Christmas was once again a wonderful time to gather with my family, and enjoy the fun that can only be had with loved ones from different generations.  Santa visited, and brought with him a great assortment of gifts that were universally treasured.  But there was something I secretly wanted, but have yet to receive.

I’ve spent a lot of time over the past few months reading from various sources about the current challenges our global economy faces.  The financial meltdown brought on by the ABCP farce seemed to sneak up on us (or at least it snuck up on Sen. “the fundamentals of our economy are sound” McCain).  But the disaster we are seeing in the automotive industry, and specifically, the “Big 3” is something many people have seen coming for years.

I have vastly simplified their problems down the the following:

  1. They build and sell cars in a way that is not economically sustainable.
  2. Their labour costs are completely out of whack with the value the jobs deliver.
  3. Management has utterly failed to lead the companies by fighting the forces that weaken their viability.
  4. Management makes large bonuses to maintain the failing status quo.
  5. The quality of their product is weak.
  6. The unionized environment enriches workers, but destroys any possibility of a culture of innovation, improvement and efficiency.

The talk of a bailout is rampant, and it’s become clear to me that the politicians are absolutely going to give billions of our dollars to the same managers and union bosses that got us into this mess.  There is less political risk if the Big 3 go bankrupt if you voted to give them billions of dollars.  He can say “well, I tried”.  It seems to me a cowardly and reckless way to lead and manage my tax dollars.

So, back to my missing Christmas gift…

There are moments in history, usually brought on by crisis, and real risk of loss or devastation, where the political will to really impose change exists.  Some changes were good, others bad.  Unfortunately, the bad ones are usually really bad.  But things improve when there are bad headlines, and widespread outrage, fear or anger.  Planes are safer because of terrible crashes, as are cars.  The healthcare industry changes when pharmaceuticals or tools are proven to be dangerous.  Our planet, according to many, is trending towards a very dangerous outcome due to the impact of greenhouse gases.  There is no universal consensus about this amongst the scientific community, but there is rarely consensus where billions of dollars are at stake.  As a rational person, I’ve looked at the data on both sides, and have agreed with the YES side.  Having traveled around the world, I’ve seen the impact that humans have had on their environment.  You don’t think mankind can significantly impact the planet?  I suggest you travel to Beijing in the summer and take a deep breath.

The reliance on oil as the basis for our transportation is hitting us on 3 levels:

  1. The emissions are destroying the atmosphere.
  2. The massive transfer of wealth from the west to the middle east is a dangerous threat to our national security.
  3. Oil will eventually become very scarce.  The “easy” oil is gone, and now we’re digging deeper and in areas that were previously “off limits”.

So, let’s review.  We have an industry (automotive) on the verge of collapse.  Without massive change, and taxpayer assistance on a previously unprecedented level (unprecedented until the TARP funds), the “Big 3” will fail.  We have an environment being damaged globally by the products these very same companies are mass producing.  Do you see where I’m going with this?

There has never in history been a more prescient moment to change the automotive industry.  I propose the following:

Taxpayer money will be made available in the form of loan guarantees, as well as grants (let’s call them “investments”) to the “Big 3” and the related fuel infrastructure players, provided they meet the following conditions:

  1. Immediate R&D into Hydrogen based propulsion system.  If they need help, ask Honda about their Clarity model.
  2. No R&D funds will be spent on any petroleum based engine technology.
  3. With the exception of parts to support the vehicles currently on the road, all manufacturing facilities will be used to produce Hydrogen fuel cell based vehicles.
  4. Fund the Hydrogen distribution/retailing infrastructure.  Incentives to stations who will provide Hydrogen refilling stations.
  5. Fund the creation of clean Hydrogen generation stations.

Taking these steps will result in a transformation of the automotive industry that will set up our children and grandchildren for success.  They will have great vehicles, that run on a clean and sustainable fuel that is not driving wealth out of our economy, and pumping poisonous emissions into our air.  As an aside, I think that if the “Big 3” want to continue to build the vehicles in the same way they have previously then the bailout funds should come directly from Exxon, Shell, BP and the rest of the oil companies.  I think the oil companies should look at this as a marketing expense, since it will be ensuring the channel through which they derive the vast majority of their income survives.

It’s concerns me greatly that this isn’t being discussed by the government and environment leadership in North America.  This is an opportunity we must seize.  It’s not our only opportunity to make changes.  We’ll get another final chance when the actual supply of oil starts to reduce (in the next 10-20 years).  But if you think the current situation is difficult, imagine what things will be like then.

So, please help me get my Christmas gift.  Talk about this idea.  Tell your friends, colleagues, and family.  And then talk to your MP, Congressman, Senator, Prime Minister and President-elect.

There is no easy way out of this mess.  If you think I’m a tree-hugging automobile-hating kook, then read more of my blog.  I’m a passionate car guy.  I have had a lifelong affair with cars, and I always will.  The hardest problems usually come with the potential of having the biggest upside.  I’m tired of half measures and pointless  compromises.  We owe it to our kids.