In the new issue of Newsweek, Fareed Zakaria poses a few questions to Al Gore. The piece is interesting, as they talk about Gore’s unsuccessful attempt to pass an increased gas tax and a number of other timely topics, but I found this exchange on the possibility of a bailout of the Big Three to be particularly noteworthy.
ZAKARIA: Would you bail out the carmakers?
GORE: Whatever assistance might be forthcoming should be focused on speeding the changes that are absolutely essential to ensure that our companies are competitive in the global marketplace. When I was vice president, I initiated a program called the Partnership for a New Generation of Vehicles. The federal government invested over a billion dollars in partnership with the Big Three to focus on the accelerated development of advanced high-efficiency vehicles. But as soon as they felt they were off the hook at the end of 2000, they pulled the plug and walked away.
OK, here’s a crazy idea. What if we do invest that $25 billion in electric vehicle research, but we give every dime not to the Big Three, but to Honda and Toyota, with the understanding that they build plants and create jobs here in the United States? Or, better yet, Michigan? And I’m not kidding. If we’re really intent on significant change, and if the future of the planet really hangs in the balance, why would we give the money to three companies that have proven to be criminally irresponsible and devoid of vision at every turn? Why not give the money instead to companies that are likely to keep moving the ball forward?
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Based on occupant (driver/passenger) miles …
The Big Two will get Federal dollars to re-tool “X%” of their plant capacity to 1) reduce personal transportation production by 25% by the end 2009, 25% by the end of 2010 and by 30% by the end of 2011 … continuing until half of the occupant transportation miles are on public transportation of any and all kinds.
I would also support Tom Freidman’s idea of per gallon of gas/ethanol and diesel (all at the same price) of $4.00 … with the excess tax going to help fund the “bailout.”
#2 is the 4.00/gallon deal.
I like the idea of a gas tax funding a new transportation industry in America. I’d prefer rail to auto, but I assume that both could be done concurrently. I doubt that the current leadership of the Big Three would be the right partners though. Why not look to a new companies like Tesla Motors or Project Better Place?
Would these new Honda/Toyota jobs be unionized (as opposed to all existing Honda/Toyota plants in the U.S., as far as I know)? If not, and in general, if this crisis or a bailout is used to break the auto unions, I think it will end up doing more harm to the U.S. economy than good (reduced wages hurting local businesses, etc).
Dan La Botz has had several good posts on this issue at MRZine.com, arguing that autoworkers and their supporters should take the initiative to suggest green solutions, since the Big Three management will most likely not. Here’s one: http://mrzine.monthlyreview.org/labotz251108.html
and another (pre-bailout vote, but with a good analysis of the situation): http://mrzine.monthlyreview.org/labotz181108.html
I agree with Aaron. My Dad is 57, works at the Warren Assembly Plant and is in pretty big trouble right now. I’m for changes that improve the envirmonment, but I can’t help being biased about wanting the Big Three to change for the better. It probably has to do with the fact that I’ve lived a good life due to the UAW. If the UAW busts, do you all think Honda and Toyota are going to keep their wages competitive with the UAW’s? I’d bet new worker’s wages will go down significantly.
You, of course, make a good point about the unions. Although I think lately unions have done a terrible job of articulating their value to the average American, I believe in what they do, and would hate to see the advances they are responsible for rolled back (as I’m afraid they will be). Unions are, on the whole, a very positive thing. My point in the post was merely to suggest that our Big Three have shown very little vision over the past several decades, and remind people that they’ve often paid lip service to reform, as Gore points out. They aren’t, in my opinion, reliable partners going forward. By saying that, I wasn’t trying to infer anything about the unions. I realize there are some who blame the unions for the current problems of the Big Three. I’m not one of those people. Granted, they might have pushed harder to see global warming and fuel efficiency addressed, but, at the end of the day, it’s management that’s responsible… I hope that’s at least a little more clear… And thanks for the links. I’ll check them out.
Maybe Toyota and Honda can have the money if they accept the unions? You can include the startups in the process as well. Giving more money to failing criminally negligent corporations isn’t the answer, though, IMHOP.
The Japanese companies do fine without the unions.
If having our government give away massive amounts of money is such a great idea, why not just give 700 billion to every man woman and child on the planet?
So, like, let’s give the money to non-US companies that will take the profits out of the US, further weakening our economy. Better to seed the money in innovative new transportation ventures here in the US. Let’s get some of that entrepreneurship out of garages and into the marketplace.
I think the $25 billion should be linked to government foreign trade policy changes, where we force trading partners to accept American vehicles 1 for 1. Some countries have huge advantages in this area.
I am tired of our government letting other economies beat up on ours to grow their own. The worldwide economy is a parasitic environment, where the host is now not healthy.
its time to impose tarrifs on all foreign companies for the idea of trying to further capitalisim via this “free trade” has failed miserably !
Protectionism never works. The truth is that foreign companies invest heavily in the US and create US jobs plus they create competition which forces our guys to make better products that are affordable.
If there was no competition, they’d just give us whatever crap they wanted to and we’d have to live with it. Like East Germany. They only had one kind of car. It sucked and it was really expensive.
As for my opinion, this isn’t protectionism. It is an attempt to redress the protectionism we let other countries use to grow their economies against the American economy.
Many countries impost low quotas on the card we can sell their, while they get 2x, 5x, 10x as many cars to sell here.
Lets face it, all the industrial nations pretty much consume whatever cheap and available resources they can to build their economies.
I favor competition, but there should be a level playing field.
I also definitely think Cerberus should step up and handle Chrysler itself.