Green Options

By most accounts, the Obama administration’s “Cash for Clunkers” program is a resounding success.

In the last weeks, GM has increased the intensity of its internal dialogue and negotiations with the Obama Administration to keep from being killed off. A summary of where GM is as of right now:

San Francisco Mayor Gavin Newsom struck hard at The Big Three for killing their electric vehicle programs and lacking the vision to move beyond hybrids.

I was recently glancing through the Washington Post, when the headline, “Green Is In The Eye Of The Beholder,” caught my eye — mostly because I have been wondering a similar question question as of late: What, exactly, makes a vehicle “green?”

It seems there are as many answers as there are shades of green. But, ultimately, the question all automakers need to figure out the answer to — especially the Big Three in Detroit — is which variety of environmentally friendly vehicles do Americans really want?

The White House and Congress are near a bailout for the “Big Three” auto manufacturers with a $15 billion loans. This is supposed to be a bridge loan to tide them over until the market improves. Will the market improve enough to pay back the loan or is this a bridge to nowhere?

Daimler-Benz wrote Chrysler off their books and sold 80% of Chrysler to Cerberus. Cerberus is one of the largest private equity investment firms in the US with total assists over $24 billion, yet they lack the faith to make a loan to their own company.

Bankruptcy is still the best tool for restructuring any failing industry!

Business cycles are a necessary part of any free market economy. Old industries and models must be replaced by new industries and ideas. This requires a shift in both human and material resources.
New industries require new skills. The government can best facilitate such a shift by easing reemployment of the workforce through realistic unemployment payments, education, investment in sustainable research and industry and a national health plan.

Healthcare, and pensions are a big part the Big Three’s problem. For every dollar paid as wages, more are spent on benefits for retired employees. Portability of health and welfare with affordable housing can increase mobility of the workforce.

Government should not try to pick winner in the market place. Old industry and models become entrenched into the government through lobbyist, influence pedaling, and just inertia. When Morse introduced the electric telegraph, he had to overcome a congress that was sold on optical telegraph – flashing lights, mirrors and telescopes.

Edison tried frantically to get alternating current banned as unsafe. Using A.C.. technology, Westinghouse drove Edison General Electric into bankruptcy, but GE emerged to become a pioneer and powerful competitor in a.c. technology.

Chrysler rose from the ashes of Maxwell Motors in 1915 by performance and safety innovations. It was reborn in the late ’70. After suffering loses from Dodge and Plymouth, Chrysler hired Lee Iaccoca, the former Ford CEO, who had been fired by Henry Ford II over his plain to market compacts.

While Iaccoca got government backing for loans, changes at Chrysler were well underway. He hired fellow renegades from Ford. The K-car, Omni, and Horizon are automotive history.

It’s been said that going to the moon was successful since it was a well-defined goal. Our primary goal should be greater than any particular market. It must represent a broad set of outcomes.

The White House and Congressional leaders announced that a bailout of the carmakers was imminent. The House signed on, but the Senate opposed the deal. The Big Three and the U.A.W stood united. The final breakdown in negotiation with the Senate occurred when Senator Corker of Tennessee and the U.A.W. came to an impasse. But the bailout will happen. Apparently, Bush will do it with some of the money from the financial bailout.

According to the latest proposal, a “Car Czar” would be appointed to oversee the rescue. It’s unclear how this “Czar” could be more effective than a U.S. trustee appointed by a Chapter 11 Bankruptcy judge. A trustee might be more likely to be free of special interest and partisan bickering. There are strong special interests in the Congress over the automotive industry.

via TreeHugger via The Beast via Boing Boing

After the big three Detroit auto makers essentially had their rear-ends handed to them in a bag by Washington politicians last week, they have been scrambling to find ways to get the money they feel they need to stay alive — and their proposed solutions are making Tesla cringe.

Last year, when the US congress passed the Energy Independence and Security Act (EISA), a $25 billion fund called the “Advanced Technology Vehicle Manufacturing Incentive Program” (ATVM) was established to help new and existing auto makers re-tool their operations to bring next generation car technologies to market quickly. Just this month, the program started accepting applications for funds from interested parties.

The net is buzzing with discussion about the fate of the Big Three automakers. The American auto industry is in the middle of a meltdown of epic proportions. As the New York Times reports:

Whichever path they choose, Democrats could be headed for a confrontation with Mr. Bush and were setting the stage for a dramatic lame-duck session

The confrontation in question is a proposal from Senate Democrats, with backing from President-elect Obama himself, to bail out the Big Three, under the premise that they are too big to fail and that if they went under, the ripple effects would be devastating. Curiously absent from the discussion, however, is the fate of a host of cleantech startups making extremely efficient vehicles powered by electricity, electricity plus gasoline or biofuels, and so forth.

Following a meeting earlier this week with House of Representatives speaker Nancy Pelosi, the ‘big three’ US automakers are optimistic about their prospects of receiving a multi-billion dollar loan.