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[bob ford <bobford79 AT yahoo.com>]

This commentary from Tom Friedman in today's NYT gives an entirely different 
reason why the auto bail-ouy will not work.  I've read Friedman for years, 
and though I do consider him an expert on International affairs, I don't 
value his opinion on domestic or financial affairs any higher than any other 
opinion maker, small-town or big city.  This is just a bit funny that two 
different commentaries from two opposing points of view, both imply the 
bail-outs are mind-numblingly stupid...........

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While Detroit Slept 

 
By THOMAS L. FRIEDMAN

Published: December 9, 2008 

As I think about our bailing out Detroit, I can’t help but reflect on what, 
in my view, is the most important rule of business in today’s integrated and 
digitized global market, where knowledge and innovation tools are so widely 
distributed. It’s this: Whatever can be done, will be done. The only question 
is will it be done by you or to you. Just don’t think it won’t be done. If 
you have an idea in Detroit or Tennessee, promise me that you’ll pursue it, 
because someone in Denmark or Tel Aviv will do so a second later.


Why do I bring this up? Because someone in the mobility business in Denmark 
and Tel Aviv is already developing a real-world alternative to Detroit’s 
business model. I don’t know if this alternative to gasoline-powered cars 
will work, but I do know that it can be done — and Detroit isn’t doing it. 
And therefore it will be done, and eventually, I bet, it will be done 
profitably. 

And when it is, our bailout of Detroit will be remembered as the equivalent 
of pouring billions of dollars of taxpayer money into the 
mail-order-catalogue business on the eve of the birth of eBay. It will be 
remembered as pouring billions of dollars into the CD music business on the 
eve of the birth of the iPod and iTunes. It will be remembered as pouring 
billions of dollars into a book-store chain on the eve of the birth of 
Amazon.com and the Kindle. It will be remembered as pouring billions of 
dollars into improving typewriters on the eve of the birth of the PC and the 
Internet. 

What business model am I talking about? It is Shai Agassi’s electric car 
network company, called Better Place. Just last week, the company, based in 
Palo Alto, Calif., announced a partnership with the state of Hawaii to road 
test its business plan there after already inking similar deals with Israel, 
Australia, the San Francisco Bay area and, yes, Denmark. 

The Better Place electric car charging system involves generating electrons 
from as much renewable energy — such as wind and solar — as possible and then 
feeding those clean electrons into a national electric car charging 
infrastructure. This consists of electricity charging spots with plug-in 
outlets — the first pilots were opened in Israel this week — plus 
battery-exchange stations all over the respective country. The whole system 
is then coordinated by a service control center that integrates and does the 
billing.

Under the Better Place model, consumers can either buy or lease an electric 
car from the French automaker Renault or Japanese companies like Nissan 
(General Motors snubbed Agassi) and then buy miles on their electric car 
batteries from Better Place the way you now buy an Apple cellphone and the 
minutes from AT&T. That way Better Place, or any car company that partners 
with it, benefits from each mile you drive. G.M. sells cars. Better Place is 
selling mobility miles.

The first Renault and Nissan electric cars are scheduled to hit Denmark and 
Israel in 2011, when the whole system should be up and running. On Tuesday, 
Japan’s Ministry of Environment invited Better Place to join the first 
government-led electric car project along with Honda, Mitsubishi and Subaru. 
Better Place was the only foreign company invited to participate, working 
with Japan’s leading auto companies, to build a battery swap station for 
electric cars in Yokohama, the Detroit of Japan.

What I find exciting about Better Place is that it is building a car company 
off the new industrial platform of the 21st century, not the one from the 
20th — the exact same way that Steve Jobs did to overturn the music business. 
What did Apple understand first? One, that today’s technology platform would 
allow anyone with a computer to record music. Two, that the Internet and MP3 
players would allow anyone to transfer music in digital form to anyone else. 
You wouldn’t need CDs or record companies anymore. Apple simply took all 
those innovations and integrated them into a single music-generating, 
purchasing and listening system that completely disrupted the music business. 

What Agassi, the founder of Better Place, is saying is that there is a new 
way to generate mobility, not just music, using the same platform. It just 
takes the right kind of auto battery — the iPod in this story — and the right 
kind of national plug-in network — the iTunes store — to make the business 
model work for electric cars at six cents a mile. The average American is 
paying today around 12 cents a mile for gasoline transportation, which also 
adds to global warming and strengthens petro-dictators.

Do not expect this innovation to come out of Detroit. Remember, in 1908, the 
Ford Model-T got better mileage — 25 miles per gallon — than many Ford, G.M. 
and Chrysler models made in 2008. But don’t be surprised when it comes out of 
somewhere else. It can be done. It will be done. If we miss the chance to win 
the race for Car 2.0 because we keep mindlessly bailing out Car 1.0, there 
will be no one to blame more than Detroit’s new shareholders: we the 
taxpayers. 



http://www.nytimes.com/2008/12/10/opinion/10friedman.html?hp


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--- On Wed, 12/10/08, bob ford <bobford79 AT yahoo.com> wrote:

> From: bob ford <bobford79 AT yahoo.com>
> Subject: [Homestead] Auto Bail-out vote today
> To: homestead AT lists.ibiblio.org
> Date: Wednesday, December 10, 2008, 10:39 AM
> The Dems just announced on CNBC they plan to vote for the
> auto bail-out this afternoon.  The Repubs are opposing.  The
> Dems have the numbers , except in the Senate, and the
> moderate Repubs will probably follow the Dems.  We shall
> see.  Below is an article from the WSJ atating that even if
> the bail-out passes, it will not work, for reasons he gives
> in the article.  You may agree or disagree; personally, my
> new car is small and fuel-efficient, and that was my
> preference.
> 
> What I believe, and it is just myu opinion; is that this is
> nothing but political payoffs.  The large (& corrupt)
> Union have always supported the Dems; this cycle, all big
> business also supported the Dems .  Go to the site Lynn or
> someone mentioned and see the percentages of money given by
> those groups to the dems.
> 
> For much of the Bush administration, the repubs have
> governed as Dems, now we are seeing the beginning of the
> real thing.  For those who pay t*xes, or have children or
> grandchildren who expect to pay t*xes, g-d protect us from
> these fools............................
> 
> -------------------------------------------------------------------
> 
> 
> The Bailout That Won't Would you buy a car from
> Congress?
> 
> By HOLMAN W. JENKINS, JR.
>  
> Leave it to Bob Lutz, GM's voluble vice chairman, to
> puncture the unreality of the auto bailout he himself has
> been championing. In an email to Ward's Auto World, he
> notes an obvious flaw in Congress's rescue plan now
> taking shape: The fuel-efficient "green" cars GM,
> Ford and Chrysler profess to be thrilled to be developing at
> Congress's behest will be unsellable unless gas prices
> are much higher than today's.
> 
>  
> 
> The profitable part of Detroit.
> "Very few people will want to change what has been
> their 'nationality-given' right to drive big and
> bigger if the price of gas is $1.50 or $2.00 or even
> $2.50," Mr. Lutz explained. "Those prices will put
> the CAFE-mandated manufacturers at war with their customers
> -- and no one will win in that battle."
> 
> Translation: To become "viable," as Congress
> chooses crazily to understand the term, the Big Three are
> setting out to squander billions on products that will have
> to be dumped on consumers at a loss.
> 
> None of this was mentioned at four days of congressional
> bailout hearings, because Detroit knows better than to
> suggest Congress has a role in the industry's problem.
> Yet its own recently updated Corporate Average Fuel Economy
> regime, or CAFE, makes a mockery of the idea that government
> money will render the companies profitable, even as the same
> bailout bill demands that the Big Three drop their legal
> challenge to a California mileage mandate even more
> unsustainable than the federal government's.
> 
> Forget Chrysler, which has needed a bailout from Washington
> or Stuttgart in three of the last four recessions. The
> tragedy of GM and Ford is that, inside each, are perfectly
> viable businesses, albeit that have been slowly murdered
> over 30 years by CAFE. Both have decent global operations.
> At home, both have successful, profitable businesses selling
> pickups, SUVs and other larger vehicles to willing
> consumers, despite having to pay high UAW wages.
> 
> All this is dragged down by federal fuel-economy mandates
> that require them to lose tens of billions making small cars
> Americans don't want in high-cost UAW factories.
> Understand something: Ford and GM in Europe successfully
> sell cars that are small but not cheap. Europeans are
> willing to pay top dollar for a refined small car that gets
> excellent mileage, because they face gasoline prices as high
> as $9. Americans are not Europeans. 
> 
> In the U.S., except during bouts of high gas prices or in
> the grip of a Prius fad, the small cars that American
> consumers buy aren't bought for high mileage, but for
> low sticker prices. And the Big Three, with their high labor
> costs, cannot deliver as much value in a cheap car as the
> transplants can.
> 
> Under a law of politics, such truths were unmentionable in
> last week's televised circus because legislators are
> unwilling to do anything about them. They won't repeal
> CAFE because they fear the greens. They won't repeal
> CAFE's "two fleets" rule (which effectively
> requires the Big Three to make small cars in domestic
> factories) because they fear the UAW. They won't hike
> gas prices because they fear voters.
> 
> make no mistake: An even more massive auto wreck lies ahead
> when a soon-to-be taxpayer-financed and taxpayer-owned auto
> industry confronts a California rulemaking that, in a silly
> gesture against global warming, would render most of its
> auto designs, profit centers and tooling unsalvageable.
> 
> We hate to admit it, but the only good idea from the
> bailout debate is the proposal for a new "auto
> czar." Along with disposing of Chrysler and downsizing
> Ford and GM, his job should be to confront Congress with its
> own policy cowardice and failure. If saving gasoline and
> Detroit are both worthy goals, let's ditch CAFE and
> institute a gasoline tax to make consumers value the cars
> government is forcing auto makers to build. If Congress
> doesn't have the tummy for that, at least ditch the
> "two fleets" rule so Detroit can import small cars
> to meet the mandate.
> 
> Alas, Barack Obama's vaunted "change"
> apparently doesn't include spending the political
> capital to make Congress acknowledge the failure of CAFE. If
> he can't do better than throw taxpayer money at a dismal
> policy disaster like our fuel-economy regulations (and so
> far he seems to be joining Congress in pretending it's
> all Detroit's fault), we might as well give up on his
> presidency along with any hope of progress on the
> nation's other unresolved dilemmas.
> 
> His campaign never really answered the question of whether
> he was Chance the Gardener or Abraham Lincoln. We might as
> well find out now.
> 
>  
> 
> 
> 
>       
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