Earlier this week the Obama administration, now the effective owner of the U.S. automobile industry, put Detroit on notice that it has 30-60 days to come up with a believable plan to “restructure” itself or it goes into bankruptcy.
This action makes it a good time to step back and ponder just where America’s industrial base is going. With $2 gasoline and some incentives, recession-wracked American consumers seem willing and able to absorb another 8 or 9 million new gasoline and diesel powered cars and trucks this year — but does this make any sense? The “restructuring” plan seems to be one of trimming overhead, shutting some factories, abrogating labor agreements, and stiffing shareholders, bondholders and debtors to the point where the manufacturers might be able to limp along with a minimal infusion of taxpayer dollars.
This plan might be fine except for one glaring fallacy. In the next few years, oil prices are going up so high that ownership and use of the automobiles and trucks in their present form will be a totally uneconomic proposition. How many of the current flavor of cars and trucks is Detroit going to sell with gasoline at $10 a gallon or higher?
The U.S. already has some 250 million 2-axle motor vehicles (cars, light trucks, vans) running around and sitting in traffic jams (and only 200 million licensed drivers). With some tender care and adequate spare parts, this inventory easily could be useful for another 20 or 30 years considering how much less they are going to be driven once gas prices go up. Even the most optimistic do not see how there will be much oil around for powering private cars 25 years from now.
When one considers that we already have in operation more than enough cars and trucks with low mileage internal combustion engines to last us through the rest of the oil age, the only logical thing to do is to stop making more. That’s right — stop building and selling anything that consumes liquid fuels at anywhere near the rate consumed by our current fleet of vehicles.
We stopped making cars once before (1942) when, as a nation, we decided that military production was a higher priority. It is time to do the same again, for the economic crisis we face will be fully equal or worse than the challenges of the Second World War. If we are going to replace enough of those gas-guzzling internal combustion vehicles before they have to be scrapped for lack of affordable fuel, then the sooner we stop the better.
We all know it is politically difficult to shut down the U.S. automobile industry in the midst of a deep recession, so the problem becomes one of finding something for the automobile industry to do that does more good than harm. Wasting shrinking national resources and taxpayer dollars cranking out another 10 or 20 million gas-guzzlers during the last few years of cheap oil can only be classified as major harm.
Since Washington seems to be telling Detroit what to do these days, let’s get them going in the right direction. The first step would be to rapidly phase out the production of large, heavy, internal combustion power vehicles. Halting the manufacture and sale of 2-axle vehicles that do not get over 30 miles per gallon is a good start. If somebody really needs something bigger and less efficient, then there are and will be millions for sale on the used market.
Current fuel standards are a political compromise and absurdly too low for the era. We should be building vehicles that get not less than 100 mpg as soon as possible. Absurd no – such cars have already been built and with crash programs and licensing of existing technologies could be in large scale production in a few years. The next generation of cars will be much smaller, much lighter and likely be at least partially powered by electricity from the grid.
One way to jump start a far more efficient industry is for all levels of government, and its contractors to start purchasing very large numbers of far more efficient vehicles immediately. This alone should be enough to keep the U.S. automobile industry functioning until gas prices go so high that the public will be buying only ultra-high mileage vehicles. If our governments and their contractors can eliminate gasoline and diesel powered vehicles from their light vehicle fleets then we have taken a big step towards the post-oil era.
Ten years ago governments in the U.S. had a program of buying natural gas powered cars to help clean up the air. Now natural gas powered vehicles, of course, are not sustainable in the long run, but for the time being we have plenty of natural gas and it has an advantage of not necessarily having to be imported. A massive conversion to natural gas powered cars and trucks for government use if nothing else could give the U.S. automobile industry something useful to do; help clean up the air; and extend the useful life of our 250 million vehicles. While such a program would obviously take a lot more refueling stations, these are something that Detroit could build and the government could usefully subsidize.
Another useful job for the American automobile industry, while gearing up to build 100 mpg cars or all electric cars, is to start converting the existing fleet to get much higher mileage. Perhaps recent vintage internal combustion cars and trucks could be repowered or have auxiliary electric motors and batteries installed that could be useful for short gasoline-less trips. It seems better than scrapping them by the millions when gasoline becomes unaffordable.
It is time for Detroit to get on with building electric trucks to deliver stuff and maintain our infrastructure. Again government should either buy for itself or mandate the use of such vehicles until the rest of us catch on.
The current crisis in the automobile industry is the opportunity of a lifetime to revamp one of America’s most important industries for the 21st Century in a sensible manner. The only alternative is to watch it self destruct and suffer the consequences.