Saturday, April 4, 2009

Can Politicians Build Cars: The Death and Rebirth of the American Auto Industry

Amidst all the heat and yap surrounding the troubles of the Detroit Dinasaurs and plans to toss another $100 Billion of our money in life support, referred to as a "loan", to failing GM, another American auto industry is struggling to be born, and is already making some of the most advanced and innovative automobiles being built today.

Pictured above is the Tesla S-type, a 4000-pound, 5-seat (and possibly 7-seat) 4-door "saloon" type sedan of impressive beauty and luxury and powered solely by an ion-lithium battery,offered by Tesla Motors of California. It is the first all-electric highway-worthy sedan ever built, and the price, $57,000 USD, is about half that of the dazzling, electricity-sipping Ferrari-killer, the $105,000 Tesla Roadster. It will have a driving range of about 300 miles on one charge, and according to company founder and Entrepreneur Extraordinaire Elon Musk, use an amount of electricity equivalent to 135MPG of gasoline. Or, to put it differently, it is about three times as economical as the Toyota Prius or Honda Civic Hybrid. The S-Type is slated for production in 2011.

As Musk points out, the extraordinarily low "fuel" cost of the car make the car the equivilant of a $35,000 hybrid figuring on $4/gallon gasoline- which we will probably see again by the end of summer. However, Musk states that this car is only the next step toward his goal of building a mass market automobile to be offered at a price point competitive with Hondas and Toyotas, and that the substantial profits to be made from the high-end roadster are making possible the development of a moderate-priced auto. Musk believes that the company will achieve profitability this year, and while car sales in general are in the worst slump in decades, the Tesla Roadsters are selling briskly with no discounts, and there is a waiting list of buyers.

Tesla will be opening a showroom in Chicago, at 1053 W. Grand, this spring.

Now, lest anyone think that I'm becoming a tout for the "green" auto industry, I'll state that I have profound doubts about the future of mass auto ownership even were we able to convert our entire fleet of 200 million trucks and autos to electric power within the next decade. Aside from the steep ramp-up in power consumption that this would entail, cars in general consume prodigious resources in the sheer volumes of space they consume, and in their construction and maintenance. I question that we will be able to make a painless switch to electric autos and just keep driving as we have for the past 65 years; and in general, I tend to doubt that there is a technical "silver bullet" that will rescue us from a century and a half of prodigiously wasteful resource consumption and severe population overshoot.

However, if we are to retain any renmant of technological amenity and the civilization it has made possible, we will need every technical advancement we can get, in combination with conservation and a complete reversal of the public policies of the past century, that almost mandate the misallocation and wasteful consumption of resources. We will need everything we can bring to the table, whether it's urban agricultural stations and community gardens, geothermal heating and cooling, candle making and fabric-weaving, food co-ops and farmers' markets, innovative automotive and transportation technologies, new nuclear technoligies, a major revamping of land-use policies in all municipalities, or recycling of goods.

And let me say that I hope like anything for technical solutions. For, while I'm trying to prepare myself psychologically, financially, and physically for a steeply reduced standard of living with a much lower level of tech amenity, this is surely not what I'm hoping for, and I still nurse the hope that there are solutions that will not only make it possible to retain basic tech amenities through the inevitable drawdown and eventual depletion of our fossil fuel supplies, but take us to the next level of advancement, if that is possible.

But if there are technical solutions to our resource predicament, they sure as hell aren't going to come from our political leaders and policy makers, nor will they be achieved by bankrupting the treasury to "rescue" bloated old-tech companies and continuing to fund scientific research that has dead-ended for 30 years, like the Tokamak fusion reactor that has yet to sustain a reaction for more that a tenth of a second and into which we are continue to shovel billions of dollars of federal funds a year. In fact, it could be argued that the policymakers and entrenched bureacracies at all levels, federal, state, and local, are the biggest obstacles in the task of revamping our physical environment and technical platform for sustainability, notably because of their commitment to supporting outdated industries and technologies by lavish funding, and their power to allocate billions of dollars and promulgate policies that become set in stone and whose effects cascade and amplify down through decades.

The hundreds of billions of dollars commited to sustaining failing companies and their outdated, low-quality products, is taken from emerging companies pioneering innovative products that could constitute solutions to our problems; we are thereby murdering the emerging companies that could provide us with solutions, in order to provide expensive life support to doddering, corrupt, uncompetitive businesses that should have been allowed to die natural deaths decades ago. The playing field is thus steeply tilted, by government policy and funding, toward sustaining the unsustainable, in this case automobile makers who have slid steeply downhill for three decades, thanks mostly to their unwillingness to do what it takes to remain competitive. GM and the other Detroit automakers have been welfare recipients for decades, surviving by a combination of policies and laws promulgated to favor them, as well as defense contracts that enable them to make a lavish living while producing outdated, low-quality products that show poorly against their foriegn competition.

GM has been given a short time frame to restructure and to generate a new business model that meets the criteria of Team Obama, to qualify for federal assistance. Bankruptcy is probably inevitable, and that means that thousands of jobs will disappear and that compensation and benefits for employees at all levels will have to be steeply adjusted downward. In other words, these jobs will be lost no matter what, for GM in its current bloated form is simply unworkable. However, it's hard to believe that our politicians and Beltway policy makers can do a better job of running GM and building autos than even the people in charge now, who've run the place into the ground.

Why not just let nature take its course and bury the old dinasaur, and let Tesla and other innovators at least have a level playing field, instead of having to ante up taxes to support their old tech competition?

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