If Cars Are the Problem, They Can Also Be the Solution

Cars are the challenge de jour on several obvious levels.

1. There’s no currently discernible path to profitability for GM and Chrysler and thus no exit strategy for the bailout funds they need. So GM and Chrysler are like suicide terrorists wandering around the business community threatening to blow up both themselves and everyone else in the room. Nobody knows whether to feed them or shoot them.

2. Cars cause America’s “oil addiction” which in turn has caused so much of America’s balance of payments and foreign policy and military pains - with no end in sight.

3. CO2 emissions from cars is a substantial contributor to the risks of global warming - also with no end in sight.

If cars are the cause of such vital U.S. problems then it follows that the solution must be changes in the car world. The Obama team and Congress can make change happen by providing short-term and medium-term incentives for very high fuel efficiency cars made in the U.S. to be sold in great numbers. Doing that would give the U.S. car makers an opportunity to become profitable through sustainable high levels of profitable sales; it would hasten the transition of the U.S. fleet to higher fuel efficiency thus reducing our oil addition more rapidly; and it would hasten the reduction of CO2 emissions.

One way to accomplish all this is rather straightforward. First, decide to feed GM and ignore Chrysler. Chrysler is owned by Private Equity which cannot be bailed out, so to hell with it; guaranteeing a more healthy GM means Chrysler can’t kill us by going under. Second, adopt a ten-year plan of incentives for U.S. car consumers as follows:

- establish a rising level of unacceptable and super-acceptable fuel efficiency standards over ten years. For example, the starting level of unacceptable might below 18 mpg and the starting level of super-acceptable might be above 35 mpg. These numbers would each rise steadily over a ten year period.

- tax all cars sold in the U.S. or imported by end users into the U.S. that have unacceptable fuel efficiency. Set the tax rate to increase over time, along with the mpg rating that is “unacceptable”. So, for example, cars with under 18 mpg in 2009 might carry a $3,000 tax. Cars with under 20 mpg in 2011 might carry a $4,000 tax.

- pay a cash rebate to buyers of super-acceptable models that are produced (assembled, at least) in the U.S. Again the mpg rating and tax rebate would increase over time. So in 2009 cars with over 35 mpg in might get a $3,000 rebate and cars with over 37 mpg in 2011 might get a $4,000 rebate. Or maybe it should be a sliding scale so cars above 35 mpg get $X, cars above 45 get more, etc.

- offer a cash purchase price - maybe $2,000 - for all cars traded in that are over a certain age (say 10 years) and under a certain fuel efficiency (say 13 mpg). The government would then scrap those cars and recover some of those funds.

The rebates would give car makers more profit on their fuel efficient cars since they could be priced higher (offset by the rebate). That would put the car companies on a sustainable path (at least for ten years) since the smaller fuel efficient cars that now cause losses would become more profitable.

Being a medium-term (10 year) commitment, the incentives will give car makers the assurance of future viability for efficient cars that will motivate them to design and produce even more fuel efficient cars for sale in the medium term. It matters not whether the fuel efficiency comes from new cheaper battery technologies or new oil-based fuel efficiency, hybrids or plug-in hybrids. A given fuel efficiency is just as good for lowering oil independence and reducing GHG emissions no matter how it is produced.

A “bridge” loan will still be needed by GM to get them through their current negative cash flow operating structure. But it will be made with the realistic potential of paying off in the future. Moreover, the government should get options on a huge part of the equity in GM, thus potentially getting the taxpayers’ money back at some point. The company will still need contractual restructuring to eliminate legacy costs that now make it uncompetitive. That means the bailout funds should come in as part of a pre-packaged restructuring that abrogates G.M.’s current legal obligations to its unions, dealers, and suppliers.

The program will create many good U.S. jobs because it will increase U.S.-made car sales as consumers get better cars for less money. Consumers will have the confidence to buy from G.M. because of the government involvement. In fact, G.M. would become a company that is in effect owned by the whole country - thus providing an element of self interest for U.S. consumers to buy their cars.

Eventually the government would be able to sell its GM stock, end the incentive programs, and get out of the car business. At that point it would have transformed the U.S. car fleet into a far more fuel efficient and cleaner fleet thus reducing both the oil dependency and the global warming problems to the extent they are car-related - possibly even at a profit to the tax payers. Most importantly, the government actions would give the economy a more rapid bridge to a stronger economic future.

How do we know a government-controlled GM would be smarter than the old one? We don’t, but we do know two things. One: new management could hardly be dumber than the past management. Two: we’ve just elected maybe the smartest President in history - so giving him the opportunity to pick the people who will make the GM decisions at least provides us with a glimmer of hope. His recent choices for leadership positions should give us confidence in his judgement.

The above prescription was suggested to me in part by a recently published brilliant history of GM, by an analysis of future fuel efficiency options, and by comments from a number of readers. No doubt my suggested plan has flaws and can be improved. But the logic behind it is correct: if cars are the problem then cars must also be the solution. If any reader has connections to the Obama people and thinks these ideas have merit, don’t hesitate to pass them along.

A similar program to what I am suggesting is being pursued by the Chinese. As the Wall Street Journal reported Tuesday, China is supporting BYD, the Chinese company Warren Buffet bought into last September, in its program to bring a plug-in hybrid electric car to market rapidly. It will be sold to fleets in China and they intend to market it in the U.S. in 2010. We don’t know exactly what subsidies and incentives the Chinese government is going to use, but the exact way of doing it is less important that the fact of doing it. So another reason for our government to get behind new U.S. car technology pronto is that we don’t want the Chinese to dominate the car technology of the future. The U.S. needs to be at the forefront of the car of the future.

Comments

[Mircea:]

But you are not a GM shareholder and GM or oter 3 000 000 autoworker +family.

2008 Dec 16 10:39 AM

[Tony Petroski:]

Yeah Jim, and we can call the "very high fuel efficient cars to be sold in great numbers "The People's Car." As long as were heading towards National Socialism, why not dust off the old playbook? By the way, when it becomes apparent to everyone that the earth is not warming, will we be promoting vehicles with enhanced CO 2 emissions in order to warm things up? Or do we just have an Orwellian switcheroo--the propaganda department just informs us that global warming has now become global cooling, but the 5-year plan is still on track?

I have another idea: Why not promote freedom, and free men will buy the cars that they want?

2008 Dec 16 10:59 AM

[k9s-4-k8:]

Much to comment on.

Jim Kingsdale says:
"......pay a cash rebate to buyers of super-acceptable models that are produced (assembled, at least) in the U.S."

This is a typical protectionist proposal I expect to hear from the UAW and the Democrat majority in Congress. Cash rebates paid only on U.S. built vehicles bypasses international trade laws.


Jim Kingsdale says:
"A “bridge” loan will still be needed by GM to get them through their current negative cash flow operating structure. But it will be made with the realistic potential of paying off in the future."

The only realistic terms for GM to be relieved of this debt is for the U.S. taxpayer to convert it into a grant, or convert it into equity which will perform only a bit better than a grant.

Jim Kingsdale says:
"Moreover, the government should get options on a huge part of the equity in GM, thus potentially getting the taxpayers’ money back at some point. The company will still need contractual restructuring to eliminate legacy costs that now make it uncompetitive. That means the bailout funds should come in as part of a pre-packaged restructuring that abrogates G.M.’s current legal obligations to its unions, dealers, and suppliers."

Either you're suggesting we receive stock in exchange for a $50 billion infusion to the UAW,(that's the big 3 deal with the UAW and they won't abrogate that deal for anything) or you're just papering over one of the major reasons GM will never survive profitably on their own without an intravenous drip on taxpayer funds for the remainder of this century. Certainly, I don't expect taxpayers will put up with that. We will cut our losses after many billions have already been flushed on this company.

Jim Kingsdale says:
"How do we know a government-controlled GM would be smarter than the old one? We don’t, but we do know two things. One: new management could hardly be dumber than the past management. Two: we’ve just elected maybe the smartest President in history - so giving him the opportunity to pick the people who will make the GM decisions at least provides us with a glimmer of hope. His recent choices for leadership positions should give us confidence in his judgement."

On the contrary, anyone that thinks they can turn around GM without a managed bankruptcy supported with government loans solution, is at least as stupid as the former management. As for Barack Obama being the smartest President in history? He's not even in the top 10. Where do you come up with such crap? Fact of the matter is that GM is suffering under the burden of labor expense due to the combination of greedy unions and greedy management. Nobody cared a whit about shareholders or the long term viability of the company, neither management nor the UAW. Automobile manufacturers are beholden to long-term supplier contracts and fix costs such as interest on debt for capital investment. The unions understand every day they strike costs GM millions. They hold tremendous leverage over the company. Management cares about year end bonuses. Enough days on strike in any year can dramatically curtail profits and leave management with a simple salary and no bonus.

2008 Dec 16 11:21 AM

[groosome:]

Lets regulate our industry to death.Since you do not seem to like it. We can just give all our money to the rest of the world because we really don't want anyone working here.
People like you are so far out of touch with reality it scares me. You spout all this garbage like it is going to cure everything without a real plan to do it.

2008 Dec 16 11:39 AM

[UseMyFedTax...:]

Q: Is it just me or does it seem like the country would like the Big 3 solve all the ills of our national energy crisis? Where is the outrage for builders and buyers of homes that are much too large [high carbon sheltering]? Where is the outrage for online shoppers that get overnight shipping [high carbon shopping]? By the same twisted logic that places blame on the auto industry for energy, we ought to place blame on Toll Brothers and Amazon for high carbon sheltering and shopping. It would be more productive to work on these problems as a entire system and value chain - where all parties have collective responsibility to improve the entire energy result. Right now, we, as a nation, want to impose our will on the Big 3 to not only remedy energy issues but also holistically fix social issues like legacy healthcare, retirement, etc.. while other parts of the "free market" do very little to re-balance the transportation energy value chain and social issues. In what type of country do we set up rules where we have huge financial and tax incentives to continue to building more and more assembly line capacity, more and more retail space, more and more housing - all without an energy plan except "let the free market do what it's gonna do". When these uncoordinated incentives run their course we get disruptions like mortgage crises, automotive transportation supply crises, and other energy/economic displacements. Everyone including government needs to get over ourselves and create a coherent plan that includes all energy elements: Infrastructure, Utilities, Energy Suppliers, Automotive Manufacturers, Retailers, Home and Building Constructors, Customers, Local, State, and Federal Government, Financial Institutions. Price signals for food, energy, and transportation drive consumption behaviors. So if you want to create a future that consumes less overall energy, prices have to be structured and maintained to change behaviors. Anything less is a temporary band-aid.

2008 Dec 16 11:44 AM

[BobMichigan...:]

But what if the public does not want the cars? This is just continuing the old failed policies that got us here.

For all the Hype, hybrids are 3% of the market and Toyota is delaying building the Prius plant. Why? Because at $4 a gallon for gas, a Prius is a bad financial decision, at $1.50 a gallon it is a joke.

If you actually want fuel economy, tax gas to $5 and push it to $8, the market will decide. Great idea, but neither party has the political will. the oil companies don't control the auto companies, dummy - the control your government.

Quit the union bashing and all the "Americans are stupid" crap. What are the two best selling vehicles in America in 2008? The Ford F150 and the GM Silverado/Sierra. The Toyota truck is a distant fourth in part because it's fuel economy stinks comared to the American Trucks.

2008 Dec 16 11:45 AM

[BobMichigan...:]

It would be nice if anyone here knew anything about the actual situation with the union contracts, about how the actual difference between the labor costs at GM and the transplants is about $1, instead of spouting that stupid $73 an hour thing all the time.

We have to decide if we will be a rich nation in the future that actually makes things or if we will be a poor nation that is just a bunch of stock brokers trading asian stocks.


On Dec 16 11:21 AM k9s-4-k8 wrote:

> Much to comment on.
>
> Jim Kingsdale says:
> "......pay a cash rebate to buyers of super-acceptable models that
> are produced (assembled, at least) in the U.S."
>
> This is a typical protectionist proposal I expect to hear from the
> UAW and the Democrat majority in Congress. Cash rebates paid only
> on U.S. built vehicles bypasses international trade laws.
>
>
> Jim Kingsdale says:
> "A “bridge” loan will still be needed by GM to get them through their
> current negative cash flow operating structure. But it will be made
> with the realistic potential of paying off in the future."
>
> The only realistic terms for GM to be relieved of this debt is for
> the U.S. taxpayer to convert it into a grant, or convert it into
> equity which will perform only a bit better than a grant.
>
> Jim Kingsdale says:
> "Moreover, the government should get options on a huge part of the
> equity in GM, thus potentially getting the taxpayers’ money back
> at some point. The company will still need contractual restructuring
> to eliminate legacy costs that now make it uncompetitive. That means
> the bailout funds should come in as part of a pre-packaged restructuring
> that abrogates G.M.’s current legal obligations to its unions, dealers,
> and suppliers."
>
> Either you're suggesting we receive stock in exchange for a $50 billion
> infusion to the UAW,(that's the big 3 deal with the UAW and they
> won't abrogate that deal for anything) or you're just papering over
> one of the major reasons GM will never survive profitably on their
> own without an intravenous drip on taxpayer funds for the remainder
> of this century. Certainly, I don't expect taxpayers will put up
> with that. We will cut our losses after many billions have already
> been flushed on this company.
>
> Jim Kingsdale says:
> "How do we know a government-controlled GM would be smarter than
> the old one? We don’t, but we do know two things. One: new management
> could hardly be dumber than the past management. Two: we’ve just
> elected maybe the smartest President in history - so giving him the
> opportunity to pick the people who will make the GM decisions at
> least provides us with a glimmer of hope. His recent choices for
> leadership positions should give us confidence in his judgement."
>
>
> On the contrary, anyone that thinks they can turn around GM without
> a managed bankruptcy supported with government loans solution, is
> at least as stupid as the former management. As for Barack Obama
> being the smartest President in history? He's not even in the top
> 10. Where do you come up with such crap? Fact of the matter is that
> GM is suffering under the burden of labor expense due to the combination
> of greedy unions and greedy management. Nobody cared a whit about
> shareholders or the long term viability of the company, neither management
> nor the UAW. Automobile manufacturers are beholden to long-term supplier
> contracts and fix costs such as interest on debt for capital investment.
> The unions understand every day they strike costs GM millions. They
> hold tremendous leverage over the company. Management cares about
> year end bonuses. Enough days on strike in any year can dramatically
> curtail profits and leave management with a simple salary and no
> bonus.

2008 Dec 16 11:54 AM

[groosome:]

Where is the concern for all the people that will be put out of work or retiree's who will lose their retirement income , How come nobody ever mentions them including the new president. How come you say nothing about the est. $2Trillion given to Wall Street whoise greed and creative and flawed business practices started all of this.

On Dec 16 11:21 AM k9s-4-k8 wrote:

> Much to comment on.
>
> Jim Kingsdale says:
> "......pay a cash rebate to buyers of super-acceptable models that
> are produced (assembled, at least) in the U.S."
>
> This is a typical protectionist proposal I expect to hear from the
> UAW and the Democrat majority in Congress. Cash rebates paid only
> on U.S. built vehicles bypasses international trade laws.
>
>
> Jim Kingsdale says:
> "A “bridge” loan will still be needed by GM to get them through their
> current negative cash flow operating structure. But it will be made
> with the realistic potential of paying off in the future."
>
> The only realistic terms for GM to be relieved of this debt is for
> the U.S. taxpayer to convert it into a grant, or convert it into
> equity which will perform only a bit better than a grant.
>
> Jim Kingsdale says:
> "Moreover, the government should get options on a huge part of the
> equity in GM, thus potentially getting the taxpayers’ money back
> at some point. The company will still need contractual restructuring
> to eliminate legacy costs that now make it uncompetitive. That means
> the bailout funds should come in as part of a pre-packaged restructuring
> that abrogates G.M.’s current legal obligations to its unions, dealers,
> and suppliers."
>
> Either you're suggesting we receive stock in exchange for a $50 billion
> infusion to the UAW,(that's the big 3 deal with the UAW and they
> won't abrogate that deal for anything) or you're just papering over
> one of the major reasons GM will never survive profitably on their
> own without an intravenous drip on taxpayer funds for the remainder
> of this century. Certainly, I don't expect taxpayers will put up
> with that. We will cut our losses after many billions have already
> been flushed on this company.
>
> Jim Kingsdale says:
> "How do we know a government-controlled GM would be smarter than
> the old one? We don’t, but we do know two things. One: new management
> could hardly be dumber than the past management. Two: we’ve just
> elected maybe the smartest President in history - so giving him the
> opportunity to pick the people who will make the GM decisions at
> least provides us with a glimmer of hope. His recent choices for
> leadership positions should give us confidence in his judgement."
>
>
> On the contrary, anyone that thinks they can turn around GM without
> a managed bankruptcy supported with government loans solution, is
> at least as stupid as the former management. As for Barack Obama
> being the smartest President in history? He's not even in the top
> 10. Where do you come up with such crap? Fact of the matter is that
> GM is suffering under the burden of labor expense due to the combination
> of greedy unions and greedy management. Nobody cared a whit about
> shareholders or the long term viability of the company, neither management
> nor the UAW. Automobile manufacturers are beholden to long-term supplier
> contracts and fix costs such as interest on debt for capital investment.
> The unions understand every day they strike costs GM millions. They
> hold tremendous leverage over the company. Management cares about
> year end bonuses. Enough days on strike in any year can dramatically
> curtail profits and leave management with a simple salary and no
> bonus.

2008 Dec 16 11:57 AM

[Rob A:]

A government takeover of GM is a sure death sentence. Who wants a car co-designed and co-produced by government? Not me! A structured bankruptcy is the best solution.

2008 Dec 16 11:58 AM

[gary the au...:]

Maybe in place of a bridge loan a court seatalment of for finational damage by the government and false publisity and their roll in the no asset backing of loans? Check out this note from a car dealer.

As I watch the coverage of the fate of the U.S. auto industry, one alarming and frustrating fact hits me right between the eyes.
The fate of our nation's economic survival is in the hands of some congressmen who are completely out of touch and act
without knowledge of an industry that affects almost every person in our nation.
The same lack of knowledge is shared with many journalists whom are irresponsible when influencing the opinion of millions of viewers.
Sen. Richard Shelby of Alabama has doomed the industry, calling it a dinosaur. No Mr. Shelby, you are the dinosaur, with ideas stuck in the '70s, '80s and '90s.
You and the uninformed journalist and senators that hold onto myths that are not relevant in today's world.

When you say that the Big Three build vehicles nobody wants to buy, you must have overlooked that GM outsold Toyota by about 1.2 million vehicles in the U.S.
and Ford outsold Honda by 850,000 and Nissan by 1.2 million in the U.S. GM was the world's No. 1 automaker beating Toyota by 3,000 units.

When you claim inferior quality comes from the Big Three, did you realize that Chevy makes the Malibu and Ford makes the Fusion that were both rated over the Camry and Accord
by J.D. Power independent survey on initial quality? Did you bother to read the Consumer Report that rated Ford on par with good Japanese automakers.
Did you realize Big Three's gas guzzlers include the 33 mpg Malibu that beats the Accord. And for '09 Ford introduces the Hybrid Fusion whose 39 mpg is the best midsize,
beating the Camry Hybrid. Ford's Focus beats the Corolla and Chevy's Cobalt beats the Civic.

When you ask how many times are we going to bail them out you must be referring to 1980.
The only Big Three bailout was Chrysler, who paid back $1 billion, plus interest. GM and Ford have never received government aid.

When you criticize the Big Three for building so many pickups, surely you've noticed the attempts Toyota and Nissan have made spending billions to try to get a piece of that pie.
Perhaps it bothers you that for 31 straight years Ford's F-Series has been the best selling vehicle. Ford and GM have dominated this market and when you see the new '09 F-150
you'll agree this won't change soon. Did you realize that both GM and Ford offer more hybrid models than Nissan or Honda. Between 2005 and 2007, Ford alone has invested
more than $22 billion in research and development of technologies such as Eco Boost, flex fuel, clean diesel, hybrids, plug in hybrids and hydrogen cars.

It's 2008 and the quality of the vehicles coming out of Detroit are once again the best in the world.

Perhaps Sen. Shelby isn't really that blind. Maybe he realizes the quality shift to American. Maybe it's the fact that his state of Alabama has given so much to land factories from Honda,
Hyundai and Mercedes Benz that he is more concerned about their continued growth than he is about the people of our country. Sen. Shelby's disdain for "government subsidies"
is very hypocritical. In the early '90s he was the driving force behind a $253 million incentive package to Mercedes. Plus, Alabama agreed to purchase 2,500 vehicles from Mercedes.
While the bridge loan the Big Three is requesting will be paid back, Alabama's $180,000-plus per job was pure incentive. Sen. Shelby, not only are you out of touch,
you are a self-serving hypocrite, who is prepared to ruin our nation because of lack of knowledge and lack of due diligence in making your opinions and decisions.

After 9/11, the Detroit Three and Harley Davidson gave $40 million-plus emergency vehicles to the recovery efforts.
What was given to the 9/11 relief effort by the Asian and European Auto Manufactures?

$0 Nada. Zip!

We live in a world of free trade, world economy and we have not been able to produce products as cost efficiently.
While the governments of other auto producing nations subsidize their automakers, our government may be ready to force its demise.
While our automakers have paid union wages, benefits and legacy debt, our Asian competitors employ cheap labor. We are at an extreme disadvantage in production cost.
Although many UAW concessions begin in 2010, many lawmakers think it's not enough. Some point the blame to corporate management. I would like to speak of Ford Motor Co.
The company has streamlined by reducing our workforce by 51,000 since 2005, closing 17 plants and cutting expenses. Product and future product is excellent and the company is
focused on one Ford. This is a company poised for success. Ford product quality and corporate management have improved light years since the nightmare of Jacques Nasser.
Thank you Alan Mulally and the best auto company management team in the business.

The financial collapse caused by the secondary mortgage fiasco and the greed of Wall Street has led to a $700 billion bailout of the industry that created the problem.
AIG spent nearly $1 million on three company excursions to lavish resorts and hunting destinations. Paulson is saying no to $250 billion foreclosure relief and the whole thing is a mess.
So when the Big Three ask for 4 percent of that of the $700 billion, $25 billion to save the country's largest industry, there is obviously oppositions.
But does it make sense to reward the culprits of the problem with $700 billion unconditionally, and ignore the victims?

As a Ford dealer, I feel our portion of the $25 billion will never be touched and is not necessary. Ford currently has $29 billion of liquidity.
However, the effect of a bankruptcy by GM will hurt the suppliers we all do business with. A Chapter 11 bankruptcy by any manufacture would cost retirees their health care and retirements.
Chances are GM would recover from Chapter 11 with a better business plan with much less expense. So who foots the bill if GM or all three go Chapter 11?
All that extra health care, unemployment, loss of tax base and some forgiven debt goes back to the taxpayer, us. With no chance of repayment, this would be much worse
than a loan with the intent of repayment. So while it is debatable whether a loan or Chapter 11 is better for the Big Three, a $25 billion loan is definitely better for the taxpayers and
the economy of our country. So I'll end where I began on the quality of the products of Detroit.

Before you, Mr. or Ms. Journalist continue to misinform the American public and turn them against one of the great industries that helped build this nation, I must ask you one question.
Before you, Mr. or Madam Congressman vote to end health care and retirement benefits for 1 million retirees, eliminate 2.5 million of our nation's jobs, lose the technology that will lead us in the future and create an economic disaster including hundreds of billions of tax dollars lost, I ask this question not in the rhetorical sense. I ask it in the sincere, literal way.

Can you tell me, have you driven a Ford lately?

Jim Jackson,
Elkins Fordland

2008 Dec 16 12:02 PM

[31October:]

Regarding the author's proposals:

I guess it's not politician-directed corporate fascism if WE are the ones doing it?

2008 Dec 16 12:11 PM

[jimxyz:]

Jimmy Carter was smarter - - - look where he got us!

2008 Dec 16 12:43 PM

[Alberto1:]

The easiest method is just putting a tax on fuel. Add something like $1.00 or 1.50 per gallon of gas and change (raise) the income taxes bands to compensate lower income taxpayers. Make the system tax neutral (no increase in tax revenue for the government, the increase in gas tax is compensated by the reduction in income tax). People will be much better at deciding which car to buy.

Higher efficiency standards and other methods are just complex ways of doing the same and are not that good, there is a lot of research and work on that. Higher efficiency standards are good for providing work for lawyers. To reduce fuel usage, just raise the price.

2008 Dec 16 01:00 PM

[patio:]

You lost me at "CO2 blah blah blah". You really should watch the Weather Channel on occasion. No warming for over 10 years, and significant cooling in 2007 and big-time this year.

2008 Dec 16 01:53 PM

[Christoph(e...:]

I must say Alberto does have a piece of the pie when he alleges that raising the price of gas forces the consumer to make choices about the vehicle used for transportation. When gas reached $4.11 a gallon I noticed more public transportation being used. More F250's and F150's were parked along the side of the road with FOR SALE signs posted on them and the topic of conversation at the company water cooler was, "Where is the cheapest gas station?" Auto dealers lots were filled with trucks they couldn't give away. Used car lots were doing a brisk business in 4 cylinder cars. It was only then that the Big Three scrambled to produce more energy efficient vehicles.
RAISE THE PRICE OF GAS TO $20.00 A GALLON. OUR DRIVING HABITS WILL CHANGE, GREEN HOUSE GASES WILL CHANGE AND CAR MANUFACTORS WILL CHANGE.

2008 Dec 16 01:57 PM

[Jerry_Sailor:]

I like it.

I would also add on a gas tax that grows by 25 cents/gallon/year until we stop importing oil. That tax would siphon money from the drivers of gas guzzlers to fund the purchase (and scrapping) of older gas guzzlers that Jim proposed and help incentivize the free market car economy to build vehicles powered by anything but gas.

JR

2008 Dec 16 02:01 PM

[Caster:]

Simple solution is to introduce same taxes on gas as in Europe. If you have to pay twice as much for gallon you will for sure buy fuel efficient vehicles. The government can use additional taxes for stimulation of car industry.

2008 Dec 16 06:02 PM

[Robert Nabloid:]

"Two: we’ve just elected maybe the smartest President in history"

Huh? He hasn't done anything yet! My god, some people really do drink the MSM kool-aid. His supporters scream "give him a chance" to anybody that speaks in a critical manner about Obama's decisions so far, while crowning him "genius" before they even gave him a chance to accomplish anything. The only genius anywhere near Obama is his PR team and the MSM that backed him! He was told to use vague political rhetoric so that each individual would look at him and paint their own picture about how he is going to change things and save us... He never issued a detailed plan we could look at or critique! BTW, I'm just as against McCain as I am Obama... so don't even go down that road...

Obama's brilliant plan is to promise to spend more of our money on programs he and the average citizen likes! Woah, that's just genius!!!! Why didn't I think of that? Nothing Obama has come up with is any different than what the main stream media has been pushing for - efficient cars, infrastructure spending, climate change BS, more social programs, etc... None of those are just Obama's ideas... they are ideas that have existed for a long time around the world. He's just being given the chance to implement them in the US. But go ahead and act like he's the most brilliant President in history. He's just implementing socialist policies (I'm not saying the whole country is now under socialism, just that he is implementing some socialist policies)... it's not rocket science. If he was so smart, why was he sueing CItibank to issue more sub-prime loans to his community a few years ago?

The most brilliant in history (in politics) are the founding fathers whose wisdom is being continually ignored with the destruction of the constitution by recent Presidents, and will undoubtedly continue under Obama.

Oh, and as for the premise, "If Cars Are the Problem, They Can Also Be the Solution"... Cars aren't the economic problem that got us into this mess, they are more like the canary in the coal mine... The problems are much deeper. Much deeper.

2008 Dec 16 07:18 PM

[ohioguy:]

I think this article is about the strongest piece of evidence why they need to file Chapter 11 and get their business issues before an impartial judge rather than the strange brew of social engineering and messianic faith in politicians offered up by the author

2008 Dec 16 09:25 PM

[dmia5:]

Dallas and Chicago metro have too many ozone alerts, Denver has its smog. Our need for oil has us sending $700 billion to foreign oil producers. Regardless of whether or not global warming is "real," cleaning up the air, reducing our balance of payments, and keeping us out of "necessary" wars are reasons enough to reduce our oil needs. However, Jim's ideas are too convoluted. I agree with the those who suggest maintaining a high gas price by adding a tax when the price drops below $3.50, for example. This would be a simple fix that allows each one to make their own economic decision on what type of car to buy which in turn should show the car makers what to build.


On Dec 16 10:59 AM Tony Petroski wrote:

> Yeah Jim, and we can call the "very high fuel efficient cars to be
> sold in great numbers "The People's Car." As long as were heading
> towards National Socialism, why not dust off the old playbook? By
> the way, when it becomes apparent to everyone that the earth is not
> warming, will we be promoting vehicles with enhanced CO 2 emissions
> in order to warm things up? Or do we just have an Orwellian switcheroo--the
> propaganda department just informs us that global warming has now
> become global cooling, but the 5-year plan is still on track?

>
>
> I have another idea: Why not promote freedom, and free men will buy
> the cars that they want?

2008 Dec 17 08:57 AM

[oilcan821:]

anyone is free to buy the foreign nametags: just remember that sen. shelby and mcconnell sold out their constituents by gaining tax abatements, tax breaks, and deals on water and sewage and power. the local communities do not prosper when the local tax base has went across the pond. they furnish these on their own in these local counties and towns, then when the abatements run out, so do the transplants, or they beat down the community by a bidding war with another community!!!! look it up if you think it's not so! let gm and ford go under, then go down town and ask how much your local taxes will go up! tell chrysler to take a hike, and find out how long it takes for the local economy to go down!!! bridge loan is a deal compared to the total tax loss which would be a reality! ready for the double-whammy? just vote down 1 fire protection ballot, and watch your insurance rates go sky-high! any way you look at it, we need to keep the american nameplates going!!! that creates checks to really stimulate the economy!!

2008 Dec 17 10:20 AM

[k9s-4-k8:]

On Dec 16 12:43 PM jimxyz wrote:

> Jimmy Carter was smarter - - - look where he got us!

True!!! If Jimmy wasn't so inept, we might not have gotten Reagan for 8 years. Thanks, Jimmy-dog!!!

2008 Dec 17 06:38 PM

[k9s-4-k8:]

On Dec 16 11:57 AM groosome wrote:

> Where is the concern for all the people that will be put out of work
> or retiree's who will lose their retirement income , How come nobody
> ever mentions them including the new president. How come you say
> nothing about the est. $2Trillion given to Wall Street whoise greed
> and creative and flawed business practices started all of this.

Well, if we should be concerned about people who's greed as reflected by their agent the UAW, then we should certainly be even more sympathetic for anyone and everyone who has been laid off from a job. Lets provide them all with an unemployment check exponentially higher than what they made with their prior employer. Hmmm...maybe their might be a bit of moral hazard there, but hey isn't that exactly what we have with the UAW and the auto manufacturers? As for Wall street, I agree let them go bankrupt. Unfortunately, unlike the auto manufacturers I already know that if counter party risk might bring down most of the largest banks in the world, industries like the auto manufacturers wouldn't survive anyway along with most any business that ever used any credit in the operation of business. Isn't anyone a small business out there? Is everyone brain dead out there?

2008 Dec 17 06:48 PM

[fran:]

autos are a commodity business. the usa will not in any forseeable future be successful in commodity manufacturing, if the usa is to have a successful role in autos, it will be in ownership and control of technology which makes an auto unique. others are most likely to be more successful at replication of and assembly of parts--mass production.

our efforts in this arena must be directed not at classic auto factories, but at technology development/patent ownership/unique manufacture ofkey technology. saving GM, F in their current forms won't win this battle.

our $$ resource needs to be directed differently[eg. INTEL, MONSANTO, DNA, systems/programming tools/solutions] and drastically in advancement in education, research, data bases/structures, modeling/simulation,an...

advanced whatevers, etc etc.

maintain for however long we can leverage our heavy interest where we possess better skills/product sets[CAT, DE, JOYG, etc].

we'll lose the battle in

the "dogs and frogs' arenas.

we must go and muster opportunity where others aren't.

2008 Dec 17 10:50 PM

[Paul Killinger:]

Before you get so giddy about greater government intervention in our economy, you might want to take a look at the entities our government already DOES run. If you can do that with a straight face, then I would suggest you've been sucking up those auto tailpipe emissions you refer to for too long.

2008 Dec 18 12:45 PM

[Paul Killinger:]

Fran,

You're right on the money there, lady.

2008 Dec 18 12:47 PM

[Kunst:]

"When you claim inferior quality comes from the Big Three, did you realize that Chevy makes the Malibu and Ford makes the Fusion that were both rated over the Camry and Accord by J.D. Power independent survey on initial quality? Did you bother to read the Consumer Report that rated Ford on par with good Japanese automakers. "

It took a long time for the US car makers to ruin their reputations. It will take a long time before consumers are willing to trust them again.

2008 Dec 21 04:24 PM