Archive for December, 2008

The Greatest Generation Speaks to the Auto Industry

December 10, 2008

As we watch the spectacle of the Big Three automakers returning to Washington to plead for a bailout, and our government’s remarkably bumbling response, we should keep the following simple fact in mind:

At the beginning of World War II, the entire U.S. auto industry, then the largest industrial manufacturing center in the world, completely converted from making passenger cars to making military vehicles, including tanks and airplanes, in less than one year. Less than one year.

They went from producing 4 million cars in 1941 to virtually none in 1942-1944, as they pumped out almost a quarter million aircraft, along with tens of thousands of tanks and additional military vehicles.

Although we rarely hear about it, this would seem to be one of the greatest feats of “the greatest generation,” and one with extreme relevance to our current situation. Because the precipitous drop in auto sales, while an extraordinary challenge for the automakers and our economy, is also an extraordinary opportunity: not only to start retooling our economy, but also to confront the equally if not more urgent challenge of climate change.

Remember, from the critical climate perspective the drop in car sales is a very good thing – we want people to be driving less, and burning way less gas, if any, when they do. As with many critical issues today, the convergence of economic, energy and climate crises provides a very clear path forward – if anyone in government is willing to even suggest it, let alone make it happen.

Unfortunately, Congress shows every sign so far of getting this latest challenge completely wrong.

For starters, they asked the CEOs of the failing companies to come up with their own “recovery” plans. In World War II, Roosevelt created government agencies to help plan the automakers’ conversion.

While it might seem reckless to let this Congress near any failing business with our money – after all, these are the same folks who approved the failed Wall St. bailout – there are experts they can and should recruit to guide the process. Leaving it in the hands of the corporate CEOs who have been most resistant to change, and who have led their companies to this precipice, is lunacy. Not to mention galling, when you consider that those recently unveiled plans involve slashing tens of thousands of jobs and reducing the health care benefits of their unionized work force. Just what our economy needs – more jobless Americans without health care!

More importantly, Congress seems to have already lost the central focus, let alone any true vision.

What is critical is that any plan for the auto industry needs to begin and end with its transformation into the engine of a new, green transportation system – and quickly, like a previous generation of Americans was able to do in another time of grave danger. This is precisely how the industry’s crisis can be turned around to create jobs, address the energy crisis, and begin to mitigate the climate crisis of global warming.

Regrettably, Congress seems to get easily distracted by side issues such as how the CEOs traveled to Washington, or how quickly they will repay loans. If Congress were to pay any attention to the lessons of the “Greatest Generation,” and attend to the central focus of transforming the auto industry, it would go something like this:

First, convert to making hybrids and electric cars, now. Plans for additional modest increases in fuel efficiency are years late and wildly inadequate. (The law passed last year by this same Congress mandated fuel efficiency standards, for 2020, that are already surpassed by countries like France and China!) There is no reason this conversion should take years. We had functioning electric cars on our roads fifteen years ago – before the auto and oil industries killed the program – and other nations are planning fleets of such vehicles right now. We could be the leaders in this technology – or should we wait until the polar ice caps melt completely and gas goes up to $7 a gallon?

Second, start manufacturing vehicles for mass transit. Americans responded appropriately to record high gas prices this year by flocking to public transportation, and mass transit is an absolute prerequisite to deal with the economic, energy and climate crises we are facing. Fortunately, buses, rail and subway cars use the same raw materials as automobiles. Yet every time I ride the Metro here in Washington D.C. I am reminded that its light rail cars are made in Italy. Why?

Recycle and reuse. Speaking of raw materials, another aspect of our economic crisis is that we’re running out of them. A smart, green economy should be a zero waste economy – so while we are retrofitting the auto industry, why not make it a model for industrial recycling?

None of this is any more difficult that what other generations of Americans did during World War II, and the need for bold, radical transformation is just as urgent now as it was then. If the CEOs won’t go for it, then why not get rid of them?

Hell, why not just nationalize the companies? Incredibly enough, our government could buy all the publicly owned stock in General Motors for only a fraction of the $18 billion they are now asking for in loans – and that’s $18 billion they will likely flush down the toilet anyway, since they clearly have no idea how to fix the problem.

Of course, the problem isn’t simply the CEOs of the Big Three automakers. It is our Congress – decades of kowtowing to corporate America (including the auto industry) while taking their money has apparently left them bereft of both vision and backbone.

When Franklin Delano Roosevelt announced the unprecedented arms production goals in his State of the Union address on January 6, 1942, he concluded “Let no man say it cannot be done.”

As our generation confronts an equally great crisis, is there anybody in our government who is willing to step forward and say what can – and must – be done today?