I did a cable TV interview the other day in which the interviewer asked me repeatedly if the automakers' tentative $15 billion interim bailout (taken from pre-approved money to develop fuel-efficient cars) would actually be used to "green" the industry.
Frankly, no. It's not enough money. The cash will go to pay down accumulated debt and keep the doors open until the incoming Obama administration comes up with a much bigger package. Ultimately, bailing out Detroit could cost $150 to $200 billion. Taxpayers, fasten your seatbelts.
As CNN points out, Detroit is desperately hanging on to development programs like the 2010 Chevrolet Volt (even as it axes or delays others) because it shores up green credibility. This is true even though the Volt won't do much for the bottom line, and, because its numbers (at least initially) will be so small, it won't significantly impact GM's product line, either.
GM, with cash running out very fast, has said it is putting more than $750 million into the Volt, which a spokesman calls "the first step in a long-term viability plan."
Dave McCurdy, the former Oklahoma congressman who leads the Alliance of Automobile Manufacturers trade group, told me this week that the bailout is an essential precursor to a cleaner, greener Detroit. “In order to have an advanced green economy for the auto sector,” he said, “it’s vital we have a healthy and competitive auto industry. Our companies are making a transition to hybrids, clean diesels and eventually the electrification of the automobile. We are moving in that direction. If the Detroit-based companies take government money there will be conditions, and it’s clear they want to see environmental products in the future.”
So even if there isn’t a “business case” to be made for the Volt and cars like it right now, they are still in every sense timely products. McCurdy, a Democrat, told me he is an Obama supporter (not a common position in Detroit) who believes that “climate change is a serious national problem” (more heresy among automakers). The Alliance has a history of fighting environmental regulation, but McCurdy seems determined to make some changes. “The Obama election gave us an opportunity to reset some of our discussions,” he said. Let’s hope so.