While there is no doubt that the USA is in serious economic trouble and that action from the federal government is required, the wisdom of the government handing the country’s largest corporations staggering sums of money is debatable.

Corporations like General Motors, Ford, and Chrysler arguably employ many of the best business minds that this country, and the world, has to offer.  Yet their business strategies and product development have been short-sighted.  They have paid little more than lip service to a sustainable long-term plan while focusing on short-term profits.  There have been systematic efforts to undermine fuel efficiency and alternative fuels because “consumers don’t want these things.”

This writer isn’t sure who the American automobile manufacturers have been talking to develop their product plans, but it isn’t me.  I purchased a Toyota Prius two years ago and haven’t looked back.  I won’t purchase another car that isn’t at least a gas/electric hybrid.  I’d prefer an all electric like the Tesla, but they aren’t widely available enough to warrant purchasing one.

Toyota, Honda, and others seem to have done a better job of listening to the American consumer than the “Big Three.”  They seem to be taking market share by producing cars that Americans want.  Consumer perception is that the vehicles are better built, cost less to purchase, and cost less to operate.  I’m not certain about the “costs less to purchase” as the Prius cost as much as my Dodge Dakota Quad Cab.  But the Prius is definitely well-built and costs substantially less to operate than any American vehicle I have.

The American car manufacturers have to demonstrate some real understanding of the situation and some real leadership in changing the industry.  It isn’t enough to come to the American taxpayer by way of Congress and say, “Gee, the economy is real bad and if we have to declare bankruptcy it’s going to be much, much worse.”  I have no doubt that the economy would be worse if one or more of the American major car manufacturers were to declare bankruptcy.  A pile of taxpayer money isn’t going to miraculously solve their problems.

How can these American corporations demonstrate leadership?  The first is to curtail their excessive executive compensation and perk programs.  Most Americans find that paying top executives millions of dollars a year while asking the taxpayer to hand their corporations enormous amounts of money outrageous.  Private planes to travel to Washington, DC, as reported in numerous news stories today, to beg for taxpayer money is … well, it leaves one without words to adequately describe the audacity of that act.

The second way that the American car manufacturers can demonstrate leadership is to begin delivering cars that the American public wants to own and drive.  What makes the Prius so successful?  Find out, duplicate it, and improve upon it.  Why does the Tesla capture the imagination?  Find out, duplicate it, bring the mass production techniques that Detroit is so famous for to bear to lower costs, and improve upon it.  The folks that run these companies can surely figure out how to build more fuel efficient, more environmentally friendly, less oil-dependent vehicles and regain the confidence of the American public to purchase their products.  (There’s a side-benefit in that the dependence Middle Eastern oil producers can be reduced or eliminated; but that’s a different essay.)

A third way would be to offer substantial incentives for Americans to trade in their giant gas guzzlers when purchasing a new fuel-efficient or alternative fuel vehicle.  Instead of putting the vehicle back on the market it should be completely recycled (i.e. complete decontamination and reclamation of all materials).  Not only would this be good for the environment, it would create an entire new industry and employ many thousands of Americans … assuming, of course, that the automotive recycling process isn’t sent overseas where it could be done more inexpensively and with less environmental regulation.

It really isn’t fair to the American taxpayer that these giant corporations retain profits for themselves when times are good and shift losses to the taxpayer when times are bad.  But, if Congress is going to decide that it is in the best interests of the American taxpayer to issue a bailout to the American car companies then it should come with some major strings attached that guarantee that the companies will change their business practices.  Holding these corporations to the leadership goals identified earlier is certainly a start.