General Motors, the world’s largest car manufacturer from 1931 to 2008, filed for bankruptcy today. In consequence of its receiving more than $20 billion US in federal aid, 60% of the company will now be owned by the US Treasury. It is truly the end of an era. As Michael Moore writes, “It is with sad irony that the company which invented “planned obsolescence” — the decision to build cars that would fall apart after a few years so that the customer would then have to buy a new one — has now made itself obsolete.”
While most seem to credit GM’s lack of innovation during the 1980s as the beginning of the end, the company’s stubborn commitment to gas guzzlers was probably the culprit. Soon after gas prices reached new highs in 2007, GM was “surprised by auto buyers’ dramatic shift toward the smaller, more fuel-efficient cars and away from the pickups and sport utility vehicles that had served as its mainstay,” to quote the NY Times article cited above. Yet GM had a chance to develop cleaner-burning cars over a decade ago. Chris Paine, the writer and director of Who Killed the Electric Car? (2006) documented the creation, limited commercialization, and subsequent destruction of the battery electric car in the US, in particular the GM EV1 in the 1990s. The film is particularly vicious in its portrayal of the bizarre plot by GM to convince California, the only state that had passed zero emissions regulations, that there was no demand for their product. The company’s subsequent decision to take back every single Ev1 and destroy it, as the cars were available only by lease, seems suicidal in hindsight. Just a couple of weeks ago, Katherine Mieszkowski reported on electric cars for Salon.com (“Electric cars are coming!”), saying, “We’re sorry to be buzz kills. But we’ve heard this one before. Like in 1990. And 1910. Do the automakers have the juice this time?”
Trying desperately to save its skin after two years of sharp declines in sales by the fall of 2008, GM asked for federal funding to make the switch to more efficient cars. Too little, too late. Just a few weeks ago, GM announced it would close over 2600 of its dealerships in the US, 40% of the total. In order to survive, US taxpayers would have to invest an additional $30 billion in the company; this leaves the government as “reluctant shareholders” in this little drama. Moore understandably shies away from propping the company up with taxpayer dollars: “The only way to save GM is to kill GM.”
While most are sensible of the tens of thousands of jobs lost, the fall of GM (and Chrysler a month ago) has raised hopes for alternative transportation supporters, many of whom were enraged by the US government bailouts of the Big Three Automakers in November, one of George W. Bush’s last actions in office. Moore writes, “we must immediately convert our auto factories to factories that build mass transit vehicles and alternative energy devices.” He envisions a future similar to AASHTO’s recommended plan, with high-speed rail and local LRT connecting US cities, noting that the demise of the car giant was predictable…twenty years ago, in fact. In Roger & Me (1989) Moore chronicled the negative economic impacts of GM plant closures on his hometown of Flint, Michigan, the birthplace of GM. His exposure of GM CEO Roger Smith’s actions was an early look at corporate downsizing and outsourcing to other countries (in this case, Mexico), which proved to be prescient. Smart Growth, transit-oriented development, and complete communities advocates have always said that more efficient cars are only part of the solution, which includes changing travel behaviour: increased walking, cycling, and public transit use. The American Association of State Highway and Transportation Officials (AASHTO) has released a new report calling for a national rail policy in the US covering both passenger and freight rail and the creation of an intercity passenger rail account, funded at $35 billion over six years. The Federal Government plans to distribute $8 billion in economic recovery grant funds for intercity passenger rail, and AASHTO Board of Directors wasted no time in presenting its policy recommendations, which include high-speed rail corridors, regional corridors, and long-distance rail service. Even developers are excited, as they see prime sites opening up with the closure of GM and Chrysler dealerships.
In addition to the federal economic recovery grant, the US may well see their first national regulation on greenhouse gases. If the proposed regulation passes, cars would have to be 40% more fuel efficient than they are now. As Mieszkowski reports, Ford recently declared it would spend hundreds of millions of dollars to convert an SUV plant near Detroit to churn out the Ford Focus. By 2011, the plant would be producing battery-electric versions of the diminutive car. Nissan recently claimed that 10 percent of its new cars will be electric by 2016. Mitsubishi plans to unleash its i-MiEV in Japan this year and bring it to the U.S. in 2012. Toyota, which has dominated the hybrid market with its Prius, plans to launch an electric Prius by 2012. And Chevrolet has launched the Volt, which promises to go 40 miles on its electric battery before switching to gas. The Mini Cooper’s Mini E has been released to 450 test drivers in three states. Mieskowski’s sources tell her that the only reason car companies are going electric is to get at those federal subsidies; at any rate, companies will be forced to kill off their gas-guzzling models and improve fuel efficiency on all their combustion engines while supporting electric technology.
All told, the death of GM is probably the best thing for America. Let’s watch those VMT plummet while walking, cycling, and transit become as attractive as they once were before the onset of the Oil and Gas Era. And hopefully, let’s see the thousands of newly-unemployed auto workers and retailers back at work in alternative transportation production and infrastructure development.
