Time Right to Shake Up Detroit

Force Feed Reform to Car Makers, Add Mass, Personal Transport Systems

OhioNewsBureau

with John Michael Spinelli

Columbus, Ohio: Alaska Gov. Sarah Palin, the popular but polarizing understudy to Republican presidential nominee John McCain, repeatedly asked voters this fall to elect the Republican ticket so the duo of so-called mavericks cold "shake up Washington," a wish that didn't come true. But it's a good thought nonetheless for what Washington ought to do now with Detroit, as America's Big Three automakers make a case that another draw-down of bailout money is needed to prevent millions more workers from receiving pink slips.

With $175 billion in value and about three million American workers hanging in the balance if Detroit goes under, Motown automakers Ford, Chrysler and General Motors want the money but no oversight. Their dream parallels how banks were treated recently by Bush administration Treasurer HenryPaulson , who only a few months ago said the nation's economy was strong and resilient but who then suddenly rushed to Washington lawmakers, saying $700 billion would be a good starting place to keep the economic sky from falling on Wall Street and Main Street.

Palin's plan to "shake up Washington" as if it were a glass snow ball just to see where the flakes fall sounded good on the stump but would have been disastrous in practice. But the Palin-in-a-China-Shop strategy might be just what the times call for now in Detroit. America is toally hooked on cars, and has been ever since industry pioneers like Henry Ford wanted to get people off the train and into a car. But in the hundred years or so since gentlemen and later ladies turned the ignition key to start their engines to see the USA and come to love their car in the process, the need to rebuild our lost mass transit systems becomes a new call to arms. We need to seek viable, affordable and efficient alternative modes of transportation that reduce the need for foreign oil, help the environment by reducing auto emissions and move people efficiently from place to place while creating precious middle-class jobs along the way.

When an industry is as thirsty as the Big Three are for working capital that may keep them from slipping into bankruptcy status as consumers spend less on durable goods and especially cars, arguing whether a parched traveler is given water or wine in either a tin cup or leaded crystal seems immaterial and silly. Some lawmakers have it right: if you want a handout from Washington to keep your company (car or bank) from going out of business because your product is wrong for the times, then Detroit should be told they are not only going to design and manufacture a new, high-mileage, affordable "people's energy car" that Americans will want to buy and will be incentivized to buy, but that they will also open their vast facilities to the new kids on the block -- high-speed passenger rail and personal rapid transit.

Tom Friedman, a Pulitzer Prize winning columnist for the Times, essentially makes this point in his latest column "How to Fix a Flat." In it Mr. Friedman says this: "How could these companies be so bad for so long? Clearly the combination of a very un-innovative business culture, visionless management and overly generous labor contracts explains a lot of it. It led to a situation whereby General Motors could make money only by selling big, gas-guzzling S.U.V.’s and trucks. Therefore, instead of focusing on making money by innovating around fuel efficiency, productivity and design, G.M. threw way too much energy into lobbying and maneuvering to protect its gas guzzlers."

Friedman argues that any car company that gets taxpayer money must demonstrate a plan for transforming every vehicle in its fleet to a hybrid-electric engine with flex-fuel capability, so its entire fleet can also run on next generation cellulosic ethanol. His thinking is in line with others who say that in return for any direct government aid, the board and the management [of G.M.] should go along with any remaining equity of shareholders. The government should then appoint a hard-nosed and nonpolitical receiver, as the Wall Street Journal argues should happen, who would have "broad power to revamp G.M. with a viable business plan and return it to a private operation as soon as possible."

The Big Three should not continue to manufacture only cars, but should be made to share their skills, resources, workforce and technological know-how with new innovative people-transit systems like Tubular Rail Inc. (TRI) and Personal Rapid Transit (PRT). Both technologies working together could reduce gas consumption, carbon pollution and the need for cars and the expensive roads and bridges they travel on that gobble up billions of taxpayer dollars. Some of those dollars need to be directed to rolling out a new jobs-intensive program to rebuild America's transportation infrastructure.

“We hope all parties recognize there’s a pressing need to preserve the domestic auto industry and the jobs and nation’s competitiveness that’s tied to the industry,” said Greg Martin, a spokesman for General Motors, to The New York Times Friday. “We’re ready and willing to work with all members of Congress to get this assistance."

Alabama Sen. Richard Shelby, speaking in the same article about how the Big Three got to where they are today, said, “The financial straits that the Big Three find themselves in is not the product of our current economic downturn, but instead is the legacy of the uncompetitive structure of its manufacturing and labor force.” He added, "The financial situation facing the Big Three is not a national problem but their problem.”

But for such an important industry, one that could unload three million jobless workers at the nation's feet if it fails, their problem is a national problem, and the sooner government, acting on behalf of all citizens and taxpayers, retrains Detroit for a role that connects cars to mass transit and personal rapid transit in a direct way, the sooner we can start rebuilding not only our highways but our cities in a way that's sympathetic to transit and trains that are inter-modal and symbiotic.

John Boehner, an Ohio Republican congressman, said "spending billions of additional federal tax dollars with no promises to reform the root causes crippling automakers’ competitiveness around the world is neither fair to taxpayers nor sound fiscal policy.” And there in lies the rub. To reform the root cause of why Detroit is sputtering rather than humming along, thinkers like Boehner and President Bush, who believe markets are perfect if not cruel and who would spend wontonly on endless war but who pinch pennies when it comes to domestic economic issues, should understand that reform comes easiest when the enemy is already on its knees, as the Big Three say they are now.

With new innovative ideas like TRI, Which runs on electricity and can carry hundreds of people efficiently over long distances at high speeds, and PRT, a system of self-guided carts that can weave around and between dense urban structures along a continuous guideway, the facilities, talent, workforce and resources of America's car companies can be put to work for a higher cause. It happened before when WWII forced Detroit to switch, nearly overnight, from producing cars to tanks and other military vehicles. The same call to arms should be sounded now, only this time the weapon of war -- and the war now is over foreign oil -- would be American made mass transit systems that would carry passengers and freight in ways that would turn down the volume on cars and trucks as the only weapons of choice for moving people and goods from place to place.

When Detroit was flush with cash because Americans were flush with cash, such a consideration would never have been considered. Now that Detroit is fighting to keep the wheels on is the perfect time for Washington to make them a deal they can't refuse.

Disclosure: The author is the Director of Ohio Operations for TRI.

About the author

John Michael Spinelli is a former Ohio Statehouse government and political reporter and business columnist. He now serves as the OhioNews Bureau Chief for ePluribus Media Journal. Find ONB archives here.

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