What to Do About the Big Three?

Continuing from the post I posted yesterday, the argument that I am putting forward and building upon is that the technology or technological innovation can never provide answers to the issues whose roots lie in social & economic behavior of the people.

Let me first give following supporting arguments to the hypothesis above

1. All consumption on this planet is human consumption, every other form of consumption is only to support the human consumption
2. The only forms of basic consumption are food and sex and any other form of consumption is only to support the basic form of consumption. Sex is the reason for life to come into existence and food is the one which keeps it going.
3. There is nothing such as clean energy except for the natural flows of heat and mass and natural thermodynamic reactions.
4. Law of nature is supreme and is sustainable. Any consumption or human activity conflicting & contradicting the laws of nature can not be sustained forever.

Before I elaborate in proving above arguments, let me give an example of a small change in our social and economic behavior which can induce a big change and make any legislative action on big 3 automakers or any technological innovation look superficial and scratchy.

On an average each of the adult human being consumes approx. 2 Kg food or food equivalent in any form in a day. Considering the fact that there are 6 billion people on this planet and assuming that the average distance each unit of food has to be moved is approx. 100 KMs before it can be consumed, a simple mathematical calculation will show that total movement of food alone is approx. 1200 Billion KG Kilometers a day or 1200 Million KM MTS/ day. A truck running at fuel efficiency of 30 MT-KM per liter of fuel would imply that 40 million liters of gasoline is burnt on moving of food alone, leave alone the supporting infrastructure such as fertilizers, steel, farming equipment, farming labor, ships, too also have to be moved to support the production, distribution, and consumption of food alone. At any rate more than 30% of total energy consumed can directly or indirectly be linked to the activities related to food only.

Our typical food constituents include food grain, cereals, vegetables & fruits, milk & dairy products, meat, and poultry.

Now consider a situation where every household has a kitchen garden at the backyard, where each of them is growing some fruits and vegetables and also has its own dairy to meets its own milk, poultry, and meat requirements. Waste generated in growing vegetables and fruits can support the cattle and poultry and waste generated by the cattle can again be recycled back to growing of vegetables and fruits as organic manure in a self sustaining and naturally recyclable manner. A small piece of say 200 square meters of land would be enough for a family of 5 to be able to self sufficient in 30 to 40% of its food requirements and not to think of what all form of transportation and consumption will get eliminated.

You would not have to move food, and when you do not move food you also eliminate the transport that you need to go to nearby supermarket to buy food, you eliminate the retailing and distribution infrastructure which all require steel and cement in creating it, refrigeration and cold storage in storing it, trucks in transportation which again need steel to build them, etc. etc. The list can go on and on but at the bottom of it what will get eliminated is unnecessary consumption of natural resources, human time, and energy which otherwise are being consumed only to meet the food requirements of the generations of human being which otherwise can very well be produced by the individuals themselves and for that all that is needed is a small piece of land and small amount of labor.

We want to produce more and more of steel because we want to build more and more plants which can produce more and more cars, trucks, tractors, farming equipments, ships, war planes, passenger aircrafts, rail roads, etc. etc., which again need more and more of steel. We want more and more of cement and steel so that we can build more of more of high rise buildings, skyscrapers, which will house more and more of white collar jobs, and more and more white collar workers travelling to work will need more of more of cars, buses, rails, tramways, which in turn to move will need more of more of roads to be built, bridges to be erected, subways to be constructed, tunnels to be dug, and so on and on so forth. More and more people on white collar jobs means more and more demand for cloths and fashionable accessories which in turn implies more plants, more cement, and more steel again. People with busy lifestyle would have less and less time so more demand for packaged food, more need for refrigeration and cols storages, more washing machines, more dish washers, more retail chains, more departmental stores, all leading to creation of never ending lust for more and more resources. All this for only one thing that we actually consume and which really gets into our body, gives us energy, helps us to grow from a little over a foot when born to a little below 6 foot when adult, a little over 6 pounds when born to something over 150 pounds when grown is nothing but food and food alone.

Imagine so much more of everything can just be eliminated with so little of one thing and that is to tell the people to grow a part of their food requirements themselves in their backyard and for that all that is needed is a small piece of land and a small amount of labor with every other resource provided by the natural processes.

Irrespective of whatever you may be not withstanding your social, political, or economical standing which in any case is a measurement of humans on the scale designed by the humans, by the humans and only for the consumption by the humans, the body biologically and chemically converts all the inputs into same enzymes, amino acids, which in turn get stored into human body cell in same manner which is no different from any two individuals on the planet. Body temperature of a healthy body be it richest among the rich or poorest among the poor still remains 98.6 Degree Fahrenheit, the heart beats at 72 beats a second, the blood pressure remains between 70/ 120 mm of Hg and so on.

When the nature itself has not created any difference then who are we to create and imagine the differences which can exist only on scale made by us and understood by us.

Any debate about something imaginary called clean energy or clean electrons is flawed and superfluous. Take for instance wind energy. Winds blow due to temperature and pressure differences created due to more absorption of heat by the surface as compared to absorption of heat by water. This is a natural process by which thermal imbalance is corrected. It is also a process in which large amount of moisture is carried for oceans to far our places where this moisture precipitates either in form of rain or snow. It is a natural mechanism which takes water to those places where there is no water. Rain water or snow water when the snow melts in summer’s flows into rivers which in turn spread the hidden mineral wealth stored into the mountains to the plains, make the basin land fertile, take water to far out places and also support a variety of aquatic life along with it. Just think how much damage a wind turbine can cause. It can change or dramatically alter the direction in which wind blows, change the pattern of rain fall, alter the thermal balance, destroy the biodiversity of the planet and cause damages to the extent which we can not imagine today. Building more of windmills will be something like creating a China Wall which is as high as Mount Everest between the land mass and oceans.

So is the case with tidal energy. Tides with it bring pots of ocean wealth on the coasts and help various kinds of lives to thrive and sustain. Any attempts to arrest the flow of tides is fraught with the risk of permanently changing the coastal line on this planet.

Solar energy is also not as clean as we think it is. First of all to store solar energy we need huge solar panels and batteries. PV cells made of silicon and the batteries made of lithium are again environmental hazard in terms of disposal. In any case lithium is a scarce material and there is not as much of it as much is needed to solar energy to be a meaningful substitute. There are still many other aspects related to solar energy which are unknown to us. Take for instance for more than the number of years that are known to us, the sun is giving us the same amount of energy at any given day of any year. During the day time this energy is absorbed either by plants in endothermic chemical reaction called photosynthesis or is absorbed by the earth. During the night time the heat absorbed during the day is radiated back. To maintain the thermal balance the amount of heat absorbed has to be equal to the heat radiated and this balance has to be maintained every day and every night. The solar heat is also responsible for the way winds blow and the climatic changes are managed and maintained by the nature.

Now let us assume that bulk of the heat that is given by the sun is stored in photovoltaic cells and is converted into electricity that can be used by us anytime we want. In first place if the total heat given by the sun is constant and a large portion of it is absorbed by the cells not by the earth, whether it will have any impact on the way wind blows, the way it brings rain and snowfall to various parts of the world is still a mystery that is unknown to us. Secondly plants convert heat from sun into food in a chemical reaction called photosynthesis. We have no idea as to what impact it will cause on this process and other processes in our ecological system.

Like 50 years back in our quest and thirst for energy we did not realize the impact and irreversible damage the greenhouse gases could cause, we should be careful this around before concluding if there are any clean electrons at all.

If at all there is any clean energy then it is the energy that is produced by plants in terms of food in endothermic chemical reaction of photosynthesis in which plants convert all forms of waste into meaningful substances which are essential to support any kind of life on this planet.

We have to realize the fact that human life can be supported only till the time there are other firms of life on the planet as humans can not feed on humans. In fact apart of mosquitoes, some forms of bacteria, and parasites no other form of life has ever fed on humans and can ever feed on humans.

For a moment the Americas of the world must forget their big brother attitude and think that they must lead on this front as the solution to the issues raised is neither in technological innovations and nor are these to be found in micro or macroeconomic actions the American government must take on big 3 automakers but is in changing of the behavior.

We must forget that if there is any division called developed world or developing world or underdeveloped world because what we have come to know of as development is nothing but mindless overconsumption and what have known as underdevelopment might as well be a blessing in disguise. Americans could be in shock if the development is measured on the scale of happiness as for all the consumption they could still be the unhappy people on the earth.

Coming back to the idea that a small change i.e. make everyone grow a significant portion of the food they consume by themselves can in fact bring about a big change in our social and economic habits and reduce the consumption of natural resources to a great extent without in reality causing any impact on the quality of life (it will improve only if any as we will have much cleaner air to breath in, brighter skies in day and night, a lot of natural sun and so on).

What social and economic actions the governments of the world can take, could be as follows

1. Educate People about the need to change their lifestyles, reduce consumption, and lead a life which is adapting with nature not challenging it. Our modern education system has produced more and more of knowledgeable people but also less and less educated. Knowledge is about knowing but education is about learning and adopting. The way we teach our kids has to be changed. The teaching will have to made practical and meaningful. Someone once told me that give a men a fish and you are feeding him for once but teach him how to fish; you are feeding him for the life.
2. Build more and more self reliant and self sustaining economies and eco systems. Nature has given enough means to sustain life locally. Beginning can be made by stopping all cross border trade in food. When you either export or import food in fact you are either exporting or importing energy, water, and all kind of natural resources. Coming from India we know what it means to build locally self sustaining economic, social, and ecological system. Mahatma Gandhi once said that there are enough of resources on this earth for everyone to live but there are not enough of them to satisfy everyone’s greed. India was never blessed with abundance of natural resources as compared to the population it had. It had also undergone multiple numbers of attacks and foreign invasions. Yet before the British rule and East India Company rule, probably the Indian economy was as large as the combined economy of Europe and had much higher standards of living then many other parts of the world. The root of that lied in the social, political, and economic systems which allowed local self contained economies to flourish. Even the technology used relied more on conservation of natural resources and using them within their natural cycles of replenishment. Industrial revolution which today is at the stage where it has caused irreversible damages to our systems began from the West not from the east.
3. Find a way by which we can lead a life which is at peace with nature not always at war and conflict. Take housing for instance. We all need houses to protect us from the adversities of the nature as the nature has been crude to us and has not blessed with the natural instincts by which we can protect ourselves. However we can also build houses from the natural elements such as stones, mud, wood, straw etc. Sure we will not be able to build high rise apartments which need a lot of cement and steel and require a lot of energy to keep them going, but what we need is a house for protection not a high rise buildings. Have we ever realized that when we build a house or any structure made of concrete with it we are also robbing the planet of clean water? The world consumes 2 billion MT of cement every year and also with it same amount of water that is absorbed in chemical reactions in formation hydrates and hydro silicates where the water is trapped in chemical reactions and is never released back. So with two billion tons of cement also gone is 2000 billion liters of clean water every year which is enough to meet drinking water requirements of all the people for all the days in the year, and we talk about rising water scarcity.

The last thing I wrote in my arguments is that the laws of nature are supreme and sustainable. We can divide all the natural cycles into two parts which either complete daily every 24 hours and which complete every year every 365 days.

Scientist can continue to debate on what is the age of our earth, solar system, galaxy, and the universe. They can also debate on the theories as to what gave the birth to the universe. But there are some universal truths which are beyond any doubt and debate.

Take for instance, irrespective of whatever may the age of planet, solar system, galaxy, or universe what we know is that the earth rotates on its axis and completes one rotation in a day. It is happening, has been happening and continue to happen for the time we can not predict. Many of our biological and ecological systems also follow a 24 hours cycle. So is true about the fact that earth moves around the sun in 365 days. Much of our climatic changes, cropping cycles, water cycles etc. follow a 365 days cycle aligned to the movement of earth around the sum. The tidal waves are controlled by the moon’s movement around the earth and its distance from us relative to earth’s distance from sun. All of these systems have been functioning and will continue to function. To conclude if the natural systems that govern the life on this planet are sure to sustain till any time horizon that is known to us there is no reason as to which the life on the planet can not sustain provided we know and learn the way of leading a natural and non threatening way of life.

I can be contacted on my e-mail id of rkg.delhi@gmail.com.

I found How to Fix a Flat a bit sensational - so here's my response regarding your proposed economic value chain.

About calling Steve Jobs [noteworthy last name J.O.B.S.]: Let’s see… My 2003 iPod is inscribed with “Designed by Apple in California Assembled in Taiwan”. My 2008 iPod is inscribed with “Designed by Apple in California Assembled in China”. Mr. Friedman, are you suggesting that American cars be inscribed with similar language? “Designed by GM in Michigan Assembled in China”. How about our homes: “Designed by Toll Brothers in Pennsylvania Assembled in China”? How about our airplanes: “Designed by Boeing in Washington Assembled in China”? How about our food: “Designed by Kraft in Illinois Assembled in China”? How about our government: “Designed by US Government in Washington, DC Assembled in China”? How about your editorials: “Designed by New York Times in Maryland Assembled in China”?

The problem with the big 3 is not primarily their product or their reliability. Their reliability is the current times is very close to that of the Japanese or the Germans, according to consumer reporting agencies, Ford Motor Company is only hundredths of a point behind the first and second companies. The problem with the big 3 is their inability to escape the unions. Unions, while good to protect workers from unfair labor conditions, have grown too large and too greedy for their own good. The automakers are crippled by unions by providing the union workers with huge benefit and pension packages. That money could be spent on exciting new models, either performance or green, or even better, combination of both. The big 3 did used to make exciting and great selling products, remember the first generation mustang? Over a million made from it's introduction at 1964 1/2 to 1966. Get rid of the unions and the big 3 will get you some innovation.

Just viewed your interview on Hardball. Good point regarding the generation of people buying japanese cars. Most all automakers dabble with fuel efficiency, size, weight, etc. The consistent problem with the Big Three is the lack of reliability/quality of their product. If people could buy the big 3 existing cars and trucks that lasted like a Honda until 300,000+ miles and beyond,with confidence, Detroit would not be in this mess. There is an entire generation now,working on a second generation, that has absolutely no respect for the quality and reliability of the Big Three automobiles. The appearance of the product has improved but no one wants to buy a car and spend time with the car in the shop, even if its covered by a good warranty. Its a shame, we can do better.

I like Astrid J. Scholz's idea from Nov. 11 10:01pm. We should assist them in retooling their factories for the future.

We need plants (plural) at the big 3 producing vehicles like the Chevy Volt now. Producing more alternative energy vehicles is long over due as well. We need to get the R&D in overdrive in regards to a production model hydron fuel cell option.

Some could produce wind turbines, solar panels and other alternative energy infrastucture products. Then sell all of the wind turbines to T. Boone Pickens.

Still others could be retooled to build mass transit alternatives. Make more long range busses using more green alternative energy sources. A national high speed rail system anyone?

If we are going to bail them out, they need to be set up for long term success in the future. We can't give them 25 Billion or more to continue to offer us new versions of a HUMMER. We need to make sure the American People as well as the big 3 are going to benefit from this. The future of America is at stake.

Or,

We could just nationalize the industry. But thats just the socialist in me. I figure if we are going to spend that kind of money on the big 3, we should own it as American Citizens. How much do you think it would cost, more than 50 Billion, to just buy these companies at their current values?

While I compliment your ideas and economic observations relative to the “crisis” we presently face, I can not help but wonder if you are overlookibng two important factors.

The first issue that needs to be addressed is the increase of executive compensation relative to the lower paid workers. When all compensatory factors are considered such as golden parachutes, retirement benefits, perks, and other “rights of rank” the ratio of executive to worker compensation becomes obscene. While health benefits and pension contributions can affect competitive auto pricing, no one has shown the relationship between executive compensation for the “big 3” versus executive compensation for so-called foreign manufacturers.

This leads to a second issue. An automotive manufacturer that employs American workers should be considered to be a domestic manufacturer. A company that assembles or manufactures outside of the United States, such as Canada or Mexico, should be considered a foreign manufacturer. No automobile company should receive any government incentives that does not directly contribute to employment within the United States.

Finally, we are experiencing a transition from what I term “Detroit marketing mentality”. For too long, out economy has been based upon the “want” of the consumer rather than the “need” of the consumer. The best example of that is the auto industry where all marketing effort is directed towards increasing the public’s desire to purchase new rather than meeting the true needs of ecological sound, energy efficient, cost effective transportation. While we have to live with the “WalMart” effect of the only sales appeal being low price, we have to recognize that after a certain point, low price does not permit the profit necessary for a business to survive.

Henry Ford recognized that the success of his company was based upon the fact that his workers (as well as all other hourly workers in all other industries) could afford his product. Regrettably, no one in today’s Detroit recognizes that line of thought.

Hey,

I saw your interview on the Daily Show, and you should check out http://www.lincvolt.com/. It's a collaborative project, using the same kind of idea exchange that you have set up here, to design a solution for retrofitting existing vehicles. You might find it interesting.

Mr. Friedman...

I've read two of your books, and plan to pick up H,F&G soon... (first encountered it from your column last month in the NYTimes, which was reprinted in the StarTribune...)

Was thrilled to see you on the Daily Show (best show on television) last night, and I have to ask... have you been in contact with Mr. Obama? (Either before or after the election...) Your energy/environmental proposals are so in line with economic policy, that it seems imperative that the message get out - ASAP.

The economic crisis is one thing; the public's fear is another. Because the President-Elect has so much media power so early, it seems like he could do a lot to offer hope and realistic vision for these ideas.

(As an aside about your Daily Show appearance... you notice that when you're smart and have great ideas, Jon Stewart will let you talk!)

Kiran, although I respect your views, and share a vision for a cleaner transportation sector (especially in developing economies), I have a few issues with your reply.

You mention "forcing" fuel efficiency "down the throat" of the Big 3. But why should the government do that rather than compelling consumers to pay for their own resource use? If we don't like burning fossil fuels, then we should tax those that burn fossil fuels through a carbon tax (which I very much support). The fuel efficiency will follow in a way which is more economical. Saddling the Big 3 with more mandates while they are trying to cover their expenditures on health care and product development would be counterproductive.

My point in bringing up China, India, and Russia is that they do not suffer from the lagging effects of rigid US labor contracts. I have no problem with paying workers good wages, and I'm sure that blue-collar workers care about the environment as much as the rest of us. But the government must not be so naive to think that rigid wage schedules are competitive in the global market place. If we in the US can produce the best products, the good wages will follow.

If you're looking for ideas, here are few:

1. An across the board wage cut for those except for new UAW hires (who work at $10 an hour). This includes everybody from upper management to senior line workers.

2. Have the Federal Government pay into the VEBA system that the UAW set up in the latest contract. Last year, GM agreed to start paying roughly 50 billion to get future health care expenditures off their books. As foreign companies pay only a fraction of health care for their workers (if at all), this would level the playing field substantially. For more on the VEBA, see:

http://www.freep.com/apps/pbcs.dll/article?AI...

3. Mandate a national environmental policy based on price-certainty, rather than a patchwork of state specific laws based on everything from emissions to fuel economy to whatever. This includes denying California's request to impose large restrictions on carbon-based tailpipe emissions.

Thanks for reading.

Any Bail Out Must require that every Vehicle coming off the line Flex Fuel Vehicle.

Why ?

#1 its CHEAP $100 per vehicle that's right it cost the Auto Industry just $100 to convert a non flex vehicle into a flex fuel vehicle capable of running on E85 and higher blends of ethanol

#2. We is that important ? Because we already produce 9 Billion gallons of ethanol a year and 99% of simply used as an additive to gasoline instead of as a alternative fuel like E85 or E30, E50 , E60

#3 We already have Renewable Fuels Mandate that requires 36 Billion gallons of ethanol by 2022 and of that 16 billion gallons have to be made form cellulose material .from woodchips to old tires

4. Because President Elect Obama and Joe Biden already support a FFV mandate ..include it NOW in any bail out so the Auto Industry isnt asking for money down the road for this project

5. Because there are already 1900 Stations selling E85 across the United States http://e85prices.com

6.Because FFVs are a fantastic comprise..you dont HAVE to run on ethanol with a FFV , simply means the vehicle is capable of running on either gasoline or ethanol

7 National Security ..if Iran or Terrorist block/or bomb the Persian Gulf of Oil Shipments we have good old American Fuel..Ethanol that everyone can switch too

8. Because it is an actual TANGIBLE solution for the consumer .. The Consumer would have real POWER at the pump...Gasoline too high ..pump ethanol..ethanol too high pump gasoline..creates competition between Oil and Ethanol which leads ot lower prices for all consumers no matter your personal fuel choice

9. Did I mention because it only cost $100 !

While watching the Henry Paulson press conference today, I felt that one question that should have been asked was not:

What are the terms and conditions on which you are going to provide the bailout package to GM?

I think this is the last chance to make the big 3 change their policies. If you do not force them to alter their gas guzzler policies, why allow them to live any longer?

I feel that they should be asked to COMPLETELY stop the production of gas guzzler SUVs and make their assembly lines produce only hybrids, plug-in hybrids, compressed air car or such technologies. They can not be allowed to pollute the world anymore.

By forcing them to produce them only the fuel efficient or green cars, you will not only alter the face of the car industry, you will make them profitable because people are eager to buy the green cars if they are available at reasonable cost. This will happen if they are mass produced.

Remember, ford once produced only black cars because that was cheaper. Now force them to produce only GREEN cars!!

-Kiran Lonikar

My Chevy lease expired this past October and i replaced it with an import.Chevy Reliability was poor and my confidence level is zero.To strenghen confidence G.M. should offer free maintenance and service for 50M miles. That would go a long way to lift the confidence level.Also the procedure to return leased vehicles was intimidating and unfriendly to the customer. No incentives offered to lease another G.N. product.They need to put customer needs first

Mr. Friedmen,

A comprehensive transformation of the U.S. auto industry and its prevailing issues can be less about the technology and more about the workforce. That said, I suggest that as part of any bailout plan that all UAW workers be moved to a universal health care (UHC) plan as soon as possible. This is what the unions and majority of Americans have voted for. In the grand scheme, this might have the impact of a small dent. However, at least 'Joe the Autoworker' will then be covered if the plan fails. This will allow one industry to 'test drive' UHC while other industries can observe the outcome.

What to do about the big 3.
Firstly on a side note the big three American automakers should set a labor cost ceiling -below- their japanese rivals and find a way to get the UAW to accept those terms by giving them something in return. The total labor expenditure including hourly pension and health care is what I'm referencing. Washington should work with the automakers and other major unionized industries that would be helped by a reduction of the absolute financial burden of providing health care. As far as alternative energy is concerned. Hybrid technology should be phased in to automobiles over lets say a 5 year period on all new cars as a condition of govt loans that detroit will need to survive. Additional costs can be offset by tax credits and perhaps an agreement with the treasury/us govt. to ensure very low cost loans over a period of time - reducing the interest expense of the borrowing and then having detroit offset the costs of hybrid technology with lower interest expense. If Washington refuses to end ethanol subsidies over the next year or is unable to then add a requirement that new vehicles also be flex fuel - possibly pass additional fee incurred to detroit on to ethanol producers who benefit from a larger market and increasing prices - stable if nothing else. Create zones where key components of next generation cars are created like engines, batteries, etc. and give the automakers control of the technology of their zones, however, open the technology over a period of time 5-10 years - or until an acceptable final goal (100mpg autos) is reached- to competition on an annual basis from outside competitors to improve on existing technologies. Detroit owns the workers, the facility, and the rights to the final product but on an annual basis if an upstart or engineering dept can come up with a component that outperforms existing technology, than detroit is forced to liscense the technology for another year until the next test. This competition is continued on an annual basis for 3-5 key components and the best feasable technology wins the day.

We need to focus on external combustion engines. ie steam engines of our century, using a medium with a lower boiling point than water, and the heat source could be a number of sources from burning conventional fuels, solar heat exchangers, or an electrical heat coil. the heat source could also be assisted by the friction-heat created by the block of the motor after it is started. The motor could be likened to a heat pump system of a building, with the "Refridgerant" being recirculated over and over.in the early days of the Automobile the Stanley steamer car could compete with the internal combustion engine in terms of potential. a motor like this would probably have the characteristics of a deisle motor. If I were to think of an alternative to the conventional auto power plant this would be my avenue of direction. thats just my thought.

Bill