Do U.S. Automakers even deserve a bailout?

  Junkyard photo: Google Images

Sometime today, Senate Democrats will introduce legislation to use part of the $700 billion bailout for US automakers. Is this a good idea? It's a tough call.

On one hand, if we truly believe that a free market should dictate winners and losers, then clearly letting them fail should only be seen as nothing more than the result of a working system. However, if the US automakers fail, then we're looking at massive economic devastation, and the loss of roughly 1.4 million jobs. With unemployment already at 6.5%, this doesn't help matters.

So let's take a step back for a moment, and just evaluate the position the US automakers put us in today.

For decades, these bloated suits sat in their boardrooms in Detroit forcing gas guzzlers down our throats, refusing to offer vehicles with better fuel economy. The result has essentially been a financial backlash that could've been avoided had arrogance not been the basis of their decision-making processes all those years. So now, while it's clear that monster SUVs are no longer acceptable in a post-peak world, we're supposed to shell out $25 billion of our money so they can stay in business?

It's a tough pill to swallow. And I certainly don't claim to have the answer. But if Congress does decide to throw Detroit a lifeline, let's hope our elected officials have the good sense to attach some teeth to this deal. In fact, if they hand over that money, at least two conditions should absolutely be met:

1. The automakers have three years to retool their facilities to produce nothing but    fuel efficient vehicleswith a minimum fuel economy requirement of 60 miles per gallon. Don't care how they do it. Whether its hybrid, plug-in hybrids, lightweight materials, better aerodynamics, etc. - not a single vehicle coming out of those factories should be inefficient. And no exceptions either. If your SUV can't deliver it, then you can't sell it. I guarantee you, the market will find a contender that'll deliver that kind of fuel economy if they can't. Don't kid yourself on that one. That's the beauty of competition. It forces progress.

2. Every single penny of that $25 billion is paid back to the tax payer.

When I threw this idea out to my colleagues, they laughed at the 60 mpg minimum. But this is not a laughing matter, and 60 mpg is not out of the question. Not when we're already seeing small start-ups pumping out all-electric sport utility trucks and sports cars delivering between 100 to 230 miles on one electric charge. Not when high school students at the 2008 Eco-marathon build a vehicle that can get 2,843 mpg. Yes, you read that correctly – 2,843 mpg. And definitely not when we continue to send billions overseas to continue our dangerous reliance on oil.

Listen, there can be no more excuses. These automakers need to get their acts together now. Enough with the lobbying efforts, enough with the complacency, enough with the handouts!

And by the way, since we'll require the US automakers to produce nothing but 60 mpg vehicles, we should make this a mandatory requirement for all automakers. You want to do business in this country? Fine. Do it by our rules. They'll have no choice. Without the US hardly any of these automakers could survive. It's time we start making demands instead of excuses.

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