Well, after months of hard work with the best advisors money can buy, Ford & GM announced a bold strategy to revive their ailing industry — more government loans, please.

I don't know about you, but something is missing here, and it's missing in great measure ... innovation. As Nancy Pelosi pointed out above (at Netroots Nation) "For some reason they have not gotten it together to say, 'We are going to take the lead in innovation.' I believe they are having these problems because they have not done that."

Of course, the auto industry as a whole has suffered because of the recession, but it has also suffered because of a lack of truly innovative products. Products which give consumers a great ride and fantastic fuel efficiency at a reasonable cost.

A tail pipe dream? That's certainly what the auto manufacturers want us to think. For decades now, they have pitted "efficiency" against "performance" as if these two mortal product enemies are mutually exclusive. You get to have one, but not both. 

But this has been proven wrong time and again. I recently pulled out a fantastic article written about a year back by Clive Thompson for Fast Company called "Motorhead Messiah." The piece features the extraordinarily innovative work of Johnathan Goodwin, a mechanic in Kansas, who using standard GM parts was able to retrofit a Hummer to get 60 mpg, while dramatically improving both emissions and performance.

Goodwin is skeptical about GM's supposed difficulties in innovating their product lines:

The could do all this stuff if they wanted to. The technology has been there forever. They make 90 percent of the components I use. I've just been messing around and seeing what I can do.
Goodwin's experiment began when he purchased an H1, and was astounded by its poor performance — 6 miles to the gallon and "...zero to 60 in 2 days."

He pulled out the old engine and put in a GM diesel Duramax V8. Right then you get 40 percent improvement in mileage and a 20 percent reduction in emissions due to the higher efficiency of diesel fuel. With minor alterations, the vehicle was optimized to use biodiesel from waste oil. Then he added an innovative, and relatively low-tech, hydrogen gas injection system, which basically blends hydrogen with the diesel to create much more efficient combustion, doubling the already improved mileage to an astonishing 60 mpg. And that's for a 5,000-pound vehicle which now goes zero-60 in 5 seconds! 

At an auto show back in 2005, GM engineers supposedly swarmed his retrofitted twin-fuel engine to see how he did it. But three years later, still no major development. Now the Hummer line is being terminated, along with thousands of jobs.

Is it just laziness or maybe insurmountable difficulty in retooling their lines? Goodwin doesn't think so. As he said, "Detroit could so all this stuff overnight if they wanted to."

When pressed GM told Fast Company that they main reason was lack of availability of the fuels — like biodiesel and hydrogen, both of which are required to get his remarkable 60 mpg. To that, Goodwin spelled out a three-step plan that is so sensible it's hard to imagine why it's not part of any recovery plan:

  1. Convert 1/3 of the passenger fleet to standard diesel. This would require little alterations to existing assembly lines and would result in a dramatic reduction of oil consumption — 1.4 million barrel per day, exactly what we import from Saudi Arabia.
  2. Then introduce diesel hybrids. A simple battery pack that he developed using again standard auto parts, allows a driver to use almost no gas for in-town driving.
  3. Then, when hydrogen gas is more readily available, launch twin-fuel engines that integrate the hydrogen injection technology.
So the big question remains, with all the government pressure and readily available made-in-the-USA technologies, why won't Detroit innovate? 

I believe to get the answer we will, again, need to follow the oil money

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