Electrify America: Re-tooling and Re-charging the American Auto Industry

By Jesse Jenkins, Breakthrough Generation Co-Director

This post is part of our week-long Special Issue exploring ways to sever the link between transportation and oil by electrifying transportation. Stay tuned for more...

Toyota Motor Company announced today it's intention to retool two U.S. manufacturing plants currently building giant, full-size trucks and SUVs to instead build hybrid-electric vehicles. Meanwhile, Ford is expected to reveal more details this month on their plans to retool several plants to build the more fuel efficient models they currently sell in Europe.

As automakers scramble to react to rapidly shifting customer preference driven by spiking fuel prices, isn't it time for the United States government to make investments that help re-tool and re-charge the American auto industry?

Toyota's re-tooling plants, announced today, involve opening the first U.S. plant to build their popular hybrid Pruis at a new factory in Blue Springs, Miss. originally intended to assemble sport utility vehicles. The Japanese automaker also plans to immediately halt production of its two largest vehicles, the Tundra pickup and Sequoia sport-utility vehicle, for three months. Next spring, Toyota will consolidate production of the Tundra at one of two U.S. plants that currently manufacture the full-size truck and retool the second plant to produce the hybrid Highlander SUV.

In one of the most dramatic manufacturing transformations in Detroit's history, Ford Motor Company announced plans in June to retool several North American plants to produce smaller and more fuel-efficient vehicles the company currently builds in Europe, where Ford is a leader in the small-car segment. This is a necessary but costly process though for the cash-strapped company, and it's unclear how well the American auto giant can weather the transition. Converting a single factory to advanced, flexible manufacturing lines can require up to six months of off-line time and cost $250 million or more!

According to the Detroit News, Ford also plans to thoroughly review its entire product pipeline in North America, hoping to accelerate the introduction of new, more fuel-efficient cars and to build more vehicles on fewer platforms.

These are smart reactions from both companies. Americans are clearly clambering for more fuel efficient vehicles and the waiting list for the Prius and other hybrids is months long. Most importantly, it's clear that the time is now for automakers and policymakers to plan proactively for the future of transportation. And as we've been exploring all week here at WattHead, that future lies in electrifying our cars, trucks and trains.

With the American auto industry reeling and already retooling their plants and strategies, we now have an unprecedented and urgent opportunity to help Re-charge Detroit!

Strategic and timely investments can help cash-strapped automakers get through the expensive but necessary transition to new manufacturing plants ready to churn out advanced hybrid, plug-in hybrid and electric vehicles. By doing so, the federal government has the opportunity to help secure our Energy Freedom at the same time that we help re-vitalize the ailing American auto industry, the economic cornerstone of so many American communities.

A timely investment package could include:

1. Tax credits or low-interest loans for automakers that retool manufacturing plants to build hybrid-electric, plug-in hybrid or full-electric vehicles or the batteries and other major components of these advanced cars and trucks.
   
   
2. The "Health Care for Hybrids" plan that relieves American automakers of their mounting "legacy" commitments (health care and pensions for retired auto workers) that are as high as $1,500 per vehicle for General Motors. In exchange, participating automakers would make investments in modernizing and retooling plants to build fuel efficient and hybrid vehicles.
   
   
3. Expand and publicize tax credits for consumers who purchase hybrid, plug-in hybrid and electric cars and trucks that have fuel economies at least a certain percentage (40%?) higher than a conventional vehicle in the same class.
   
   
4. Public-private partnerships to develop and refine advanced batteries for hybrid and plug-in hybrid vehicles and other key advanced vehicle components. The 2007 Energy Bill included some incentives and R&D funds for advanced batteries and advanced light-weight vehicle components, but clearly, fast-tracking advanced vehicle development is a national imperative in today's climate of economic downturn and mounting energy costs.
   

This is just a quick brain-dump of possible investments that could give Detroit and the auto industry the shot in the arm it needs, re-vitalize our troubled economy, and help secure America's much-needed Energy Freedom. What else can we do to Re-Charge Detroit?