The DOW continues to plunge. The $700B economic bailout begins. GM is screaming for assistance. CitiGroup files for bankruptcy. We have elected a new president. Words like recession, depression, deflation are making newspaper headlines. With the economic downturn what happens to all of the efforts and corporate commitments to green? Will green still be seen as gold, or just a waste of precious financial resources? President-elect Obama supported green during his campaign and it will be interesting to see how he could use governmental assistance as a means to promote green industry. He has close to $700B to make the greening of Corporate America a reality.
One consideration is to assist GM (and other US auto manufacturers) with government loans that require the auto giant to re-invent itself and re-tool so that it can manufacture energy efficient automobiles that people will actually want to buy. The factories could also become a target for green technologies that reduce waste and promote sustainability. Such an arrangement could reach far into the supply chain, labor force, and even dealerships.
GM has been in a death spiral for many years and is burdened with legacy costs that adds to cost but not to value.However, it is beyond this blog to say whether it should receive government assistance or not. GM has shown some efforts toward producing green autos with the introduction of the new environmentally friendly Chevy Volt . However, it is hard to forget that it was GM's Chairman of the Board, Bob Lutz who said that global warming was a "crock of shit". I wonder if Lutz still thinks American car-buyers are not ready for anything other that our SUVs.
This situation could turn out a few ways. The price for a barrel of oil is now again under $60 and with inexpensive gasoline flowing again, perhaps the Lutz legacy will be SUVs and Bankruptcy. However, House Speaker Pelosi, and Senate Majority Leader Ried are days away from proposing such a bailout and perhaps, just perhaps the legacy will go the other way and Lutz will transform GM into a big green car-making machine. Time will tell.