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Wednesday, November 19, 2008 12:00 AM

A California earthquake shocks Detroit

More bad news for automakers? California's Henry Waxman wins a preliminary vote to unseat Michigan's John Dingell as chair of the House Energy and Commerce Committee.

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Thursday, November 20, 2008 12:39 PM

PROMISES MADE - PROMISES BROKEN

It's hard to feel sorry for a corporation like GM. The outfit has a history of ignoring even it's own marketing information, like back in 1970's when consumers, concerned about gas rationing and their big ass cars, wanted smaller, more economical ones and were willing to buy those cheap, problematic Japanese ones while Detroit cranked out big gas guzzlers and hit the wall.

Sure, Lee Ioacca at Chrysler, asked for a bailout in the late 70's/early 80's, and there was plenty of skepticism then too. He got one and paid the loan back early. But GM's management is not Lee Ioacco.

In the 1990's GM made a commitment, in exchange for certain tax breaks and watered-down fuel efficiency standards, to research, develop, and bring to market a gas-free vehicle. Where is it? Oh yeah. It's on the drawing board top shelf.

And the UAW wasn't much better in all this the last 20 years either. Hell bent on just sharing the wealth with their corporate greedies, the union could have held management's feet to fire on those alternative fuel vehicles if they had wanted to.They could have testified before Congress and bitched that the company wasn't doing what they - and the Union, indirectly - agreed to do.

After all, it was only the future of their own jobs on the line when GM casually ignored their commitment to the consumers and taxpayers. But all the UWA wanted was another management concession that included "ass wiping in our old age" as part of their benefits package, and maybe another two weeks off a year with full pay to sit on their asses and do nothing. Good work if you can get it.

It was fun while it lasted, wasn't it? I am mindful how the UAW and other unions helped to create the great middle class of this country, fought for the 40 hour work week, medical benefits, and other things that have greatly improved this country's standard of living. But somewhere along the line, it became about RV's, vacations to Florida, gun rights, motorcycles, and voting for Ronald Reagan and other Republicans who detested unions - the very thing giving them their comfortable lives.

Nope. Hard to feel sorry for them. And even harder yet to give them billions of tax dollars that will only prolong the inevitable and won't make a dent in their ability to be globally competitive.

The lesson here is not who is at fault; the unions or management. There's enough on both of their plates to go around. The lessons to be learned here are bad management and even worse decisions

Thursday, November 20, 2008 12:22 PM

CAP AND TRADE?

Why should anyone be trading emissions? "Oh here's some of my pollution for some of your credits." Yeah, that makes sense.

Obama is pissing up a rope if he thinks this "smoke and mirrors" approach to cleaning up the environment is going to work. Then again, he was pretty much all about "smoke and mirrors" himself, wasn't he? And just because he won by default (who really wanted McCain after the economy went in the toilet?), doesn't make his policies any more realistic.

Thursday, November 20, 2008 11:06 AM

There's no way Dingell would have changed the status quo.

His biggest supporter isn't the automobile industry, but rather the electric utilities industry, who own a lot of coal-fired power plants in the U.S.

The thing to keep in mind about fossil fuel economics is that there is vertical as well as horizontal integration. In the case of coal, you have coal mines, railroads, coal-fired power plant operators, electricity traders, and, finally, utilities that service residential and industrial locations.

The shareholders in the system - whether coal mines, railroads, or utilities - enjoyed huge profits under deregulation, and the last thing the shareholders want is to see all those profits plowed back into building wind farms - they'd far rather run their dirty coal plants into the ground for another decade, wouldn't they? They tend not to live downwind of coal plants, or drink water poisoned by coal mines, and their response to global warming is to turn up the air conditioning.

This is why we need government regulation that will force all energy corporations to switch to renewables - because without regulation, the shareholders will simply move their investments to whoever has the largest profits, and under the current system, that means whoever has the dirtiest, most polluting energy source - because those sources are still cheaper.

However, the fact of the matter is that when you do true cost accounting of fossil fuels on one side, including things like pollution, global warming and warfare, and renewables like solar, wind, tidal, and clean biofuels on the other, then you find that renewables are far cheaper than fossil fuels. For one thing, the raw energy sources - the sun and the wind - are never subject to exhaustion, as fossil fuels are.

Dingell and his collegeu Boucher represent this coal-fired electricity generation behemoth, not the American people. Dingell also does side work for the transportation industry, which operates similarly.

In the case of the auto industry, it really is a sad story. They were essentially prevented from jumping into the high-efficiency, high-mileage auto market (Prius or electric cars). If GM had kept their electric car in production, there's little doubt it would have been a best-seller over the summer.

What seems to have happened, however, is that the oil industry likes low-mileage cars because it keeps demand high, which is really the story behind the SUV in the 1990s. The connecting glue is just like the coal-fired system - except here were are talking about the petroleum-fueled transportation system. Crude oil producers, oil refinery operators, fuel traders, and marketing chains all want to see a high demand for their product. An independent auto corporation wouldn't care about that, however - they'd want to be selling the cars that people come rushing in to buy. However, if the same people who own GM also own Exxon, Chevron, Conoco, etc. - well - you see the problem, I hope?

Nevertheless, by getting involved with the oil cartel, the U.S. auto industry has destroyed its own competitiveness. Their management seems to have ceded control of their business plan to external oil interests, if you ask me, and now they're facing the blowback - consumers don't want it.

That's what cartels do: self-destruct, sooner or later.

Dingell, by refusing to raise CAFE standards, was a major part of the problem - so it is great news that he no longer controls the committee.

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