Washington's Definition of Cooperation
Be careful what you wish for because reality can bite back.
2009 brought with it a series of fresh faces in Washington and the hopes that the auto industry would-finally-have a seat at the table. It was almost as if you could hear almost everyone in Detroit singing: "Hail to the chief we have chosen for the nation. Hail to the chief! We salute him one and all. Hail to the chief as we pledge cooperation." Stop right there. Have we really thought to ask ourselves what "cooperation" is going to mean for the future of the auto industry?
Two camps exist in Washington right now: one that thinks Detroit is dying and needs to be taken out back to be put out of its misery and another that thinks Detroit needs to be more "green" by building nothing but hybrids and electric cars. The scary fact is Detroit is stuck somewhere in the middle of those two camps, putting the domestic industry square in the crosshairs for both factions.
President Obama has already made a few initial moves that have raised more than a few eyebrows in the industry. The first was his announcement to direct the Environmental Protection Agency to reconsider California's request to deviate from federal clean air laws to further restrict vehicle emissions-a move which could result in a patchwork of laws that vary from state to state, requiring carmakers to build multiple vehicle emission systems for certain states. The second was his announcement that the government impose stricter fuel economy regulations by 2011.
I could almost hear the words of "Hail to the Chief" quickly fading from GM's Ren Cen, Chrysler's Headquarters, Ford's Glass House, and the UAW's Solidarity House. What happened to the President who was going to embrace both Detroit and the unions like no other in recent times? Looks like Obama has decided that he's placing his chips on "green" at the cost of manufacturing, because the survival of our planet lies in the balance.
Now is the time for Detroit to tell the White House to give it time to heal and put in place the aggressive reorganization plans outlined in February as part of the loan deal before it heaves added regulation on the backs of an already exhausted industry. Detroit can't, however, operate as though business is bad but still usual and think that U.S. taxpayers are going to be patient. They are going to want to see results.
Already, we have seen significant steps being taken by the car companies that show they are thinking "green." GM has announced plans to open a battery manufacturing plant in Michigan, along with a battery research facility. Ford has announced it will build a pure electric vehicle by 2011. Chrysler has also shown a series of electric vehicles, although they seem more interested in what's happening in Turin than on Capitol Hill. The industry is showing Washington they have a plan, but they need time to execute it. The risk is that Washington may not understand the time required and may demand unrealistic results. That's what happens when bureaucrats get involved.
Obama and his team need to be patient and not capitulate to the Chicken Little's of the world who claim the sky is falling. If they overreact and put too much pressure on the auto industry, we could see our billions of tax dollars fall into the abyss at the hands of the "green" movement. If they allow the industry time to get its act together, we're likely to see a series of exciting vehicles and technologies that will improve our climate, while putting us in the lead in keys areas of battery development. The clock is ticking.