Monday, March 30, 2009

Yes, Detroit Can Make a Green Turnaround

(The following is an Op Ed I wrote that was published in The Detroit Free Press on November 20, 2008)
Let's face it. No one believes us. That's the crux of the problem in fashioning a bailout for the three Detroit automakers.

Let's face another reality: Why should they? Resistance to change has long been part of the culture of the domestic auto industry. When President-elect Barack Obama came to the Detroit Economic Club and said we need to do better, he was pilloried almost universally by the media and establishment types.

Many of those folks would rather spend enormous sums lobbying against CAFE standards than use that money to get the job done. Now we are on the brink of collapse, and the American public is not feeling our "fierce urgency of now."
We need to rebuild the trust of the American people and capture their imagination.

Here's one way to do that:

Forge a complete "green turnaround" restructuring plan for the auto industry that is built into an economic aid package sufficient to get the job done: a Detroit Compact of sorts. This would not be just another unpopular bailout, but an energy, environmental and economic program all rolled into one.

It sounds enormous, but all change on this scale is. We can break it down into steps.

• Convene three working groups: technology, industry and financial.
The technology group -- including the best and brightest, not just from here in Detroit, but across the country -- would determine the best technology mix (EVs? fuel cells? plug-in hybrids?) for the immediate, near-term and long-term future, as well as the obstacles that need to be overcome to make it happen. For example, battery swapping at gas stations may be an intermediate option until a long-mileage battery is developed.

The industry group -- the American-based automakers and the UAW -- would make an honest assessment of assets and liabilities (pension, health care, etc.), and current finances, including cash flow based on current sales, then determine whether a consolidation or strategic partnerships make sense. This would be based on factors such as the most promising technologies in development, time to market and economies of scale.

The financial people -- private and government economists -- would determine the needed mix of public financing, tax incentives and outside private capital for the reinvented auto industry, and how the funds would be allocated. Most urgently, this group would determine how best to provide the bridge financing while the Detroit Compact is put in place.

• Integrate the work products.
What technology mix, alliance mix and financing options, if any, will best help achieve the goals of ensuring the industry's survival, avoiding bankruptcies and the resulting economic shock, and producing the most fuel-efficient vehicles possible as quickly as possible, with an escalation plan to make even more advanced vehicles in second- and third-generation cycles?

• Build public and congressional support for the agreed-upon plan. The audience is the American public and Congress.
Our new president has said it clearly and consistently: Yes we can. And Detroit can, too. We can take a great American industry, one that created the American middle class, and reinvent it to produce the most advanced vehicles in the world. This will reduce our energy and financial dependence on other nations, rescue our climate, and reinvigorate our economy when we need it most.

The American people and our leaders in Washington need to hear Detroit say it loudly, and at long last: Yes, we can.

Go to to read more about my proposal and to sign my petition to Congress. Change starts from the ground up and we all need to work together to make this happen!

1 comment:

nedclark said...

I appreciate your `can-do' spirit, Nancy, but you are naive when you dismiss that Detroit isn't obstructing new technology necessary to save themselves: companies do NOT understand the future when they are too fixated on how they've operated in the past.

For at least 100 years, established businesses have ignored new products because they challenged their existing investments; the telegraph companies rejected overtures by telephone developers, since spoken-word communication would threaten their existing printed-work product (they didn't appreciate this would be the next step in "communication"); the Wright Bros. were turned down by railroad interests for investing in air transport, because it "competed with" their ground transport biz (not understanding its all transportation). In the `70s, an American TV company research lab developed the flat-panel TV - but tube-TV interests in the co. killed funding because they saw it as `competition' - and the development transferred to Asia - which proceeded to put U.S. tube TV companies out of business.

So no - companies do NOT understand how to adapt to the future when they are too fixated on how they've operated in the past.