Ailing autos may be Obama's vehicle
From Times staff writer Edward Silver:
The president-in-waiting doesn’t want to let the American auto sector fail, and not only because that would set off a shock wave in manufacturing and destroy millions of jobs. He and his advisors see the industry as a vehicle for solving America’s energy crisis and steering the economy down the path of green growth.
It’s hard to deny that much of the blame for our energy problem can be laid at Detroit’s doorstep. The carmakers have a history of resisting the kind of change that would ease our dependence on a finite fuel source, one that fortifies unfriendly petro-states and worsens global warming.
Obama clearly seeks to make that dream deferred a reality. His renewables and efficiency agenda would hit a wall if the American automobile industry was put up on blocks. Furthermore, bankruptcies could rob the nation of the chance to build export industries with markets wherever wheels are found.
The president-elect’s agenda was designed to unfold over several years, driven by a mix of policy fiat and cash incentives. Congress already has approved $25 billion to help automakers stay afloat and retool plants. Obama also backs fresh funds for fuel research and generous subsidies for consumers who switch to electric or flex-fuel vehicles.
But plans to prod the marketplace to assemble a solution are colliding with a harsh reality. General Motors, Ford Motor and Chrysler, onetime emblems of American industrial strength, are veering dangerously close to insolvency.
In GM’s case, the money may run out in a matter of months. And the car crash is happening too fast to hope for a transition that doesn’t involve rushed decisions and high costs.
Life support, not evolution, is the task at hand. So Obama has dropped his reticence about taking policy stands before taking office and urged a $50-billion transfusion into the automakers’ dwindling accounts.
On the plus side, the companies now aren’t likely to fight a reinvention program, as they had for so long. When you’re gasping for breath, resistance is futile. . . .
Perhaps the most elusive piece of Obama’s program is the energy component itself. Backers of alternatives to oil started agitating long before the Illinois senator appeared on the scene, and their ideas are still in competition. This year, with crude hitting $147 a barrel before the price plunged, many checks have been written and prototypes unveiled in the search for breakthroughs. Any true solution, of course, must be able to cost-effectively scale up to feed America's teeming fleet of cars and trucks.
Corn ethanol is widely considered a failure, in part because it literally takes food off our plates. Cellulosic ethanol, made from plant waste, faces the challenges of getting the chemistry right and harvesting and transporting the raw material.
Electrification? GM has staked much on the Volt, scheduled for introduction in 2010. If it survives its parent’s financial malady, it could bring great benefits in energy efficiency and lower emissions. But with a $40,000 price tag, the Volt may not go far. Meanwhile, a mass transition to plug-ins is waiting on better batteries and upgrades to the electric grid. That option may also require burning more coal, the bane of the environment.
T. Boone Pickens proposes running our vehicles on natural gas. That idea would detour much of the No. 2 electricity fuel away from the power market, and require the retooling of both vehicles and fueling systems. Oil is also a richer source of energy, but because natgas burns cleaner than oil and is extracted domestically, it may have an inside track in Washington.
Ready to pick, Mr. President?
What’s clear is that, just as the impact of the automakers’ collapse would radiate outward, so would the effects of their renewal.
If Obama is willing to act with audacity, his efforts may amount to experimentation in an emergency. Nevertheless, the rules of the road -- the shape of the vehicle and fuel industries -- may be set for decades as a result.
If he gets somewhere, much of the world may follow.
Photo: Then-candidate Barack Obama with leaders of the Teamsters, United Auto Workers and AFL-CIO at a Labor Day rally in Detroit. Credit: Bill Pugliano / Getty Images