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Why Rent When We Could Buy?

Now that Congress has balked at bailing out the Big Three automakers, their CEOs have all gone back to Detroit, not in a Ford Expedition or a Chevy Suburban or in a Lincoln Navigator, one of which would hold them all, but on their individual jets. Even President-elect Obama expressed surprise that they came only with their hands out and without a plan. He said he hoped they’d work something up before they come back.

Follow up:

When I was buying my first car, I fell in love with the Corvair. It was adorable, I thought, and economical and would just fit my image (as what I can’t even remember). The Chevrolet dealer, truly a good neighbor, took my dad aside and told him that I wouldn’t be safe. They tried to interest me in a used Impala, but instead I settled on a baby blue Ford Fairlane. Boring but serviceable. Later, I moved up to a much sexier gold Firebird, a car that’s still on the market and still not very safe.

Truth be told, Detroit flunks on the main criteria that should drive our automobile industry: fuel efficiency and safety. For years, comfort and style, driven by advertising, have been in the driver’s seat, and we can’t afford that any more.

Listening to G. Richard Wagoner, Jr., CEO of General Motors, drone on in an interview about his “team,” I could only think that there must be hundreds of entrepreneurs with fresher ideas and a will to solve problems other than by closing plants and cutting jobs. Why should U.S. taxpayers pour $25 billion into Detroit just to perpetuate vehicles like the Cadillac Escalade SUV, which GM touts as an “icon” of today’s generation? Even in its hybrid version, the Escalade gets only 21 miles to the gallon on the highway and costs around $75,000.

As one of the miniscule number of Americans who does not own an automobile, perhaps it’s facetious of me to say so, but I have a plan: we should buy out the Big Three and get to work making the kind of vehicles we need to kick our oil habit and clean up the environment. US Motors could be a viable competitor to Honda or Toyota and perhaps surpass them, and for once we would have the capability to domestically manufacture new vehicles for public transportation, especially rail transportation. Imagine how much safer our highways would be if we could get most of those monster trucks with their exhausted drivers off the road; moving their cargo to electric-powered trains would also cut pollution.

Now that our last oil price spike has subsided, and gas is cheaper once again, the temptation is to sink back into satisfaction over cars that get 20 or maybe 30 miles per gallon. But surely Al Gore has convinced us that even if the gas were free, the internal combustion engine is mucking up the air we breathe and making it more difficult to address global warming. Predictably, the right-wing Heritage Foundation is still trying to convince folks that global warming is over-rated and we should put aside our concerns to advance the economy. http://www.heritage.org/Research/EnergyandEnvironment/bg2213.cfm).

Detroit often blames the health benefits of workers and retirees as the main barrier to its success. No doubt they are a burden. According to the Center for American Progress, Detroit manufacturers spent more last year on health benefits than on steel http://wonkroom.thinkprogress.org/2008/11/18/auto-health/. The Center says that Toyota put a plant in Ontario 2005 rather than in the States, because Canada has a much better health care system than we do. But that’s not the fault of our autoworkers. By failing to deal with access to health care as a national issue, we have weighted down an entire industry that was once quintessentially USA. Reforming health care may be essential to our economic recovery rather than a burden to be dealt with. Solving the health care dilemma would bring into sharper relief the deficiencies of the auto industry’s management.

I know, I know, taking over the auto companies is socialistic, just the kind of thing Republicans said Obama was scheming to do once he got into office. But even good Republicans are against this bail out. Autoworkers and their families have suffered enough. Letting the manufacturers go bankrupt is only going to make their lives worse. Besides, as long as we’re going to sink money into the automobile industry, isn’t it better to own it than to make one bad loan after another? If we buy it, we can fix it.

7 comments

If anybody wants inspiration as to what Detroit auto industry could be (if management were not so retrograde and reactionary), follow the link to the article about Neil Young's LincVolt project.

From that viewpoint, it is OK for government to provide assistance, provided that Detroit retools autos to allow for upgradeable engines that can take advantage of fuel efficiency improvements. Neil calls these car bodies "transition rollers." The purpose of his project is to demonstrate that you can apply this technology and still have cars that are fun to look at and drive.

I just bought an '02 Subaru but I'm hoping that will be the last dinosaur internal combustible engine I ever own.
11/26/08 @ 10:34
Comment from: alice hausman [Visitor]
There are two important points made by the author. One is that we should be moving more freight via rail. (Of course, it goes without saying that we should be moving more people by train as well.)

The other is that the way we choose to provide health care in this country is affecting our economy and the life of the average middle class family. As we try to "fix" health care, we simply enrich insurance companies, HMO's, and other private companies. And each "fix" seems to make it harder for the consumer to access the high quality care that we have in abundance in this country.

My fear is that early signals from President-elect Obama suggest that truly doing things in different ways is not in his plan.

When he talks about investing in infrastructure as part of an economic stimulus package, he always mentions roads and bridges. Public mass transit and rail is not in his list. While it is important for us to fix critically deficient bridges, to speak only of roads and bridges when discussing transportation infrastructure is the "same old same old."

Second, when he speaks of reform in health care, I hear him suggest we need to provide health insurance for poor people and bring down costs. Both miss the point. As long as we continue to see universal insurance as the solution rather than universal health care, we will never have enough money. We need to learn a lesson from Canada and every other industrialized country. They have somehow figured out how to provide health care for everyone at nearly half the cost of our system. But as soon as someone makes that point even Obama's campaign backs away for fear of the "socialized medicine" or "government run health care" labels.

Unless we take the money and power away from private companies, we will never be able to afford health care for everyone that is affordable and that can never be taken away. Here is one challenge where more money is not the answer.
11/28/08 @ 08:19
Comment from: Andrew [Visitor]
Well written and engaging, as usual, Carolyn.

"If we buy it, we can fix it."

The latter half is what I worry about: I doubt that we *can* fix it. We're decades into this auto crisis, and no one has fixed it yet. It's true that crisis clarifies the mind. But there is virtually no evidence that anyone has a good idea how to solve Detroit's problems, least of all the federal gov't. Now, I'm progressive. And, therefore, I believe that it's possible that government *can* do useful things, particularly with strong, competent leadership (yay!). But this is the same federal gov't that could barely get its act together to raise fuel efficiency standards, let alone take over and intelligently retool the entire auto industry!

Call me a skeptic; call me a free marketeer. But, if Japan and Korea are already making great cars, why not let them be the ones to do that? Why not save all of the money that we're pouring into a bottomless pit in Detroit, and use it to retrain workers to do something useful in a new economy -- teaching, technology, health care.
11/29/08 @ 08:57
Comment from: Douglas Paul [Visitor]
Another good use for $25 billion would be to invest it in companies such as Tesla http://www.teslamotors.com/
which are already producing energy-efficient vehicles. I think you will appreciate its styling Carolyn. Now if only they could get the price down a bit.
11/29/08 @ 09:17
Comment from: Carolyn Jackson [Member] Email · http://www.progwoman.com
Great comments here, just what I hope to generate when I put my own, sometimes half-baked, ideas out. It bugs me, as it does Alice, that Team Obama is not looking holistically at health care but trying to patch the existing system. It bugs me that Amtrak keeps cutting routes and schedules and having preventable accidents while in Europe people zip around on trains with ease.

Yeah, I know that the federal government has trouble running things, Andrew, but under Reagan and Bush that seemed intentional. Just think how much money the government has spent trying to get Detroit to do the right thing about safety and gas mileage. If the EAP could dictate the standards, then maybe private makers like Tesla could come up with some cars we could love, but as long as the bureaucracy of the Big Three has its grip on the auto industry, I can't see the way to a green future, much less a rejuvenated economy in the upper Midwest.
11/29/08 @ 10:44
Comment from: Lida Hill [Visitor]
There's one (maybe the only) good thing left to say good about an American made car. The seat really works well with my back!

My dear '99 Camry was stolen last summer, then wrecked, so I was forced to make a decision. As Conservation Chairman for a very active Audubon Society committee, I've been "into" conservation on much more than a daily basis. But I had back problems. No amount of seat adjustments or pillow or cushion additions helped in my foreign made car.

So I shopped and shopped 'til I thought all the car salesmen in Birmingham would drop. Lots of cars had seats with many movable parts. None, however, gave me the support that I found in a used '08 Buick.

Am I sounding defensive? Well, yes, cause I am. Oh, how I'd love to drive with great fuel efficiency.

Also, however, I'm thankful. Suerly never again will I consider pulling into the emergency lane in downtown Atlanta because of the pain that was making my driving dangerous.

12/04/08 @ 07:38
Comment from: Mario Riservato [Visitor]
GOOD DESIGN SELLS ~ Especially in the last decade or two that the masses have been made aware or Design..
However,without well made safe & efficent products its no deal..
01/03/09 @ 14:37

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Random reflections on politics, the media, political activism, women's lives and spirituality, often inspired by travel, cultural events or what I read.

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