What to do About the Auto Industry?

First the US auto-makers went cap in hand (by private plane no less) to Washington to ask for a bailout. Now we hear talk of support being requested for British car-makers too - initially for the luxury Land Rover/Jaguar group now owned by India’s Tata Motors.

Car sales are down dramatically - in the UK, November sales were around 35% down on the same time last year - and it is hardly surprising. Big purchases like cars are not on most people’s shopping lists at the moment.  This leaves the industry in big trouble.

As readers will be aware, the auto industry is a major employer on both sides of the Atlantic, both with an enormous chain of suppliers employing a vast workforce, all of whom will be affected by the failure of the industry.

>>More about the auto industry bailout at Green Options

So what is to be done? There are obviously those on the Right whose view is that the industry (and other industries) should stand or fall in a free market - one presumes they were the people who formed the US Senate opposition to bail-out plans. Equally, there are plenty of environmentalists on the Left who are not conceptually very concerned about a reduction in production capacity for the quintessential fossil-fuel-guzzling consumable that is the automobile.

Letting the auto industry go to hell in a handbasket is probably not an option, however, especially in the US. The impact on the economy would be one thing. But the direct and indirect human impact would be terrible.

That leaves us wondering how to square this particular circle. We are faced with a powerful combination of crises, both economic and environmental. Is there a way to address both at once? Well, yes.

Many years ago back in my Undercurrents days, there was a plan proposed by the shop stewards at Lucas, then the leading UK maker of car electrical components. They suggested that instead of what they were doing at the time, which already went well beyond auto parts into aerospace, they should focus on environmentally-friendly products. Wind generators, no less. Needless to say, management rejected the plan. But now it’s time to dust off ideas for converting existing environmentally-unfriendly industries into ones that will help supply the environmentally-friendly energy sources we’ll need to survive the climate crisis.

Despite the recession, renewables are big business and encouraging them is exactly what we need to do at the moment. If we are going to stimulate industry and thereby the economy, and we need to get our carbon emissions down at the same time, why not do one to ensure the other?

Last time I looked, a few months ago at most, there were only a handful of large-scale wind-turbine manufacturers in Europe and they were all overstretched. Prices were rising rapidly and turbines were back-ordered with long lead times: they simply couldn’t make enough. Now there is something that not only the car industry, but also aerospace, with its vast expertise in materials and other areas, could get into. The development of clean technologies in itself is an economic stimulus, and they are something we can sell overseas too.

And needless to say, the auto industry can make cars too, but it needs to specialise in small, electric models and others using alternative fuels - but not biofuels until we can source them from cellulose (such as grasses) directly (and thus avoid taking up agricultural land that we will sorely need as global warming bites), and not hydrogen until we can separate and store it at home (carting it around in huge tankers is really silly, and pipelines use enormous amounts of energy just to run them). But by all means encourage research in new alternative, emission-free technologies.

There is a set of obvious ways of achieving all this. On the one hand, by all means bail out the auto industry, but with strict requirements on what needs to top the agenda in return, namely:

• The rapid transition to the abandonment of vehicles powered by fossil fuels
• The rapid introduction of efficient, environmentally-friendly vehicles with the minimum possible energy use
• The manufacture of wind turbines and other renewable technology-based systems
• Accountability and oversight to make sure our money is really resulting in the job being done - call that giving the people an important seat on the board

Hand in hand with that we need a set of political measures just to make sure it all happens:

• Extremely strict emissions and fuel economy measures phased in to coincide with the ability of manufacturing to deliver the requirements
• Significant investment in public transport infrastructure, especially railways and especially not roads or airport expansion, starting at once
• Bring public transport into (back into in the case of the UK) public ownership (in the UK, around 75% of the population already want to see the railways re-nationalised)
• Introduce free public transport for residents and ongoing funding from local taxation - so you are already paying for public transport and it makes sense to use it
• Congestion-charging zones in major cities following the London model
• Fiscally-neutral vehicle purchase taxes that penalise gas-guzzlers with carefully-designed allowances for vital (eg agricultural) use
• A commitment to switch 100% of energy production to renewables within 10 years (ie the goals of RePower America*)

Some people might want to add import controls to this list, but that’s an entire can of worms I won’t open very far. My personal belief is that you should only have free trade between economic equals, but it’s not a field I feel confident to discuss in detail.

The basic principle is simple: Bailouts for significant industries must not represent a blank cheque. They must move the country in an environmentally-sound direction, addressing both the economy and climate change at a stroke.

* Basically, the goals of RePower America are: Energy Efficiency, Renewable Generation, a Unified National Smart Grid, Transition to efficient plug-in cars. See http://repoweramerica.org/

Image: Wikimedia Commons

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