion engine or Thomas Edison in his belief that electricity might actually be a cost effective replacement for gas lamps. I’m a historian, and if you spend enough time on the Internet, you’ll see just how much resistance there was to electricity. The rhetoric of the day might make you wonder why we aren’t working by the light of gas or kerosene.
Making a change from Detroit steel to Detroit clean green would be a move of desperation and opportunity, but so have many great successes to bolster our “unrealistic” hopes. John F. Kennedy charted a course to the moon before we’d barely breached the stratosphere, and six years later, men were walking on the moon. It can be done. And perhaps it takes a government initiative – reflected by the will and spirit of the people, rather than what we’ve come to think of as a government plan – to make this happen. If the people wish it, then the government, a vehicle of the people, should be compelled to make it happen. Unlike many countries, where government is a vehicle of the elite, the US government is not an “it,” but an “us.”
Before I launch my plan, let me counter one argument you must all have: Henry Ford and Thomas Edison, two of America’s great innovators and inventors, built their businesses without government intervention. Ideally, this is the way it should happen. However, you must agree that they operated without the restrictions of union and employment obligations, expectations of management compensation, and all the other factors that are weighing down the US automakers.
The concept of small manufacturers building energy efficient autos using alternative fuels sure sounds good, but it hasn’t worked in 20 years and it will never work. Too many vested interests, and a lack of sufficient compelling financial reward has proven that simple capitalistic entrepreneurship will not succeed. This dire situation requires a radical approach.
So here’s the plan: implement a plan that virtually nationalizes the US auto industry. If everyone is talking about bailing out US automakers because they’re a “can’t fail,” we’re already talking about virtual nationalization. We’re looking at an outdated, uncompetitive industry with high costs and an unbelievably slow to market response time. So if the US were to provide billions to the auto industry to prop it up, what new value proposition would we actually have? The same old companies, doing the same old thing, and when all is said and done, they would still not be able to muster a cost-effective, high quality alternative to their competitors.
If the political rhetoric is correct, and the country is ready for new transportation and energy alternatives, why not use a government bailout to jump start the Big Three into becoming the world leader in new-energy vehicles? How is this so different from Henry Ford figuring out how to make the break from hay-powered nags to the era of cheap fossil fuel?
Maybe whatever energy source we select will never be as cheap as the early days of fossil fuel. But do we still believe the US is the world leader in developing new, creative, cost-effective alternatives for the future? If we don’t believe that, we should give up right now. But then, who would the Chinese and Indians have to emulate? If we believe we are still world leaders in innovation and creativity, then let’s step up to the plate and make the jump from the four-legged hay-burner to the horseless carriage. This fundamental change in business would be risky, but it would also jump start a level of creativity and energy not seen since we made the commitment to put a man on the moon.
We can do this. Our country, spurred by a can-do attitude and an infusion of money, went from bi-wing canvas-clad airplanes with propellers to rockets on the moon in 25 years. Think about that: 25 years. If our belief in American leadership and ingenuity is accurate, let’s encourage these $46 per hour line workers who are proud of their creativity and expertise to show what they’re made of. Let’s not fire the white collar designers and engineers because there’s no future in designing fossil fuel vehicles. Let’s challenge them to rapidly develop a new generation of vehicles, with new power sources and new capabilities, at attractive price points. Let’s pressure gas stations to switch from offering bales of hay for the horses to instant battery chargers or bio-fuel dispensers or whatever. We’re heading toward a big government cash bailout anyway, so let’s make it count.
We’ll deal with the consequences later. We’ll figure out how to return these companies to independence, free from government control, and to being attractive free market investments. But right now, throwing good money after bad makes absolutely no sense. We will just prop up the same old operations, and sooner or later, they will collapse and the taxpayers will be out so much money America may never recover.
So, let’s be radical. It’s not a perfect plan, but can you think of any better way to meld populist agenda with economic reality?