Economy and Environment: The Case for Helping Detroit

I’ve been very concerned about the state of U.S. auto manufacturers as they continue to lose dollars and market share, and shed jobs. The news from Detroit is grim, and the decline of the auto manufacturing sector affects not only auto workers, but companies and workers that produce parts in the supply chain.

On the other hand, I am aggravated that the “Big Three” have put so much emphasis on heavy, gas-guzzling vehicles. Now gas prices are high, and people are looking around for higher mileage options, and manufacturers who have too many eggs in the SUV/truck basket are feeling it. Eventually, I will need to buy a replacement for my 1991 Ford Taurus, and I want to buy another Ford. But, I also want a hybrid car. So, my options are limited, though my hopes are on Ford promises of a Hybrid Fusion.

Inspired in part by the Apollo Alliance, which is crafting a coalition of worker and environment interests, I am interested in possible win-win solutions for U.S. auto manufacturers and the environment. Imagine my delight, then, when Senator Barack Obama (D-IL) laid out just such a proposal yesterday!

Speaking at a Policy Leadership Forum at Resources for the Future in Washington, DC, Senator Obama described his proposal for a government role in helping U.S. auto manufacturers invest in more energy-efficient cars. His proposal calls for the government to pay 10% of the automakers’ retiree health care costs, with 50% of these cost savings to be invested by the automakers in hybrid, advanced diesel, and other fuel-efficient technologies in the U.S.

This proposal appears to address one of the loudest complaints of the “Big Three,” that the burden of health care costs for retired workers is making it difficult for them to compete (estimates are that these costs add $1500 to the price of each GM car). As well, the proposal addresses multiple policy objectives of helping to preserve manufacturing jobs while reducing emissions from vehicles.

Sounds like a win-win to me! Let’s see if the proposal picks up supporters.