Business as usual is dead in Detroit

[Blue Oval Staff]

article link

[retro-man]

Not that any of that has been a secret to anyone paying attention to the inevitable collapse of the Detroit Auto way. It was built over the postwar years on the three-legged stool of cheap gas, big vehicles and a labor-management relationship that proved ill-suited to the flexibility demanded by new competitive pressures in a global world.

"That set of conditions has permeated everything Detroit has done for the past 50 years," said John Casesa, managing director of Casesa Strategic Advisors in New York.

"The reality is there's no longer growth in the United States and there are good alternatives for consumers. And the domestic companies have struggled to globalize their business to fend off the superior alternatives that the Japanese and the Koreans, in particular, have offered."

 

Bolds and italics mine. Anybody besides me see the obvious correlation here? Global world? Growth shifted from the U.S.? Again, all around me I see blind, unquestioning acceptance of the globalist agenda - amid increasingly grim news for the "middle class" (have to put it in quotes now, since it barely exists any longer in the way I once understood it) - with no discussion whatsoever of the costs (stable communities, a democratic society, a sense of optimism for the future, cultural and economic diversity in the world), or possible alternatives (go back to making our own stuff, creating and keeping our own wealth, controlling our own destiny). Why is every political figure talking about this (Perot, Buchanan, Nader) so routinely and roundly marginalized?

[RichardJensen]

Don't blame 'globalization' for the decline of the middle class. Blame the unions' inability to secure representation for unskilled workers in the new industries (retail & service).

[RangeRover]

Don't blame 'globalization' for the decline of the middle class. Blame the unions' inability to secure representation for unskilled workers in the new industries (retail & service).

 

No, blame American Leadership for not demanding reciprocity on free trade. America is open to any and everyone. We are killing the American Middle class and there is no end in site. The problem is not globalization, it is the free trade policies of the U.S. that allow foreign competitors to exploit our markets while protecting their own!

[sparks will fly]

Don't blame 'globalization' for the decline of the middle class. Blame the unions' inability to secure representation for unskilled workers in the new industries (retail & service).

 

Pass the pipe please!

 

By the way this is the same media that will not take on the politicial parties or anyone in D.C. Can you say spoon fed?

[630land]

No, what's dying it the idea that you get a plant job out of High School, or even 10th grade, becausee your father worked there, and you just showed up and threw parts on products going by. As if the only good job is to work at a car plant, and that is it.

 

Also dead is churning out junk cars and slapping rebates on them, since only 'broads and poor saps' buy them. And the real men buy big trucks for the profits, so that is where the only $$ is.

 

And, no the President is not going to ban imports, and give checks to people to buy trucks.

 

Basically, some people got to wake up and smell the coffee. 1965, when full sized cars ruled is gone, along with 1998, when full sized trucks were supposed to take over by 2001.

Edited September 17, 2006 by 630land

[RichardJensen]

Pass the pipe please!

 

By the way this is the same media that will not take on the politicial parties or anyone in D.C. Can you say spoon fed?

What?

 

You think Wal-Mart CAN'T pay a living wage to its employees?

 

No, wait, Wal-Mart employees are TOO STUPID to unionize.

 

That's the ticket.

 

It's not that the unions have made no effort to penetrate the service sector, and that their never-ending political game playing and reputation for corruption have given them a foul smell to most service sector workers.

 

It's not that at all.

 

It's the service sector workers.

 

They're too stupid, uneducated, illiterate, whatever, to join a union.

 

Come off it. The decline of the union has coincided with the decline in the middle-class. Non-skilled employment in non-unionized sectors has gone through the roof in the last 30 years, while non-skilled employment in unionized sectors has steadily decreased.

 

The unions went a long way to address the distribution of wealth a hundred years ago.

 

This time around, though, it seems all the AFL-CIO wants to do is reminisce, lick wounds, and grumble about globalization.

 

I think the efforts of people at the SEIU, if successful, will do more to revitalize the middle class than any howling about globalization.

 

What the SEIU is lobbying for, among non-skilled workers at retailers and other businesses is very attractive to the people that hold those jobs. The idea that one should be able to live comfortably on the pay of a 40 hour a week job is not one that should require a hard sell.

 

But, I've forgotten, the service sector employees are too stupid to unionize.

[retro-man]

No, blame American Leadership for not demanding reciprocity on free trade. America is open to any and everyone. We are killing the American Middle class and there is no end in site. The problem is not globalization, it is the free trade policies of the U.S. that allow foreign competitors to exploit our markets while protecting their own!

The only country whose import policy we should be setting is our own. We don't have a right to demand that anybody buy our stuff. If they want to protect fledgling industries, or domestic agriculture, that's their business. And if we want to protect ours, that should be our business. To hell with WTO.

 

 

And, no the President is not going to ban imports, and give checks to people to buy trucks.

 

Basically, some people got to wake up and smell the coffee. 1965, when full sized cars ruled is gone, along with 1998, when full sized trucks were supposed to take over by 2001.

 

We don't need to be talking about clunker Belvederes or profligate SUVs. The U.S. could be taking the lead in developing new types of vehicles that would protect the environment and end dependence on foreign oil. If we did, how many countries would be interested in licensing or buying that technology from us? As it is, there is a very high likelihood that China - of all places - will assume a leading role in that field. They are already doing a lot of work in sustainable building and energy, and constitute the largest market at the moment for those technologies. I expect them to begin similar initiatives in transportation once their industry gets out of the cradle and on its own two feet. But they have some freedom to pursue initiatives that don't necessarily boost the stock price right next week. We evidently don't. Between our short-term oriented system of investment finance, the undue influence of its chief beneficiaries (as compared to, for example, scientists) on our government, and our slavish adherence to the misguided Utopianism of the "free trade" regime, we don't stand a chance. Don't think I'm holding China up as some kind of model to emulate - I'm just pointing out that we have some serious systemic weaknesses that should be looked at. What you are seeing happening at Ford right now, is exactly the fruit of our systems of investment, finance, and regulation. There are other scenarios besides the one being shoved down our throats at the moment. It just takes some imagination to see them.

Edited September 18, 2006 by retro-man

[630land]

One other thing, all the 'Real Americans' and "Real Men' who 'Buy American' and demand it, voted GOP. Giving the money grubbers more power to make 'forced takeovers' of companies, so they can lay off workers.

 

It aslo brought in Enron and other carpet baggers taking $$ from the 'solid middle class' who voted GOP thinking they would be 'safer' and 'pay less taxes'. Pay less taxes is right, they are paying less income tax since they make less income!!!

 

The old saying is true 'careful what you wish for'.

Edited September 18, 2006 by 630land

[xr7g428]

Time to take your eye off the rear view mirror. We are not going back to 1960.

 

The future of the middle class is not tied to working on an assembly line.

 

The great jobs of the next generation will probably be doing something that has yet to be invented. The great jobs today are at Microsoft and Motorola. Their day will also pass. The magic of America has never been the preservation of the status quo.

 

What if we put the pieces together that we already have: Solar panels cover the roof of every house. In every garage there is a compact hydrogen generating station. The hydrogen source: waste water. Hydrogen is stored in new hollow metal alloys that soak up hydrogen like a sponge, but only release it gradually. At night your car recharges its hydrogen stores from your home system. The product of hydrogen combustion is extremely pure water.

 

Who might do this? Maybe it will be an auto worker that went back to school and then started using the mind that had been wasted, tied to the monotony of the assembly line by a wage that was just good enough to keep him from looking further.

[Guest Sixcav]

Time to take your eye off the rear view mirror. We are not going back to 1960.

 

The future of the middle class is not tied to working on an assembly line.

 

The great jobs of the next generation will probably be doing something that has yet to be invented. The great jobs today are at Microsoft and Motorola. Their day will also pass. The magic of America has never been the preservation of the status quo.

 

What if we put the pieces together that we already have: Solar panels cover the roof of every house. In every garage there is a compact hydrogen generating station. The hydrogen source: waste water. Hydrogen is stored in new hollow metal alloys that soak up hydrogen like a sponge, but only release it gradually. At night your car recharges its hydrogen stores from your home system. The product of hydrogen combustion is extremely pure water.

 

Who might do this? Maybe it will be an auto worker that went back to school and then started using the mind that had been wasted, tied to the monotony of the assembly line by a wage that was just good enough to keep him from looking further.

 

Creative thought? Here? Ingenuity? No, no, this is not permitted!!! How did you get past the dead head monitors? lol

 

Good post buddy.

[sparks will fly]

What?

 

You think Wal-Mart CAN'T pay a living wage to its employees?

 

No, wait, Wal-Mart employees are TOO STUPID to unionize.

 

That's the ticket.

 

It's not that the unions have made no effort to penetrate the service sector, and that their never-ending political game playing and reputation for corruption have given them a foul smell to most service sector workers.

 

It's not that at all.

 

It's the service sector workers.

 

They're too stupid, uneducated, illiterate, whatever, to join a union.

 

Come off it. The decline of the union has coincided with the decline in the middle-class. Non-skilled employment in non-unionized sectors has gone through the roof in the last 30 years, while non-skilled employment in unionized sectors has steadily decreased.

 

The unions went a long way to address the distribution of wealth a hundred years ago.

 

This time around, though, it seems all the AFL-CIO wants to do is reminisce, lick wounds, and grumble about globalization.

 

I think the efforts of people at the SEIU, if successful, will do more to revitalize the middle class than any howling about globalization.

 

What the SEIU is lobbying for, among non-skilled workers at retailers and other businesses is very attractive to the people that hold those jobs. The idea that one should be able to live comfortably on the pay of a 40 hour a week job is not one that should require a hard sell.

 

But, I've forgotten, the service sector employees are too stupid to unionize.

 

Gee I don't know my first job in high school was in a store that was union. The checkers, clerks, and meat cutters were all union. Then in our city we had one guy Bob Lewalllen who had a strike at his stores and left them out , changing to IGA and the progress of union run stores started it's decline. In fact this was one of the first places the the unions lost thier stronghold in our area as well as the country. I do remember my grandfather calling Bob a no good SOB, because of this, you see he was a union butcher and seen what was happening then would only lead to where we are now.

 

If the Wal-Mart greeters of this world did organize maybe they wouldn't be so scared to take a lunch in fear of getting the axe. Part of what this country needs is a little more respect when it comes to employee's not just Wall Street.

[RichardJensen]

If the Wal-Mart greeters of this world did organize maybe they wouldn't be so scared to take a lunch in fear of getting the axe. Part of what this country needs is a little more respect when it comes to employee's not just Wall Street.

And whose taken up the resposibility of obtaining respect for employees (especially employees in non-skilled/semi-skilled occupations?

 

Federal Courts have overturned a law in Maryland that penalized Wal-Mart for increasing Medicaid payrolls because the company, as a matter of practice, does not pay working mothers a living wage.

 

There is an opportunity for the unions to do more than just bellyache about Wal-Mart buying stuff from China.

 

The unions can get involved getting better pay and working conditions for Wal-Mart employees.

 

Sadly, these same unions as much as Ford or GM, must realize that a substantial section of the public sees them as dinosaurs, as obstacles to progress, as the purveyors of damaged goods, and some see them as irretrevably broken.

 

If I worked at Wal-Mart, and the Teamsters were trying to unionize the place, I'd have to think long and hard about who was going to screw me over worse.

[retro-man]

Time to take your eye off the rear view mirror. We are not going back to 1960.

 

The future of the middle class is not tied to working on an assembly line.

 

The great jobs of the next generation will probably be doing something that has yet to be invented. The great jobs today are at Microsoft and Motorola. Their day will also pass. The magic of America has never been the preservation of the status quo.

 

What if we put the pieces together that we already have: Solar panels cover the roof of every house. In every garage there is a compact hydrogen generating station. The hydrogen source: waste water. Hydrogen is stored in new hollow metal alloys that soak up hydrogen like a sponge, but only release it gradually. At night your car recharges its hydrogen stores from your home system. The product of hydrogen combustion is extremely pure water.

 

Who might do this? Maybe it will be an auto worker that went back to school and then started using the mind that had been wasted, tied to the monotony of the assembly line by a wage that was just good enough to keep him from looking further.

That's not different at all than what I'm talking about;

"The U.S. could be taking the lead in developing new types of vehicles that would protect the environment and end dependence on foreign oil. If we did, how many countries would be interested in licensing or buying that technology from us?"

and it's a great vision. But those are things that will never be accomplished with the quick return mentality that rules at present. The Tennessee Valley Authority, Bonneville Power Administration, Rural Electrification Program, Interstate Highway Program - all things that ultimately lead to great prosperity for citizens and industry alike, were never profitable from the beginning. Some of them were never directly profitable at all - yet they contributed to 20th Century American ascendance. They were big, collective (there's a dirty word for you) long-term, speculative ventures. So is hydrogen, wind, and solar going to be. And I see nothing in the way we are doing things right now that is going to put us ahead of the curve on any of those things. We are following, not leading. Countries where those things are more critical (like China, Japan, Germany) to their well-being are going to have the jump on us, while we naively wait for the market to catch up. The probability at present is that your auto worker is going to be making $10.00/hr. selling Chinese curtain rods at Home Depot, with 1/3 of that going back to health care for his family - or he will relocate to the South, away from the support network of lifelong family and friends losing all the social capital that goes with that. Of course it's not the first time in our history that communities have been uprooted. I just thought we could do better than a replay of the Irish potato famine (which, incidently, brought Henry Ford here).

[xr7g428]

That's not different at all than what I'm talking about; and it's a great vision. But those are things that will never be accomplished with the quick return mentality that rules at present. The Tennessee Valley Authority, Bonneville Power Administration, Rural Electrification Program, Interstate Highway Program - all things that ultimately lead to great prosperity for citizens and industry alike, were never profitable from the beginning. Some of them were never directly profitable at all - yet they contributed to 20th Century American ascendance. They were big, collective (there's a dirty word for you) long-term, speculative ventures. So is hydrogen, wind, and solar going to be. And I see nothing in the way we are doing things right now that is going to put us ahead of the curve on any of those things. We are following, not leading. Countries where those things are more critical (like China, Japan, Germany) to their well-being are going to have the jump on us, while we naively wait for the market to catch up. The probability at present is that your auto worker is going to be making $10.00/hr. selling Chinese curtain rods at Home Depot, with 1/3 of that going back to health care for his family - or he will relocate to the South, away from the support network of lifelong family and friends losing all the social capital that goes with that. Of course it's not the first time in our history that communities have been uprooted. I just thought we could do better than a replay of the Irish potato famine (which, incidently, brought Henry Ford here).

 

To say that things will never be accomplished without a large government program is bizarre. Almost every other facet of American life was NOT created by government intervention. The difference between America and most of the rest of the world is what we can do without the intervention of government. We call it opportunity. It seems that many of the autoworkers have been convinced that they could never be as successful as they are without the company and the union. I would suggest that just as many could have made much greater contributions to society, and themselves, had they started their own businesses, or worked in other jobs where their intelligence and hard work would have been better utilized.

 

I see a lot that tells me we will lead the curve. When gas is $3 here, everybody and his brother is thinking of ways to replace gasoline, and how much money they can make by finding solutions. The difference between Americans and just about everybody else is that we are not satisfied with less, we will have our cake and eat it too.

 

As with almost every innovation, the solutions will come when some one sees how to put the pieces of the puzzle together. The availability of ideas and information is so great today that the formation period will be much faster than ever before in history. The only factor that will slow down the process is a rapid decrease in the price of oil, removing the motivation for innovation.

 

If an auto worker ends up selling curtain rods at Home Depot, that is a personal tragedy. I am of the opinion that most auto workers are capable of so much more than that. Do you really believe that the only options are retail and auto assembly? You might want to check out what your neighbors are doing for a living. There are more options out there today then ever before. Very few Americans are doing low-value-added manufacturing, other people, in other places, are willing to do it for far less money. As it turns out, just about every other part of getting a product to market adds more value, and pays better, than assembly work.

 

The true irony of the situation is that the "import" manufacturers are adding automotive assembly almost as fast as Ford and GM are shedding it. And it seems that they are having no problem finding plenty of workers. It appears that the tipping point for competitiveness lies at what the transplants are offering. It might behove the companies, and the UAW, to find a way to match the transplants. Recent history suggests that Ford and GM will not be able to, year after year, create the high value designs that would allow them to cover the inequity in costs.

 

History may well show that the emphasis on SUV's and trucks was based on the necessity of high margins to cover costs higher than the transplants. Cars just did not offer enough margin to float the boat. Perhaps it was simple economics, not ineptitude, that caused the failure of Ford and GM to continue with the development of their car lines. Time will tell.

[RichardJensen]

When gas is $3 here, everybody and his brother is thinking of ways to replace gasoline, and how much money they can make by finding solutions.

Of course........ in all fairness............

 

Most of those replacements are being subsidized by the gov't.

 

Or the gov't is paying for research.

[grbeck]

Bolds and italics mine. Anybody besides me see the obvious correlation here? Global world? Growth shifted from the U.S.? Again, all around me I see blind, unquestioning acceptance of the globalist agenda - amid increasingly grim news for the "middle class" (have to put it in quotes now, since it barely exists any longer in the way I once understood it) - with no discussion whatsoever of the costs (stable communities, a democratic society, a sense of optimism for the future, cultural and economic diversity in the world), or possible alternatives (go back to making our own stuff, creating and keeping our own wealth, controlling our own destiny). Why is every political figure talking about this (Perot, Buchanan, Nader) so routinely and roundly marginalized?

 

If I read the column correctly, Mr. Howes is saying that the U.S. auto market is a mature one, which means little or very slow growth. At the same time, there are more players OVER HERE, fighting for a share of a largely stagnant market. In other words, the U.S. market is evolving in the direction of the European automobile market, which is marked by little or no growth.

 

In Europe, about six or seven closely matched players slug it out for each percentage point of market share, and no one company dominates as GM did in the United States from 1941-1986. For that matter, even Ford's 25 percent share of the American market (which it held fairly recently) is unheard of in Europe.

 

It's not that growth has shifted from the U.S, it's more that the American market is entering a new phase, and GM, Ford and Chrysler are ill-prepared for that shift. We've all known this for years - it has been voiced on this site many times by many posters since I started posting here in July 2000 - and now the you-know-what is hitting the fan.

 

These changes have been brewing for the last 15 years. The brutal truth is that once Ford and GM ceded the family sedan market to Honda, Toyota and, to a lesser extent, Nissan, there would be no turning back. This happened in the mid-1990s. Today's consumers aren't going to swap their perfectly good Honda Civic or Toyota Camry for a Ford or Chevy because of appeals to economic nationalism or the idea that no UAW worker should ever lose his or her job.

 

Another brutal truth is that there is no need for three large automakers cranking out millions of vehicles of middling quality and performance under brand names that lost their meaning decades ago. The days when consumers viewed a Pontiac as a step up from a Chevrolet, or a Mercury as a step up from a Ford, are long gone. Combine too many brands competing for the same customers with too much capacity for the market, and you have a train wreck that has only been delayed by massive incentives and sales to fleet customers. Those practices, however, have further destroyed the brand images of Detroit marques.

 

The only domestic brands with any real meaning and image remaining are Chevrolet, Cadillac, Chrysler, Jeep and Ford. Three second-tier brands that have possibility are GMC, Dodge and Saturn - GMC for its luxurious trucks; Dodge for trucks, the Hemi and the Charger; and Saturn for its friendly dealers and excellent customer service.

 

The rest - Pontiac, Buick, Mercury and Lincoln - have no real image or prestige, and, quite frankly, most people under the age of 50 don't even know or care whether they still exist. Here's another brutal truth - brands should be kept around because customers want them, not because the dealers still exist, or (rapidly dwindling) fans can't stand to see their favorite marque euthanized, no matter how badly it is warranted. The country didn't collapse when Oldsmobile and Plymouth went away - and I say that as someone who was once a member of the Oldsmobile Club of America, and grew up on a steady diet of Oldsmobile Delta 88s.

 

The nation will survive this, and so will our manufacturing capacity. This is still a good place to make vehicles - otherwise, why would Toyota, Honda, Nissan and Hyundai be investing lots of money and effort into establishing an American product development and manufacturing base? The problem is that there isn't a place at the table for the old business paradigm established by GM, Ford, Chrysler and the UAW. They either adapt or die. It's that simple. But it's not the end of the world, or even the end of the American middle class.

 

Like it or not, we'll be seeing a very different Ford Motor Company within the next 5 years, if it survives this latest crisis. One hopes, however, that it is a better and more focused Ford Motor Company than the one we have now.

Edited September 19, 2006 by grbeck

[retro-man]

To say that things will never be accomplished without a large government program is bizarre. Almost every other facet of American life was NOT created by government intervention.

 

And to deny the contribution of government programs to our past prosperity is to have had your history given to you by talk radio. And to have believed it! From the very first Continental Army right down to the public schools, postal service, the Lewis and Clark expedition, the transcontinental railroad (authorized by the Pacific Railway Act of 1862 under President Abraham Lincoln, and heavily backed by the federal government), the Interstate Highways (Eisenhower), the BPA and TVA (Roosevelt), "large government programs" had everything to do with what America was able to become in the 20th century. We used to understand that there is a value to public spending, to collective endeavor. Lately, we have this extreme view that all of it (unless it is flowing back to the shareholders of KBR) is bad.

 

The true irony of the situation is that the "import" manufacturers are adding automotive assembly almost as fast as Ford and GM are shedding it. And it seems that they are having no problem finding plenty of workers. It appears that the tipping point for competitiveness lies at what the transplants are offering. It might behove the companies, and the UAW, to find a way to match the transplants. Recent history suggests that Ford and GM will not be able to, year after year, create the high value designs that would allow them to cover the inequity in costs.

 

History may well show that the emphasis on SUV's and trucks was based on the necessity of high margins to cover costs higher than the transplants. Cars just did not offer enough margin to float the boat. Perhaps it was simple economics, not ineptitude, that caused the failure of Ford and GM to continue with the development of their car lines. Time will tell.

 

I do agree with these last two paragraphs though. Good analysis.

 

Still, a.) I'm not sure we need to see communities uprooted and people migrating like dustbowl days to make our economy work, and. And b.) It also pains me to see so many cases of both the social and the legal contract broken, when so many people, who worked so many decades in good faith, see the pensions and benefits they were promised and counting on, pulled out from under them. Shrugging our shoulders at the very real misery caused by this is not a response worthy of a decent people. Every single one of us (God willing we should live so long) will end up there, and I would like to think that whatever I set up - whether it be a 401K, an investment portfolio, a bank account, home equity - whatever - will not be decimated by a sudden change in the rules, just because it is no longer "convenient" to have me cash in. We make the system. It should be working for us, not the other way around.

Edited September 19, 2006 by retro-man

[grbeck]

And to deny the contribution of government programs to our past prosperity is to have had your history given to you by talk radio. And to have believed it! From the very first Continental Army right down to the public schools, postal service, the Lewis and Clark expedition, the transcontinental railroad (authorized by the Pacific Railway Act of 1862 under President Abraham Lincoln, and heavily backed by the federal government), the Interstate Highways (Eisenhower), the BPA and TVA (Roosevelt), "large government programs" had everything to do with what America was able to become in the 20th century. We used to understand that there is a value to public spending, to collective endeavor. Lately, we have this extreme view that all of it (unless it is flowing back to the shareholders of KBR) is bad.

I do agree with these last two paragraphs though. Good analysis.

 

Still, a.) I'm not sure we need to see communities uprooted and people migrating like dustbowl days to make our economy work, and. And b.) It also pains me to see so many cases of both the social and the legal contract broken, when so many people, who worked so many decades in good faith, see the pensions and benefits they were promised and counting on, pulled out from under them. Shrugging our shoulders at the very real misery caused by this is not a response worthy of a decent people. Every single one of us (God willing we should live so long) will end up there, and I would like to think that whatever I set up - whether it be a 401K, an investment portfolio, a bank account, home equity - whatever - will not be decimated by a sudden change in the rules, just because it is no longer "convenient" to have me cash in. We make the system. It should be working for us, not the other way around.

 

A few thoughts:

 

Many of those public programs you mentioned initially spurred a backlash from the LEFT, not the right. It is environmentalists who initially worked to halt major dam projects and highways...and who rallied around (and encouraged) the NIMBY mentality to oppose the expansion of those type of projects in the late 1960s and early 1970s. Later, many from the right joined in, either because they reflexively oppose more government spending, or because a particular project was proposed for location near their homes (ideology goes out the window when property values are threatened, whether said property owner is a liberal or a conservative).

 

People keep looking for a "breakthrough" that will end our use of fossil fuels. Most of the technology we enjoy today, however, was not the result of a single big breakthrough, but rather the cumulative result of several smaller advances. One advance built upon another...and set the stage for the next advance. Our dependence on fossil fuels will likely end...with a whimper, not a bang. We'll gradually phase out their uses.

 

As an example, Toyota and Honda develop and market hybrids, which may not be the complete answer, but some of the technology from hybrids is used for the next advance, which may be fuel cells, or something else. Honda has already said that it will have a fuel cell vehicle on the market by 2010; GM is also working in this area.

 

I trust Honda and GM to bring this technology to the market more than I do the federal government. Honda's solution will undoubtedly be cheaper, more reliable and probably more fun to drive than anything the federal government would produce.

 

It's also important to remember that the projects you listed were just that - PROJECTS that had a definite beginning and end. Once construction was finished, it was done. Any changes to fossil fuel use will directly impact consumer products, which must meet a whole different set of criteria and expectations (not the least of which relate to style, comfort and reliability). People also expect continual evolution of consumer products. Some of the changes with that expected evolution ends up hurting the original goals (i.e., greater occupation protection requires more weight, which hurts fuel economy). A car comes with a whole different set of expectations than a dam or a highway...

 

The federal government should set standards, and let the companies figure out how to meet them (although $3-a-gallon gasoline is a pretty good motivator in and of itself - the free market does work). It does not need to "favor" or "push" one particular solution or technology, as the government-favored solution usually has more to do with which powerful legislators' districts will ultimately benefit, as opposed to which solution actually works. This is the same whether Congress and/or the White House are controlled by Republicans or Democrats....

 

As for the predicament that Ford workers now find themselves in - Ford is buying them out, so they are hardly being thrown out on to the street. Realistically, as I've said before, these trends (i.e., domestics losing share; transplants gaining it) have been apparent for over a decade. EVERYONE in the automobile industry should have been prepared for serious changes by Ford, GM and Chrysler. Change is a constant, and people have to be prepared for it.

 

The Big Three and the UAW had a very good run from 1945-1980. Unfortunately, during those good times, they built up a lot of very bad habits, many of which affected customers through the quality of their vehicles. Said consumers decided to try alternatives from Japan and Europe, and now Korea. Lots of people liked those alternatives, and have no desire to return to the "home team." Now the Big Three and the UAW must adapt.

Edited September 19, 2006 by grbeck

[retro-man]

Point conceded that there were opposition to all of those things. Here in Washington, we have a lot of NIMBY going in opposition to windfarms sprouting along the Columbia Gorge (personally, I don't mind the sight of them at all, because I like the clean power that they represent - and I think - trust - that bird mitigation can be dealt with in time).

 

As for development of alternate fuel sources, a few companies may go out on a limb - as you know, the reasons I think Toyota and Honda were able to bring hybrids to market faster were a.) the more immediate demand for fuel efficiency in Japan, and b.) the fact that their relation to investors is more arms-length. They are able to act with a more long-term view. But when it comes to development of hydrogen and/or electric vehicle infrastructure, I have no doubt whatsoever (and I don't think you do either), that the energy companies will be lining up at the government trough - let's call it public/private cooperation. It's the only way they will be able to get past the short-term demands of shareholders. If left entirely to "the market", it would not get done until half-past the very last minute, and not without a lot of pain.

[630land]

Problem was that they were in denial about truck based SUV's, thinking the market would grow and keep going. That buyers would trade in every few years for a new big truck.

[RichardJensen]

There's a compelling read on a publication by the Minneapolis Fed, detailing efforts where government involvement is necessary/preferrable, vs. areas where private investment is better. I'll try and find a link.

 

http://minneapolisfed.org/pubs/region/06-06/kelo.cfm

 

I'm not sure I agree with the economist's generalizations about public vs. private investment, I don't think they hold true universally, however, they present about the best rule of thumb I've seen on the subject.