Choosing Between Saving the Auto Industry and Saving the Planet

A BUZZFLASH NEWS ANALYSIS
by Meg White

There's something at the center of the car industry debate that is simply not being addressed, perhaps even actively ignored. The elephant in the room is the fact that, regardless of the need to maintain one of the few industries that actually makes something in this country, the heyday of the auto is passed. The low-occupancy vehicle is not a sustainable product, no matter how many miles to the gallon it gets.

President Obama's plan to save the auto industry is in direct opposition to his quest to save the planet. One has to imagine conversations between Environmental Protection Agency head Lisa Jackson and auto bailout advisor Steven Rattner are awkward. Which is why tomorrow, when -- as Politico is reporting -- Obama will announce "historic" changes in fuel economy, or CAFE, standards, the conversation should be a wide-ranging one.

Many contend that the car industry shouldn't get a bailout unless they update their models to deal with the new pressures coming from increased gas prices and changes in environmental policy. But simply manufacturing a bunch of fuel-efficient vehicles will not fix the auto industry's many problems. Regardless of changes to their models and standards, people will be buying fewer cars in the future.

Even if we got cars down to zero emissions, the benefits of going car-less expand beyond the environment to societal and personal health. Road rage and diabetes are not brought on by exhaust, after all. Furthermore, the space taken up by ever-expanding freeways will change very little in accordance with the gas-guzzling properties of our vehicles. Robert Kyriakides, CEO of a solar panel company in the UK, opposed bailing out the auto industry in England not only because he deems them "undeserving," but also because it's an "unsustainable" fix.

The changes consumers and governments are demanding from the car companies will undoubtedly raise costs as well. General Motors Europe President Carl Peter-Forster said in a recent speech that part of the difficulty of coming back from the brink of economic collapse is that they are moving toward the production of smaller and more fuel-efficient cars, which are inherently less profitable. But Ford seems to be confident that they can expand upon the features offered on smaller cars to bring the price up to an amount that will cover expenses.

As cars get more expensive due to higher fuel efficiency standards and other wholesale changes in the auto industry, some drivers will swear off the lifestyle of car ownership entirely, regardless of the environmental sustainability of newer models.

So how do we square these two diametrically opposed causes in American society? Maybe the best person to foster communication between Rattner and Jackson would be our coalition-building centrist of a transportation secretary, Ray LaHood. He may be the best man to enlist the car industry in deconstructing itself by allowing private innovations and manufacturing to aid the development of public transportation. Business professor David Bruce Allen suggested that we not bailout each leg of the Big Three, but force Chrysler to reemerge as an innovator in clean energy, including the advancement of public transportation.

Diversification of products comes in at number eight in this article about 25 ideas of how to save the car industry (emphasis mine):

Car-free living is Detroit's worst nightmare, but it also may be its greatest opportunity to reinvent itself. "The auto industry could reframe itself as a transportation industry," says Katie Alvord, author of Divorce Your Car, "in the same way some of the oil companies have started talking about themselves as energy companies." What other products could the car companies make? "It's imperative that we restore passenger rail service, and we will need someone to build the equipment," says James Howard Kunstler, author of The Long Emergency. But our favorite vision of the future has to be Sharon Roerty's: "Imagine a young professional driving her GM car from her suburban home to a well-maintained train station, taking her GM collapsible bike from the trunk, boarding the GM train to the city, unfolding the bike in 15 seconds, and riding to work," says the director of the National Center for Bicycling and Walking. "Now is the time."

Currently there are still a lot of drivers who think of themselves as in the "must own" category: soccer moms, the elderly, a certain segment of disabled population, and rural or exurban dwellers. But as communities adjust their structure to appeal more to the car-less, fewer and fewer people will be in that category. Take for example the nearly car-less suburb of Vauban, Germany profiled recently in The New York Times.

The expense of maintaining a car goes beyond gas prices to parking and repairs. People who already pay for public transportation may prefer to join a car-sharing service instead, such as Zipcar. Here in Chicago, the I-GO program teams up with the public transit agency to provide cars for rent for an hourly fee that doesn't charge extra for gas or maintenance. Perhaps such programs could function as a model for the future of the auto industry.

While the cost of oil isn't nearly as high as it was last year, gas prices shot up 25 cents in the last two weeks. As the economy recovers, prices will continue to go up, and likely surpass the highs of 2008. Those who could cut back on driving during that time period did so, and there's no reason that won't happen again in the near future. Furthermore, there are people out there who got rid of their cars due to financial necessity over the last year or so and may not find the need to go back to driving just because they can afford to.

Granted, there will always be certain people who will never give up their cars, and the trucking industry will likely maintain itself for quite some time. But regardless of how lean the auto industry emerges from the economic crisis, the industry will never again be the powerhouse it once was. Most of the lost jobs won't be coming back if the Big Three remain solely in the car manufacturing business.

The real danger is the widely held assumption that because everyone is holding off on buying new cars now that there's going to be a tremendous under-served market for American cars as soon as we make it out of this recession, and that's not necessarily so. Even if it were, the market would experience only a temporary boom.

While I don't blame United Auto Workers or the Big Three bigwigs for bathing in the optimistic salve that helps maintain the above belief, I sure hope Jackson, Rattner, and LaHood are considering alternatives. Because while saving American industry doesn't mean we should throw sustainability under the bus, it may matter who makes that bus and what kind of fuel it runs on.

A BUZZFLASH NEWS ANALYSIS