08 March 2009

How to Save General Motors

In general, I say let GM tank. They have not kept current. A bail out to keep doing business as usual? I don't think so.

But let's look at GM's assets.
-It has huge manufacturing infrastructure - buildings, machines, networks of providers. There is a huge capital investment in this company.
-It has a tremendous intellectual capital. It has decades of experienced designers, managers, and manufacturing personnel. As a designer, my heart aches when I think about the loss of this capital. People with skill and imagination sidelined by regressive upper management.

What to do?
In WWII, these industries went to work building trucks and tanks and fighters and bombers. What do we need now?
-Massive quantities of wind turbines, tide turbines, hydro power and other ways of harnessing the kinetic energy of the earth to produce "clean cheap electrons." GM needs to put its core strength of manufacturing complex large machines to work solving the climate crisis.
-Toyota is building manufactured housing. This concept is accepted in Japan, and there is a great deal of innovation. Buckminster Fuller had this concept with his Dymaxion House. The contemporary manufactured house need have no resemblance to the double wide or the trailer home. Americans have an unimaginative prejudice against the concept. The manufactured housing made by GM should be highly efficient and completely green.

GM has the seeds of its resurrection, it has probably thought of them and discounted them years ago. It has relentlessly followed a narrow focus, rather than being the leader and innovator that it was at its founding. If it cannot change its course and innovate its way towards solvency without a massive taxpayer bailout, then let it die.

3 comments:

Luke said...

I agree, but the whole thing is terribly complicated.

Anonymous said...

Can you tell us who you are quoting with "clean cheap electrons."

Caleb said...

Clean, cheap electrons comes from Thomas Friedman in "Hot, Flat and Crowded."

Yes it is terribly complicated, but does it need to be? Take the new energy bill at some 1100 pages. That's because of the cap and trade and the picking of winners. Better to establish a tax on carbon, and charge the tax to the end user based on the production of CO2. The bill could be one paragraph, with additional pages detailing the fuel source and carbon emissions per unit of measure. The tax could be phased in over say five years. This would provide a price floor for fossil fuels. Then investors in alternative energy would be able to make their own decisions, even those who support nuclear power would have an edge. Forget subsidies - those pick the winners. Certainly do not subsidize nuclear power, which would not be viable without subsidy or things like insurance exemptions. But also don't subsidize solar or wind. Let a true market determine the alternatives, but based on making fossil fuels less and less attractive. However, if we do want to pick winners, subsidize GM to build wind turbines rather than what we are currently doing which is to give coal a huge break.