Plan C Bailout Strategy - Dealing with Cars

by: Heather on 12/09/2008

This just in from Pat Murphy, author of Plan C: Community Survival Strategies for Peak Oil and Climate Change. Thanks Pat!

Plan C Bailout Strategy - Dealing with Cars

As we move toward government socialism for major corporations and industries, new opportunities arise, as these corporations seem to be at a loss for any innovative ideas. This is not surprising since they have screwed up so badly in recent years and the same people are still in charge. For some time, corporations have held immense power to set the priorities for nations with politicians supporting their efforts since corporations provide campaign financing. Now the shoe is on the other foot. Car and finance CEOs are coming to Washington, hat in hand, begging for bailouts. The elected representatives of the people suddenly have the right to govern - for a while. And this gives them a chance to generate some new perspectives and innovative solutions.

One can see this in the so-called bailout for the American car companies. Detroit is asking for tens of billions of dollars to make the transition to more fuel-efficient cars, along the lines of the Energy Independence and Security Act of 2007 passed in December of that year. The new CAFÉ standards require that automakers increase fleet wide gas mileage to 35 mpg by 2020, including "light trucks" (SUVs). This is well below current existing standards in the rest of the world. With these companies implying they may not be around in six months, it seems silly to be talking about providing government money for such relatively minor goals 12 years from now.

It takes time to develop engineering teams to make good quality small cars. If Honda and Toyota would stop development for five years, then maybe Detroit would be able to catch up. U.S. companies will make a few bad models and learn from them, the way most things are done. But what is the point? In terms of fuel-efficient vehicles, the rest of the world is far ahead of the US and the thought that we can easily catch up is arguable - we haven't so far. This is true for regular cars, diesel vehicles, hybrid cars and even the long delayed fuel cell car. General Motors is advertising its Volt electric car while acknowledging that there are no batteries available yet to make it feasible. Batteries for cars are still the province of the Japanese, particularly Panasonic, which will provide the batteries for a PHEV that Toyota has announced will ship in 2010. It's hard to visualize GM begging the government for money to build a technology that can beat Toyota. (Recall that GM made a decision in the past to forego EV and hybrid cars for the doomed fuel cell car.) Toyota is also adding more energy efficient vehicles beyond its highly successful Prius, including a natural gas Camry hybrid. It is also resurrecting four RAV4-EV models to be used in Portland Oregon. In addition to the PHEV, Toyota will also market an all-electric commuter car in the early 2010s.

Detroit senior executives do not inspire much confidence as innovative leaders. Rick Wagoner, CEO of General Motors, in an interview with Motor Trend magazine in 2006, said his most regretted decision was axing the EV1 electric-car program and not putting the right resources into hybrids. Ford's CEO Alan Mulally was a Boeing executive for 40 years before switching to cars just a little over two years ago. During his tenure Ford's stock price has declined 75%. Robert Nardelli, after a long career at GE and a 6 year stint at Home Depot, took over the presidency of Cerberus (who bought Chrysler in August 2007). His experience in retail at Home Depot may or may not have prepared him to be head of an automobile company. It seems strange that the American automobile industry has been unable to develop sufficient leadership depth to deal with the challenges. The nation needs fuel-efficient cars but we don't need engineering departments and managers who are not able to build them. It just may not be possible psychologically for American car companies to make the shift away from the SUV.

One solution is to buy the designs or manufacturing rights from Honda and Toyota and begin manufacturing high quality Japanese cars in volume in this country with American workers. As a happy owner of one of the first hybrid cars made in this county, the Honda Insight (with a Prius as a second car), it's clear to me that very reliable high-mileage designs have been available for about a decade. This would keep the vast majority of the American manufacturers' work force employed along with dealers and other service organizations. U.S. engineers can then take some time to study these cars, make a few errors - and then develop the next generation of vehicles. Simply put, let's invest a few billion dollars into manufacturing already well-designed cars here. Japan will probably be delighted to provide the designs for a fee - especially since their horded dollars will be worthless if America as a nation goes out of business.

We are in an emergency situation now and car companies should be required to operate as if this is the case. One way to hunker down is to stop building new models every year. A lesson we might adopt from the airplane industry is that there is no more need for model years. When a new airplane design becomes available every five years or so, the aerospace companies then build it. Even today, Detroit does not design and build a new engine or new transmission each year for every model. Most of a new "model" consists of cosmetic body changes - unnecessary except for styling. If we replace 20-mpg SUVs with 45-mpg Toyota Priuses and Honda Insights we will use far less material and labor. We will therefore need fewer production plants. Twice the number of cars would come out of the factories using half the workers and selling at half the price of the big behemoths we would stop making.

What would we do then with the excess capacity of workers and production plants? I suggest they should begin building buses. (GM used to build buses but sold that business a long time ago). Better mileage cars are not a complete answer to our long-range energy problem in spite of the hope for PHEVs (a.k.a. the coal car). Mass transit is needed and that can be provided most rapidly by buses. Currently U.S. cars and light trucks (SUVs) use 60% of transportation fuel - buses use less than 1% (.7%). Medium and heavy trucks use 18.7% of the fuel. There are 222 million cars and light trucks (SUVs) and only 83,000 buses in the U.S. (Transportation Energy Data Book 2008. Table 2-6 and Table 2.12.). One Greyhound bus takes an average of 34 cars off the road, and achieves 184 passenger miles per gallon of fuel.

How quickly could we do this? GM began building the CCKW, the first version of the so called "deuce and a half" military truck in 1941. The company produced 43,000 CCKWs in 1941, and ramped up to 111,000 in 1942 and 131,000 in 1943. Could all the extra capacity plants in the U.S. deliver 100,000 buses per year after ramping up? Does this mean we could take 3.4 million SUVs off the road each year? Now that's progress!

We can also lower the speed limit immediately. On October 28, 1942, a War Speed Limit of 35 mph was set. In the first energy crisis of the 1970s the nation adopted a 55 mph speed limit which had the added benefits of significantly reducing deaths from automobile accidents. The fact that we have not already slowed down in response to the current crisis is a reflection of our "fast is best" cultural outlook since that time. We refuse to give up speed - even though doing so would benefit our children enormously. But we will learn.

These approaches may all seem rather prosaic. Energy-aware commentators periodically call for something more dramatic - like a new Manhattan Project to save the nation. But isn't it more than a bit ironic to hear a call for us to repeat something that represents the worst in human beings - the development of atomic weapons (which we might recall are still set to be fired when the computers decide conditions are right). We might also recall that WWII was essentially over when the bombs were dropped to show their scientific feasibility and I guess to punish the Japanese. The war was really won with CCKW trucks, airplanes, victory gardens and other social mechanisms that required effort and sacrifice from a willing citizenry. Throwing a few billion dollars to the National Labs and asking them to repeat the military innovations of the 1940s would deprive the mass of today's citizens of the chance to contribute their own efforts and show their willingness to bear some responsibility for our common future.

Some Peak Oil proponents such as Matt Simmons and James Kunstler have called for a rebuilding of the national railroad network. This would take decades - if it is even possible. I am sure they will think of buses as unimaginative. Light rail and bullet trains have all the excitement of high technology. Thoughts of racing between Paris and London on the Eurostar evoke the thrills of speed and cultural exploration. But an extensive investment in buses would not require that we build any new parallel transport rail-based network (presumably running alongside our existing roads). The magnitude of the effort to re-build a national rail system has not yet even been described. People seem to think there are some rusty tracks just waiting to be dusted off, which is not the case.

The number of railroad line miles and track miles has been decreasing steadily and dramatically since the 1930s, while car traffic has increased enormously. By 1920, car vehicles traveled approximately 45 billion miles on roads annually. Vehicle miles of travel increased more than 66-fold during the intervening 85 years to approximately three trillion vehicle miles in 2004. Road mileage also grew during those 85 years to 3.99 million miles in 2004. If mileage driven has expanded 66 times since 1920 and there are about four million miles of roads, how would we size a rail effort? If we had continued to build railroads from 1929 on, rather than moving to roads, how many miles would we have built? Would it have grown by a factor of 10 to 20 million miles? Since we increased miles traveled by 66 times, maybe a factor of 10 is too low. But in any case, laying a new network of tracks on top of the now-existing road system will result in a huge number of crossings. At present there are about 2.4 crossings per railroad line mile. Will we need 20 million new crossings? How many of them will be hugely expensive viaduct projects (bridges over rail tracks)?

There seems to be a horrible fear in the American psyche of any change that can be experienced as "going backwards," a fear of what it will mean to reject the "progress" we have made by developing Hummers, jet airplanes, nitrogen fertilizers, McMansions, credit cards, credit swaps and derivatives. The thought of going back down the ladder of so-called progress from cars to buses to bikes to walking fills us with despair. So we cling to faith in innovations - such as light rail, pluggable hybrids and government bailouts - that are already best understood as fading dreams, misguided steps toward an increasingly barren future. More optimistic people, people who never really thought that all this stuff was the core of life, have a different view. They see the coming change as an opportunity for creativity. Why not just bail out Detroit with a government bus program? Maybe growing food in the backyard with neighbors could be a source of joy. Wearing sweaters doesn't seem all that great a sacrifice. Buses might be a way to meet interesting people. Could dealing with climate change, Peak Oil and bad debts actually be fun?

Curitiba, Brazil has implemented a Bus Rapid Transit (BRT) system. The buses run frequently and reliably, and the stations are convenient, well-designed, comfortable and attractive. Curitiba has one of the most heavily used, yet low-cost, transit systems in the world. The above ground system offers many of the features of a subway system. Vehicle movements are unimpeded by traffic signals and congestion. Fare collection is done prior to boarding. Quick passenger loading and unloading is featured and the systems are above ground and visible. It would be easy to implement such a system in an American city that has had some bus transit experience and this kind of system can eliminate a lot of the problems with American road mass transit. It's interesting to see the rest of the world dealing with the energy/CO2 problems of today using existing systems. Maybe we should try it!

For more from The Community Solution check out Pat Murphy's Plan C: Community Survival Strategies for Peak Oil and Climate Change and also The Power of Community: How Cuba Survived Peak Oil.

Plan C     The Power of Community

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