• E-mail this page
• |  Print this page
• | 
• | 
• | 

5 Things GM's Bailout Package Must Have

Last month, I argued in favor of the GM bailout package, because I believe Americans should make things -- servers, cars -- that are more technologically complex than cheeseburgers. Now, with Congress apparently poised to move on some kind of financial rescue plan, it's time to decide how to rapidly reshape Detroit's Big 3 to make hybrid, electric, and fuel-cell vehicles. Here's my five-point plan.

1) Acquire Tesla Motors.

This once high-flying startup electric car maker has recently hit a financial roadblock. Development costs have surged unexpectedly, and high-end buyers aren't nearly as keen on the company's costly electric cars amid the sagging technology. Indeed, Tesla is asking for $400 million in bailout money of its own. But if the goal is to reposition Detroit for the technology of tomorrow, then linking GM and Tesla is a shotgun marriage made in bailout heaven.

GM's got the marketing network; Telsa's got the technology chops. Really, the Chevy Volt, with its sad 40-mile on a charge range, isn't the answer to GM's electric prayers. But Tesla's approach could be.

2) Use some of the bailout money to build roadside charging stations.

Does anyone want to buy a car that will only go 40 miles on a charge, if you can't be sure of finding a place to plug it in when you're away from home? Me, if my gas gauge starts to tilt toward 1/4, I'm looking at the thing whenever I'm not fiddling with the radio or heater controls. Nope, for plug-in electrics to really take off, we need to build up the national infrastructure of charging stations. And this includes curbside outlets in urban area. (Hey, Con Ed, see if you can make them shock-proof, OK?)

BTW, please don’t talk to me about roadside battery-changing stations. It's bad enough when one has to replace the single, corroded, won't-hold-a-charge battery in today's cars. Do we really want to be slinging around multi-hundred-pound packs, and getting saddled with some other person's won't-hold-a-charge loser? I think not.

3) Hydrogen stations, too.

I'm convinced electric is merely a temporary placeholder until the real auto technology of the future is ready. That would be, fuel-cell vehicles. These cars combine hydrogen and oxygen to generate electricity, which powers electric motors. (Water is the harmless "waste" byproduct of the whole process.) Honda is the leader here. GM, Ford, and Chrysler need to get going on this stuff. But the biggest impediment, even more so than with the electric vehicle, is the need for infrastructure support in the form of roadside hydrogen refueling stations. Use the government money to jump-start their construction in major urban areas.

4) Give Americans tax credits to buy hybrid and electric vehicles.

Surprise! These already exist, at least partially, as the FuelEconomy.gov Web site notes. You can get a $3,000 tax credit on a Ford Escape hybrid. However, you get nothing for a Toyota Prius or a Honda hybrid. The reason is, the credits expire once more than 60,000 units of a given vehicle have been sold.

I'd boost the credit to $5,000 and remove the expiration thing entirely.

The whole idea for tax credits for hybrids is a more sound idea than the latest tax-credit talk that's been making the rounds. This thinking goes that it's insane to give the automakers gobs of bailout money if Americans are still not going to buy their cars. So some people have suggested that taxpayers get a credit -- say, $5,000 off of what they'll own on their 1040 -- if they purchase a Big 3 auto.

That's fine, as far as propping up Detroit's mostly failed business model (though I give props to Ford for being ahead of the get smaller/greener pack). However, if we really want to accomplish the key national goal of energy independence (as opposed to simply throwing good money after bad), why not give a tax credit to Americans who buy any new-tech vehicle, be it hybrid, all-electric, or fuel-cell. As well, give the credit regardless of who the manufacturer is. Buy a Honda hybrid, get a credit. This would address the complaints of those who'd rather see Detroit autoworkers on the unemployment lines (where they'd receive government money anyway, for 26 or 39 weeks) than have the government pick winners and losers. More important, like I said, it'd aid in our shared national goal of making us less dependent on important oil.

5) Ask Exxon Mobil to pony up some R&D dollars.

I heard this one suggested Wednesday morning on Morning Joe." Host Joe Scarborough pointed to Exxon Mobil's humongous 2008 profits (they will net some $46 billion this year; next year, sadly, that's expected to fall to $34 billion). He suggested that the oil behemoth get ahead of the curve and start buying into alternative-energy research, so that when the days of big oil have waned, big oil will have prepared itself by morphing into big green.

This is what leaders of our industry call "eating your young." I'm not so sure, though, that there's enough hot windmill air (or hydrogen) to make up for today's mega-earnings. Après Exxon, le déluge?

What's your next car? Please leave a comment below, or shoot me an e-mail directly at alex@alexwolfe.net.

Like this blog? Subscribe to its RSS feed, here.

For a mobile experience, follow my daily observations on Twitter.

Check out my tech videos on this YouTube channel.

Alex Wolfe is editor-in-chief of InformationWeek.com.

« A Peek At Open Source In 10 Years | Main | iPhone Roundup: Apps Store's Top Tens, Easy Wi-Fi App, Amazon App »