Can’t we all just drive Segways?
Of course not. We need automobiles. Yet, maybe automobiles aren’t as important as they used to be, and that should be embraced. Still, automobiles are going to continue to be an important part of America’s future.
Thus, a viable auto industry is essential to America’s future. Even Japanese automakers want a strong US auto industry. Without those jobs, many more Americans won’t be able to buy new Honda’s and Toyota’s.
Fortunately, I’ve been pretty impressed with how Obama and Congress have dealt with Detroit so far. Instead of just rushing tens of billions to them, viability plans have been required – plans that require serious negotiations with all vested parties. Similarly, some pretty strong statements have come out of the White House and Congress. (Then again, who knows what is going on behind closed doors. Perhaps Nancy Pelosi has already assured Ron Gettelfinger of the bottom line.)
Nonetheless, without everything going perfectly in the next few years, the Big 3 are not going to be viable, as I blogged yesterday. Even worse, if the future is going to be driven by efficiency, the Big 3 have a horrible record, especially in terms of profitability.
And, without a serious surge in gasoline prices – even greater than this past summer – I just don’t see how the Big 3 can compete at efficiency if the nation moves towards a model that California, and many other states, are embracing. That’s Honda’s specialty, not GM or Chrysler.
Ironically, however, the kind of gas price surge that would make efficiency profitable would probably keep the annual run rate of vehicle sales below anything the Big 3 can survive without major re-organization.
So, why don’t we accept this as reality? Change is inevitable. Can we really hope and subsidize our way out of such a conundrum?
America needs a bigger, transparent vision of the future when it comes to energy and automobiles. Inevitably, we need a moonshot or a far more serious, honest reorganization plan. Otherwise we’re gambling a lot of money on terrible odds.
If taxpayers are going to have to subsidize the US auto industry for the next decade, let’s be honest right now. And, let’s make those subsidies dependent upon a real plan to end foreign oil dependency by 2020.
Recent Comments