Another month, another set of bummer car sales figures from the Big Three. Well, bummers for Ford
In such a climate, it's tough to imagine how even the new cost-cutting steps announced by GM, and Ford today, can turn things around for good. So naturally, the thoughts of the punditing class turn increasingly toward the outside fix -- the old Hand of God treatment.
To look at only one recent example, a column by David Ignatius in The Washington Post takes the not-unheard-of position that the government should do something to fix this problem. What it should do, in his opinion, involves a complex scheme of government incentives and disincentives to persuade carmakers to use advanced, lightweight composites and other materials to lower vehicle weight and increase fuel efficiency. This scheme was originally proposed last year by physicist and environmentalist Amory Lovins.
Now, in my opinion, some of this carbon fiber stuff isn't practical at the present time. (My guess is that Ignatius never worked with this stuff. Hey, I have, for some of my funky home-built bikes -- which get me to work on coffee and adrenaline alone, thank you). Although it is wicked cool technology, it certainly isn't cheap or easy, nor are the raw materials in great supply like the metals and plastics currently in use. Since these composites have been around for decades, my guess is that they're not in more widespread use for a simple reason: It's simply not cost-effective. Anyone who's shelled out five or 10 thousand clams for a top-of-the-line carbon-fiber bike could tell you that.
But to get back to the big picture, the fact of the matter is that we already have incentive and disincentive systems that can fix these problems. For fuel efficiency, there's a little something called the price of gas. Unfortunately, the minute it begins to work, many of our nation's millions of leave-me-alone-dangit individualists change their tune to "Please, Uncle Sam, make it stop!"
For designing and manufacturing the transportation products and systems of the future, we have capital markets and investors, whose own self-interest encourages them to move their money to the right, economically viable enterprises. Unless, again, we use government to keep propping up the failures. Airlines, anyone?
If GM and Ford are losing the game against the likes of Toyota and Honda
It's simple-minded jingoism to suggest that American consumers are naively throwing their money over the horizon by "buying another Toyota and thinking, 'what the heck,'" because an awful lot of those Toyotas are made in the U.S., by Americans -- more than 30,000 of them. Moreover, the profits at Toyota don't simply disappear into some black hole, never to be seen by Americans again. In fact, they can be enjoyed by American investors who are free to buy the stock on our own exchanges.
We all agree on some things. None of this is pretty, and creative thinking is called for. But it needs to come from the auto industry, operating in the sink-or-swim capital markets, and not from politically motivated politicians and bureaucrats.
For related Foolishness:
- See Yahoo! and Tommy pimp GM's ride.
- Take a look at GM's $400 million oops.
- Gas too expensive? Keep your eyes on the wise.
Fools, now is the time to open your hearts and wallets to worthy causes! Please support our five Foolish charities at www.foolanthropy.com.
Seth Jayson digs the carbon fiber but is pretty sure he'll only be seeing it on bikes, race cars, and military vehicles -- the kinds of movers for which money is no object. At the time of publication, he had no positions in any company mentioned. View his stock holdings and Fool profile here. Fool rules are here.