November 24, 2008
With the imminent decline and possible bankruptcy of the Big 3 (GM, Ford and Chrysler), is it possible for American car companies to successfully transition to green fleets while simultaneously combating a disastrous financial crisis. In the last few weeks we have seen the Big 3 testify in front of Congress in an effort to beg for loans to increase liquidity in the industry. Is this bailout merely an extension to the finite lives of these dying companies, or will they genuinely revive the corporations that built the manufacturing industry in America.
First of all I don't think a bailout will work in reviving the corporations, nor do I think $25 billion+ in tax payer money is warranted by companies who have disregarded the movement towards greener cars by maintaining their truck-based fleets. Now while, GM and Chrysler Executives were begging for cash in front of Congress, Bill Ford Jr., met and discussed the future of the automotive and energy industry with President-elect Obama (Ford Eyes Green Agenda - New York Times). This is a smart move on the part of Mr. Ford, but hopefully Obama will not be swayed and not simply bail out these outdated, poorly run companies.
Big 3 Testifying in front of Congress:
We can't expect that giving money to these companies will change the low demand for the US vehicles. Since they have been slow at building efficient vehicles they should not be given the benefit of the doubt. Although I don't agree with the bailout, I do agree with Mr. Ford in that the US has to build a new infrastructure to support green cars, and also transition to domestic energy supplies, whether it be domestic natural gas, solar, geothermal, wind or a combination of these energies.
The financial struggles experienced by the automotive industries exposes a much deeper and structural problem in our economy. Our dependence on foreign supplies, energy and finance (thanks to free trade) has made the US vulnerable to these fluctuations in the economy. Now rather than giving up on capitalism and free market ideals, we should educate our workforce and adapt to a more flexible economy. By supporting a flexible and educated workforce we will mitigate the effects of the current and future financial (and automotive) crisis.
Will the Big 3 ever become green??
Posted by curag at November 24, 2008 01:20 PM