Thursday, April 02, 2009

One Man's Car Shows Why Aid to the Automakers Must Include a Commitment to Fuel Efficiency

Mitchell Bard

Mitchell Bard

Posted March 31, 2009 | 10:17 PM (EST)

One Man's Car Shows Why Aid to the Automakers Must Include a Commitment to Fuel Efficiency

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When I read that President Obama was taking a hard line with General Motors and Chrysler, I immediately thought of Daniel Glass.

A professional drummer and drum historian (and, in the interest of full disclosure, a fellow resident of Scheffres Hall at Brandeis University during our sophomore year of college), Daniel lives in car-crazy Los Angeles, where having an automobile is right up there with food, water and oxygen on the list of necessities. And yet, for the last two years, Daniel has hardly set foot in a gas station, but he nevertheless manages to get around town with no difficulties. How does he do it? His 1987 Mercedes station wagon's diesel engine has been adapted to run on vegetable oil.

What is so interesting about Daniel's driving habits is how uninteresting they are. His experience as a vehicle owner and driver is much the same as yours and mine, only while we go to gas stations to fill up our tanks with fossil fuel, Daniel goes to a supplier to fill up his five-gallon jugs with environmentally friendly vegetable oil. (To those who are concerned that using vegetable oil as fuel leads to higher food prices, lower food supplies in developing countries, and pollution from processing, relax. Daniel's supplier recycles used cooking oil from area restaurants.)

And while Daniel uses a mechanic familiar with his adapted fuel tank, any repair shop that can work on a Mercedes can fix any other problem with his vehicle. What if he goes on a long trip? He simply tosses some of the vegetable oil jugs into his trunk. What if he runs out of vegetable oil when he's on the road? Easy. If he can't get to a supermarket (yes, regular old vegetable oil works fine, it's just a bit expensive), then he can use conventional diesel fuel in the same tank.

If you think Daniel is some kind of bizarre one-off, he is actually one of thousands of Los Angeles drivers making use of diesel engines that burn vegetable oil. After all, his oil supplier isn't an environmental organization or hobbyist working out of his garage. Rather, he gets his fuel from a thriving business that supplies recycled cooking oil to drivers like Daniel.

In short, Daniel's car experience is just like ours, only he doesn't contribute to the fossil fuel economy.

Opponents of fuel-efficiency standards (and, of course, proponents of fossil fuels, who like to chant, "Drill, baby! Drill!") want you to think that powering vehicles with anything other than gasoline in engines that get low gas mileage is something for a distant future, completely unrelated to any modern experience. But Daniel proves that line of criticism to be total nonsense.

What does this all have to do with the bailout of General Motors and Chrysler? Simple. With all the talk of whether or not the government has the right to demand the resignation of a company's CEO, or whether the right wing is trying to bust the unions, or whether or not the administration should let the American automobile industry die out, there was precious little discussion of how a reorganized General Motors and Chrysler will fit into a more responsible national energy policy. Supporting the automakers without insisting that they fundamentally change their approach to making vehicles, namely that they commit to making fuel-efficient cars, is more than just a missed opportunity, it's flat-out wrong. And Daniel's experience shows that adjusting to this new reality can be a lot easier than people think.

The U.S. is being severely threatened on three fronts because of its addiction to oil: the environment, the economy and national security. Without reducing CO2 emissions, global warming threatens the habitability of the planet. We all remember how skyrocketing gas prices last summer severely impacted the budgets of American families, both at the pump and in the increased price of food and other necessities. (As President Obama has said, we can't keep going "from shock to trance" when gas prices go up and down.) And our dependence on oil from the Middle East has forced us to engage in the region in ways that have not served our national interests.

So if General Motors and Chrysler want billions of dollars from the American people, the money should come with a guarantee that the new General Motors and the new Chrysler will make fuel-efficient vehicles that help the country end its dependence on foreign oil.

Some have argued that Americans won't buy fuel-efficient vehicles when gas prices are low, and that forcing the automakers into such a business plan would be dooming them to failure. Even putting aside the success of the Toyota Prius (and the anticipation for Honda's 2010 Insight, which will offer a Prius-like vehicle at a lower cost, starting at just under $20,000), the government has the power to create a market for these cars by requiring that new vehicles meet stringent emissions standards. The government already prevents Americans from having unfettered access to dangerous substances, from heroin to dynamite. Acting to ensure that new cars don't add to the dangers of oil dependence would fall comfortably into the same vein (no pun intended).

If the Obama administration was to insist on General Motors and Chrysler adopting plans that would put them at the forefront of fuel-efficiency, and then was able to convince Congress to enact strict fuel-efficiency standards, the American automakers would be set up to be leaders in the new marketplace. But if General Motors and Chrysler want to continue on as they had been, with only minor adjustments, waiting for the recession to end and oil prices to stay low so that consumers will come back and buy their gas guzzlers, the U.S. government should not be enabling that plan. If that is the only choice, the better option might be to let the industry fall.

I understand the frustration of many Americans who think the government is being tougher on the auto industry than it was on the banks. I sincerely feel for the Midwest states, especially Michigan, that have seen massive job losses related to the failing auto industry, and who would be devastated by the industry's collapse. But the bottom line is that the automakers have failed to make decisions over the last 30 years that have allowed them to stay relevant in the marketplace. And now the companies are coming to the American people for a handout. As President Obama said back in November, shortly after he was elected, assistance to the automakers has to be a "bridge loan to somewhere as opposed to a bridge loan to nowhere." And that somewhere is for the companies to be leaders of a new era of green vehicles.

By forcing General Motors and Chrysler to shift focus to a future of fuel-efficient vehicles, all of the concerns can be addressed. The automakers can be saved. They can be profitable, acting as leaders rather than followers in their industry. And a thriving industry means jobs will come back.

The answer to saving the automakers is fuel-efficiency. Think I'm being overly ambitious? Well, tell me that the next time Daniel Glass speeds by you in his vegetable-oil powered Mercedes wagon. The future is now. At least for some forward-thinking Angelenos with diesel engines that run on recycled vegetable oil. It's time for the rest of us to catch up.

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