Thursday, April 16, 2009

Are Obama and Gore killing the auto industry?

American auto makers have plenty of problems. Bad labor agreements, dodgy consumer credit and economic uncertainty have no doubt contributed in their own ways to weak auto sales.

I suggest one more factor: Hope 'n Change in the era of global warming.

"But wait a second," you're thinking. "Hope and Change are going to make the auto companies successful."

Yeah, right. Hear me out.

We're going to build our economy on a new foundation. We'll turn to alternative energy sources.

Anybody see that in the current crop of automobiles?

Well, there's the hybrid ... but it's now pretty much common knowledge that hybrid technology isn't really the answer as things now stand. Hybrids are a bit like projection televisions. They offer a certain advantage (marginally better gas mileage for hybrids, larger screen size for projection televisions), but they both represent transitional technologies. A few years after big screen projection televisions hit the market nobody wanted them any longer because they're bulkier and offer an inferior picture compared to plasma and LCD machines.

And hybrids cost. People do not want to pay out the nose to drive the equivalent of next year's projection television. They don't.

Compounding the problem for auto makers, people don't want to buy non-hybrids either. Neither type of vehicle appears to fit the vision of the near-to-distant future. Popular culture has set our expectations to the point where we regard the traditional automobile as dinosaur-in-waiting.

If my analysis is on track, auto sales are now driven by those blindly seeing green (those who haven't caught on that hybrids aren't the answer and won't save them money) and those who just happen to need a new car and who won't buy used. I can imagine that some retirees won't care whether their next car fits the vision of the future since the future for them is now, in effect.

A climate that allows for traditional (that is, relatively inexpensive) internal combustion engine cars to fit the vision of the future will enable auto makers to sell cars.

It's almost that simple.

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