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Source link: http://archive.mises.org/9020/going-down-green/

Going down green

November 25, 2008 by

On NPR this evening, Melissa Block interviewed William Ford about his company’s need for a federal line of credit. When Block introduced Ford, she did not state that he was an innovator ready to lead his company out of ruin. No, Block instead noted that “Ford is known in Detroit as an environmentalist, steering Ford Motor Co. in a greener direction toward smaller, more fuel-efficient cars.” Seems that wasn’t the solution to Ford’s problem.

Of course, going green may just be the means to getting green.

{ 15 comments }

Michael November 26, 2008 at 6:53 am

Sounds like she was either prepped before the interview, or she took more than a sip of the Kool-Aid.

Ed November 26, 2008 at 7:17 am

As someone who works at a Ford dealership, I’d have to say that from where I’m sitting it sounds more like a Ploy for cash then anything based in reality.

Deefburger November 26, 2008 at 9:19 am

“…Todays program was brought to you by The Ford Foundation….”

I praise Ford for the Hybrids, but we have a few (3) of the Ford Ranger EV pickups that were saved from going the same route as the EV1 here in Sebastopol, Ca.

If they were so all fired green, then why did they scrap the EV project like their other big three buddies? They don’t need a handout, they need new executives!

randy November 26, 2008 at 10:32 am

Seems to me that the auto execs are desperate enough to agree to almost anything to avoid BR. If the FedGov forces them to “go green” and build even more cars that people won’t buy, it will be a total wreck. Americans who could afford them bought SUVs in record numbers, mostly because they did not like the cars either Detroit or the import builders offered (after all, they could have chosen a Toyota, Honda, etc as well as a domestic car rather than an SUV), quite profitably. They have yet to figure out how to make money or cars people buy because they either can’t afford what they would really like to have or don’t care what they drive as long as it’s cheap. If going “green” is The Answer to Detroit’s woes, answer this question: there are already many choices of “small/green” on the market; who don’t people already buy these? Any auto maker makes their real profits on selling products people want, not by selling what people have to settle for. The “want it” factor allows the price and volume to be high enough to make it profitable. Plus, any bailout is a sop to the UAW; Washington could care less about dEtroit or the auto mfgrs.

randy November 26, 2008 at 10:32 am

Seems to me that the auto execs are desperate enough to agree to almost anything to avoid BR. If the FedGov forces them to “go green” and build even more cars that people won’t buy, it will be a total wreck. Americans who could afford them bought SUVs in record numbers, mostly because they did not like the cars either Detroit or the import builders offered (after all, they could have chosen a Toyota, Honda, etc as well as a domestic car rather than an SUV), quite profitably. They have yet to figure out how to make money or cars people buy because they either can’t afford what they would really like to have or don’t care what they drive as long as it’s cheap. If going “green” is The Answer to Detroit’s woes, answer this question: there are already many choices of “small/green” on the market; who don’t people already buy these? Any auto maker makes their real profits on selling products people want, not by selling what people have to settle for. The “want it” factor allows the price and volume to be high enough to make it profitable. Plus, any bailout is a sop to the UAW; Washington could care less about Detroit or the auto mfgrs.

Varun Verma November 26, 2008 at 11:07 am

IMHO, the Detroit needs to take a turn towards greener, more fuel-efficient cars. That is where most innovation in the car industry is going to take place in the future. Big 3 has been making too many gas guzzler SUVs & trucks, while asian carmakers have taken a lead in hybrid & electric battery technologies at a time when we are just coming out of $4/gal gas prices.

However, I do not believe that auto bailout is the solution. I have written an article detailing why auto bailout will not work and proposed what needs to be done to restore a vibrant domestic auto industry:

http://commonsensetopics.blogspot.com/2008/11/big-3-auto-bailout-will-not-work.html

Matt D November 26, 2008 at 12:41 pm

Randy: There aren’t a lot of choices on the market as far as green cars go. Off the top of your head how many truly green cars made by the big 3 can you think of? On top of that Washington should care less about the auto industry. They have proven time and time again that they have no idea how to run their businesses, and they should be forced to file bankruptcy like any other company would have to.

mikeJ November 26, 2008 at 2:55 pm

Matt D
He means not just the big 3 but other companies and countries as well.

Bruce Koerber November 26, 2008 at 11:49 pm

These ‘American industries’ are obviously being run by foolish and false patriots. How else can you explain the ‘Hummer?’

The military industrial complex loved bombing other countries and then showing their ‘personnel’ patrolling around as part of their parade of glory.

Then all of a sudden suburbia is crawling with these fanciful military vehicles all in the name of the ‘USA!’

Every silly fancy of lobbyists connected at the hippocket (where the wallet is kept!) trickled through the apparatus of government and came out at the other end as a patriotic symbol. The sycophants in positions of prominence in these ‘American industries’ then developed products – not to meet the consumer’s desires but to try to propagandize the citizenry.

TokyoTom November 27, 2008 at 1:14 am

Jim, isn’t Ford in better shape than its competitors? Is its plan to build its more fuel-efficient European models in the U.S. a step in the wrong direction?

What do you consider “the solution to Ford’s problem” to be? Bankruptcy to get rid of retirement obligations and to wipe the slate clean with unions?

Sorry for the Qs, but I’m interested and your comments here really provide little indication.

Jim Fedako November 27, 2008 at 8:47 am

TT,

All fine questions. My point is green tends to become an end in itself. Block praised Ford’s green position, but a green agenda must be secondary to having the ability to lead his company away from the abyss.

Ford has been chairman for a decade. His goal should be providing cars the consumer wants, not the cars Block and the greens desire but do not buy.

From what I gather, it appears that going green is the key to federal dollars. The next time the Big Three comes a-callin’ in DC, the CEOs will travel by Greyhound, in pauper’s clothes, trumpeting a green agenda. This is what will open the DC vaults as the political class nods, “Yes, much better. This is how we want you to behave. Here’s your money, give us ownership, and run along now.”

note: I do not pretend to have the skills to lead any of the Big Three. I simply do not want to directly pay for their mistakes and bad judgement. When they profit, it’s theirs (and fractionally mine through investments in mutual funds), when the lose, it’s their loss (and, again, mine to an n-th degree). That is the way it should be.

Happy Thanksgiving!

SailDog November 27, 2008 at 4:45 pm

On this site the word “Green” seems to be a metaphor for all that Austrian School economists see as bad in the world and include variously meddling government, environmentalists (also known as socialists here) and anybody who may be bearded and or who wears sandals and is therefor obviously communist.

Actually we are once again discussing the tragedy of the commons. Gasoline is cheap (both supply and demand for oil are almost perfectly inelastic within a very wide price band), but do not be fooled into thinking Peak Oil has not happened. It almost certainly is now past tense and there are no new energy sources to power the economy out of this hole (as there were last time).

So Ford, to survive absolutely needs to get itself and its products to be sustainable. However it is unlikely to survive. But neither will GM or Chrysler either.

TokyoTom November 28, 2008 at 12:13 am

Jim, thanks.

We can perhaps infer NPR’s tilt, but Block’s intro was actually perfectly accurate – Ford managed to cultivate a “green” image. I agree with you that he actually did nothing to improve Ford’s popularity with consumers, without which the company cannot survive.

I don’t want to pay for the mistakes of the big three or their unions, either. They are responsible for the box they’re in.

I agree that we should be skeptical of their new “green” pleadings – and like you suspect legislators and Obama will cave – but like SailDog think I see some reflexive disapproval of the preferences of “greens”. It’s hard to argue with preferences, though policies are certainly fair game, in which case I would caution that the big three and others have been plenty active (and adept) at the rent-seeker’s game.

And a very happy Thanksgiving to you as well.

Kakugo November 28, 2008 at 5:38 am

Do you want to know which car manufacturers are not feeling the crisis, at least for the moment? Ferrari, Lamborghini, Porsche…
Luxury car manufacturers not exactly known for their fuel-sipping vehicles.
I wonder why nobody said: there’s crisis, and people will not buy new cars, no matter how light on fuel or kind on the enviroment they are. They’ll either stick with what they have or will look for a second hand vehicle. Will the sale of second hand cars be prohibited (some European countries experimented with similar solutions with catastrophic results) to sell more “green” vehicles, which won’t save the planet but will save Detroit?
Also which dealership will take as a partial exchange an SUV right now? Around here there was a craze for Porsche Cayennes a few years ago. People bought it (using credit of course) because it was a status symbol, then realized how expensive it was to own and tried to get rid of them.
But nobody wanted those cars in their used cars lot. Then somebody had the genius idea of buying these cars from desperate sellers for peanuts and ship them over to Russia, Dubai etc to sell them at discount prices.
But now where are you going to send all those Ford SUVs and light trucks? Who will buy them? Smelting plants in India?

Integral March 4, 2011 at 7:50 am

SailDog, wether the mythical peak oil has happened or not, we already have all the fossil fuel sources we need to power us out of this hole and into an even bigger hole and back out again if we wanted. The supply of gas alone dwarfs our access to crude oil, and is even cheaper to get ahold of and commercialize, and after that we have coal to our ears. That and nuclear alone will give us a few hundred years. All of it cheap, sweet and chuck full of energy.

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