What's good for GM 'may' be good for the country

CNET News.com's Charles Cooper believes CEO Rick Wagoner's ideas for new high-tech autos are a good start--but just a start.

So all it took was for crude oil prices to approach the $100-a-barrel mark and warehouses to overflow with unsold gas guzzlers to convince the U.S. auto industry to rethink their assumptions about customer behavior.

But in keeping with my New Year's pledge, let's take the glass half-full approach and commend Detroit's best and brightest for finally getting a clue about how to extricate themselves from a mess--even though it's one largely of their own making. (Sorry for backsliding already, but I couldn't resist.)

On Wednesday, General Motors' Chief Executive Rick Wagoner described at the Consumer Electronics Show how a combination of fuel-cell technology and lithium batteries would power his company's upcoming line of zero-emissions vehicles.

Neat idea and a lot of people--including yours truly--hope it leads somewhere. In the early and late 1970s, there was a lot of chatter about how the U.S. must wean itself from a decades-long fossil fuel addiction. That moment in time quickly faded. Since then, the U.S. auto industry has dragged its heels to the point where the pessimist in me wants to dismiss Wagoner's keynote speech as yet another false start. But hope springs eternal and there now is another big factor in the equation lending urgency to finding a breakthrough.

The report describes a perverse competition between people and automobiles for food crops.

Oil demand from China and India is surging and gasoline prices aren't likely to drop significantly anytime soon. The corporate mandarins who run this country watch the same trend lines and they recognize that it's folly to pin the future of mechanized transportation on fossil fuels. Wagoner's talk was only the latest confirmation of a new way of thinking about this old problem. But given how little consensus exists about how best to proceed, any attempt at perestroika (American-style) is not likely to go smoothly.

To be sure, the auto industry's tentative embrace of fuel cell and other advanced technologies is good for a headline on a slow news day. Still, it's going to be a slog. The first won't arrive on show lots for another two years and even then, who knows? Meanwhile the big bucks are going into agri-business's favorite cash cow: biofuels.

By pure coincidence, Wagoner gave his speech just as I came across a new report on global political and economic trends (PDF) published under the auspices of the World Economic Forum. If you're a pessimist, I wouldn't recommend it as bedtime reading.

The report describes a perverse competition between people and automobiles for food crops. Biofuels are expected to consume as much as 30 percent of our domestic corn crop by the end of this decade--and this at a time when prices on many staple foods touched record highs last year.

For some reason I don't get, this story still doesn't grab many headlines. We in the prosperous West still believe ourselves immune, but it's not just the folks in the developing world who are feeling the pinch. Consider that during the last year:

• Food prices in the U.S. rose at twice the rate of non-food, non-energy inflation.

• Food prices in the United Kingdom climbed faster than any time in the past 14 years.

• Food prices in China, the world's factory of choice, soared more than 17 percent.

The present often looks bleaker than it really is and I don't belong to the alarmists' camp. With a little luck and clever thinking, we usually find a way to muddle through. Still, if the United Nations is right, the world's population will surpass 9 billion people by the year 2050, making the need for arable land even more acute. I wonder how that will square with government policy makers around the globe who believe that biofuel production remains their best option?

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