DETROIT (Reuters) - A major automaker teeters on the brink of bankruptcy. Its major union strikes over demands for unprecedented concessions.
But it emerges from the crisis with a more flexible manufacturing base and a seemingly unstoppable ambition to lead the industry into a green future of environmentally friendly cars and record profits.
The game plan for General Motors Corp. (GM.N) in 2007 has an unexpected precedent: the history of arch-rival Toyota Motor Corp.(7203.T) circa 1950.
And as Iain Carson and Vijay Vaitheeswaran argue in "Zoom: The Global Race to Fuel the Car of the Future" ($27.99, Twelve), the high-stakes game is still very much on -- pitting giant incumbents like Toyota and GM against a scrappy band of upstarts and entrepreneurs.
The prize: the chance to develop clean-energy technologies including a new generation of hybrids, biofuels, electric cars and fuel-cell vehicles that could power the automotive industry into a second century.
Carson and Vaitheeswaran, both correspondents for The Economist, make the case that while the auto industry is often dismissed as the problem when it comes to global warming and energy policy, it should be seen as the part of the solution.
For one thing, auto manufacturers remain the biggest spenders in the world on research, with more and more of that investment targeted on ways to produce cleaner cars.
"Since even America has woken up to the threats of climate change caused by the rising emissions of global-warming gases, the car industry is in the front line of the battle against carbon," they write.
Although "Zoom" chronicles the ways that the automakers formerly known as Detroit's "Big Three" and Big Oil long ignored the environmental and economic threat from the heavy dependence on oil and America's love of the open road, it also charts more hopeful signs of change and innovation.
In some important ways, they argue, the future for cars may look more like its distant past.
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In the early days of the automotive industry nine out of ten cars produced were battery powered, and Henry Ford pioneered a "flex fuel" design long before it became trendy by ensuring that his Model T's could run on both gasoline and ethanol brewed from corn.
Now upstarts like Tesla Motor, backed by space entrepreneur Elon Musk, are racing to get a piece of the post-internal combustion market. Tesla's all-electric Roadster, expected to go into production next year, boasts a faster acceleration than a Ferrari.
But Toyota remains the case study for success in a changing world, rising from a near-collapse after World War Two to become the richest and most successful automaker.
By the mid-1990s, Toyota's chairman Eiji Toyoda became very worried by the company's burgeoning success and challenged developers to build a car that offered 50 percent better fuel efficiency than the basic Corolla.
The result was the Prius, the game-changing hybrid that launched in 1997. A decade later, Toyota controls about 80 percent of the market for hybrids in the United States.
GM, which just came through a union strike linked to a restructuring plan, wants to steal that environmental mantle by beating Toyota to market with the first rechargeable electric car.
More of that kind of innovation, Carson and Vaitheeswaran say, coupled with a move by developing economies in India and China to leap-frog the United States in transportation technology, could make the problems of dwindling oil supply and climate change less dire.
But they also argue that U.S. policymakers have to rise above an army of special interests to find a way to tax oil in order to reflect the otherwise invisible "external" costs of burning it to power cars.
Interestingly, major U.S. automakers have shown an openness to such an economy-wide "carbon tax" if it was coupled with a move to scrap plans for a sharp increase in mandated, fleet-wide fuel economy standards.
Source:
Reuters
By Kevin Krolicki
