Reply #7: Detroit Fairy Tales - Financial Times (Germany) [View All]

[Tierra_y_Libertad]

http://watchingamerica.com/News/14596/detroit-fairy-tales/

The truth is, what would help the manufacturers most – a recovery in the automobile market – isn’t on the horizon. Industry experts are predicting further losses in 2009, both for domestic and foreign markets. A recovery isn’t even foreseen in 2010. During such crisis conditions, anyone depending on alternative power systems to save the industry is bound to be bitterly disappointed. Car manufacturers need at least three model generations to perfect such new technology to the point of mass acceptance. That was the historical case for the automatic transmission, for the new electronics of the 1990s, and it will not be any different for fuel cell and battery power now.

If the United States wants to maintain at least a core vehicle manufacturing capability, the government has to remain in the background, patiently pay the bills and push through industry restructuring. Developing new technologies swallows up billions of dollars. Taxpayers must make that investment, even though Ford and GM may not sell their first electric vehicle for years. At the same time, the government has to offer incentives in the energy arena in order to build the necessary infrastructure. All of this takes time. If all goes well, the first electric production models might appear on the market in ten years or so.

In order for the Big Three to actually begin their taxpayer-financed restructuring, the UAW must also make big concessions. They have to make compromises that will result in production costs comparable to those of their foreign rivals in the Southern states before they can once again compete.