Last night, the US House of Representatives approved $14 billion in emergency loans to keep GM and Chrysler on life support into the new year.  Senate Republicans are in revolt though and may block passage without new amendments to allow more dramatic restructuring of the company's debt.

"If we don't have the forced restructuring plans in place, many of us don't believe that American car companies will come out of this in a competitive position and the taxpayers' money will be wasted," Senator John Ensign told the Washington Post (R-Nev.).

I hate to say it, but I'm forced to agree with Republicans on this account: $14 billion to prop up GM and Chrysler until Obama takes office is an obvious half measure, a stall tactic that will merely punt the tough decisions down the line another couple months.  While it may buy us a month or three, the proposed bailout will amount to nothing in the long term unless more dramatic actions to restructure and reinvent the American auto industry are taken.

Continue reading "Stop Stalling: Time to Hit the Reset Button on Detroit" »

By Marty Hoffert

It's hard to believe that we have to pay Detroit with massive government bailout money to get them to innovate the kind of green, high tech cars that could save their own companies. But that's the case. Tom Friedman opined recently that Steve Jobs might make a good CEO for General Motors -- Apple being a poster child for an entrepreneurial company whose business model is based on continued high-tech innovation.

Long enough have US auto companies locked in the paradigm of large SUVs and trucks subsidized by multinational oil companies and sheikdoms. Rather than go to the government, the automakers should seek financial help from the oil companies they have enriched for years. Only fair that US car makers, who profited by addicting us to petroleum gas-guzzlers (don't tell me it was consumer demand when they manipulated demand by advertising those sexy Hummers) and now face bankruptcy, should ask Big Oil for a bailout. What's $30 billion to Exxon-Mobil?

Continue reading "Energy Innovation for a Better World" »

Faced with the news that more than half a million jobs were lost last month, politicians in Congress and both the Bush and Obama administrations have been jolted into action on a bill to bailout the auto industry, whose collapse, experts say, could result in more than three million lost jobs.

In testimonies last Friday, the CEOs of Chevrolet and GM said that without an immediate cash infusion they would not make it through the New Year. Ford, while not in such dire straits, still requires a nine billion dollar line of credit to avoid catastrophic collapse.

Continue reading "Bridge to Nowhere?" »

The executives of General Motors, Ford and Chrysler made yet another trek to Washington DC this week - this time ditching the corporate jets to drive hybrid cars - and once again pled for a federal bailout to prop up their struggling companies. Up to $34 billion taxpayer dollars are apparently all that stands between at least two of the "Big Three" automakers and bankruptcy.

GM's executives told Congress the company will fail very, very soon unless it receives at least $12 billion in loans in the coming months. Chrysler warned they could go belly up by year's end without $7 billion in government aid. Even Ford, which is doing a bit better than its two Detroit brethren, is asking for an open, taxpayer-funded line of credit of up to $9 billion dollars.

All this means its time for Congress and the American public to face two basic facts.

Continue reading "Too Big To Fail? Too Big, Period." »

By Siddhartha Shome

"It's over folks"

That's how a columnist at the Detroit News described the state of the American Auto Industry. But is this really the end of the road for Detroit?

Continue reading "Energizing the Auto Industry by Investing in Innovation" »

By Robert Margolis

In 2006 this writer most likely purchased the last stick shift automobile he would own. It took weeks to find a new car that was equipped with what appears to be a fading technology. Although I enjoy the greater feeling of control provided by a manual transmission, it is most likely when I purchase a replacement vehicle, it will probably not only have a different transmission, but it will also contain many other technological differences reflecting a reinvented US automobile industry This essay will discuss both the fading technologies and the up and coming technologies (e.g., exit the stick shift and enter the continuously variable transmission) that will transform the US automobile industry.

Continue reading "How I Will Miss the Stick Shift: Reflections on the Reinvention of the US Automobile Industry" »

By Felix Kramer

Developments in Washington have become "fast and furious." From day to day, it appears Congress (especially but not only Republicans) may be insufficiently receptive to steps to keep the Detroit Three alive.

Many are focusing more on blame for past mis-steps than on a responsible appreciation of the consequences for communities and for our green automotive future if these companies go under. We hope that this turns out to be brinkmanship and that Congress will in fact act next week. (If they ignore the crisis, attitudes reflected in aphorisms like, "they made their own bed" or "let them stew in their own juices" -- or "what, me worry?" will prove to be short-sighted.)

The California Cars Initiative (CalCars.org) developed what follows as a contribution to an effort by a number of organizations to provide Washington lawmakers with specific conditions for additional federal aid to automakers. We're not suggesting this is the only criterion -- and we hope that the issue actually does come before Congress.

Next week the U.S. auto industry will fight for its life in the chambers and hallways of Congress. No one who recognizes the industry's central position -- and the lives and livelihoods that depend on its continuation -- wants to see any of the Detroit Three fail. They need immediate life support -- and a medium- and long-term way to return to growth and prosperity.

Continue reading "Setting a 2012 Milestone for the Detroit Three" »

By Jeffrey Feldman

Up to this point in our history, when Americans imagined 'the future,' they thought about cars that could fly, a cognitive frame inherited from old time TV shows like Flash Gordon and The Jetsons. Instead of that cartoon image, we would be wise to start seeing our future in terms of three far-reaching goals for the American auto industry: sustainable engines, sustainable factories, and sustainable communities.

Continue reading "Seeing Our Future In The American Car" »

With a new bailout for Detroit on the table, there's a lot of talk about getting some "grand bargain" with automakers out of the deal: automakers will agree to some terms, like producing more efficient vehicles, in exchange for the loans.

In fact, the direct loans approved by the 2007 Energy Bill require auto companies to use the funds to retool factories that produce vehicles that get 25% better fuel economy than the average vehicle in it's class. That's a start.

But the real grand bargain, in my opinion, is to bust out of this incremental improvements mentality for fuel economy. We don't need incremental improvements, we need exponential improvements in fuel economy. Here's how it could work...

Continue reading "A Real Grand Bargain: Radically Re-invent the American Automobile" »