Getting in gear - Bailing out Detroit automakers

My friend, Matt, grew up in a Detroit suburb called Bloomfield Hills and for his 17th birthday, his parents got him a car. He wanted to have the fastest car in school so he picked the Mitsubishi Eclipse, but the car he got was an Eagle Talon. It was identical to the Eclipse, except it bore the badges of an American car company. In Bloomfield Hills, status isn’t conveyed by owning the fastest car, but by owning the fastest American car. Around Detroit, the three diamonds in the Mitsubishi logo might as well be a hammer and sickle.

This week, the CEO’s of the "Big Three" U.S. automakers will be back before Congress begging for their bit of the bailout bonanza after initially being rebuffed. Two of these guys run companies that will basically be out of cash by the end of the year (GM and Chrysler), and the third company (Ford) only has cash-on-hand because it mortgaged everything it owns — including its oval-shaped blue logo. Still, the chief executives of all three not credit-worthy companies flew into Washington on private jets so they could ask for $25 billion in loans. I give them credit for their collective cojones, but it’s too bad there isn’t a functioning brain in the bunch. They think the problem is that they’re running out of cash and the solution is to borrow. They’re wrong. The problem is the industry has passed them by, and they’re running out of cash because nobody wants their cars. The solution is for the Big Three to change the industry.

First of all, two of the three have to go. None of them seems to be good at the business of designing, building, selling, and servicing new vehicles, so let’s combine them into one iconic American car company. To level the global playing field, let’s give that company, its unions, and its suppliers as many benefits for innovation, capital investment, and healthcare as can be written into the tax code. And to get the American public to buy in, I propose a national design challenge to come up with a name and logo for this company in an "American Idol" meets "Project Runway" reality show — produced by PBS and hosted by Michelle Obama. I’d watch it.

Also, the time has come to phase out the one thing most responsible for killing our country and our planet: the internal combustion engine. There, I said it and I don’t care if it gets me assassinated because the internal combustion engine will eventually be the death of us all. These things run on gasoline and diesel fuel, the need for which compels us to pay a fortune to former nomadic tribes in the deserts of western Asia who occasionally send our money back to us in the form of exploding young men. As a by-product, these engines create noxious fumes that poison the air we have to breathe and help raise the temperature of the planet we have to share. The sooner we focus our engineers and engineering students on developing the automotive power plant of the future, the better off we’ll all be. And if anybody says that’s a pie-in-the-sky, decades-away solution, tell them about the Tesla Roadster (an electric car available right now that hits 60 mph in about 4 seconds, will do 130 mph, and can go up to 250 miles on a single charge) and wait for their comeback. They won’t have one.

And the car buying process has to change. Most salesmen are like drug dealers who act like a car is worth whatever someone is willing to pay for it and before the credit market tightened up, dealerships made as much money selling car loans as they did selling cars. I suggest these CEO’s watch the disturbingly authentic movie, "Suckers," in which the mentality of the car business is summed up perfectly in two words, "we’re whores." Because when you have a pusher on the lot selling crappy cars and a shark in the office selling overpriced loans at a brothel of a dealership, it’s not surprising when there are no buyers.

The biggest phenomenon in the business in recent years has been the Toyota Prius. It sells for more than its sticker price, its buyers wouldn’t drive anything else, and its owners report nearly 100 percent satisfaction. Unlike other status symbol cars, it says more about its owner’s priorities than it does about its owner’s finances. When the American auto industry makes a high-quality product that says its owner is part of the solution, we’ll all insist on buying American — just like Matt’s parents in Bloomfiel Hills. Then these CEO’s can go back to business as usual, giving outrageous sums of money to Congress instead of trying to get outrageous sums of money from Congress.