We should let the US car industry die

A man who sells Vauxhall cars complained to me that other day that nothing is moving off his forecourt except for little runabouts that do 70 miles to the gallon – allegedly.

By Charles Clover Last Updated: 11:27PM GMT 04 Dec 2008

Behind the scenes, the big car manufacturers are threatening their dealerships with dire consequences if they do not achieve sales targets for 4 x 4s, but this is wishful thinking born of desperation.
The car manufacturers are in a fix and lulled by long years of cheap money haven't invested in the kind of cars people would want in a downturn. Gloom is deepest in America, where the intellectual bankruptcy of the Detroit business model, based on flogging gas-guzzling SUVs and giant pickups, is now being matched by actual bankruptcy.
General Motors, Vauxhall's giant parent in America, has told Congress that it will be out of business by the new year if it does not receive billions of dollars to pay off its debts. The social cost if GM folded would be great, with about 5,000 jobs in Luton and Ellesmere Port at risk, not to mention at dealerships.
All the signs are that President-Elect Obama will listen and back some kind of recovery plan for GM, Ford and Chrysler. But he has also promised the 180 nations meeting in Poznan, Poland, this week to discuss climate change that he will take America into a low-carbon future. So how will he avoid tarnishing his shiny halo?
That is the unique quandary for politicians in this recession, because of what responsible people believe is the parallel and real crisis of climate change.
Many of us, in Europe and America, think that GM equals British Leyland and it should be allowed to fold, perhaps with its European operations hived off because they do make some economical cars that people actually want to buy. But that kind of bankruptcy isn't going to happen. Democrats in America are beholden to the unions. There will be a bail-out. Watch out, it could happen here with Jaguar.
What is far from clear, given the politics of the situation, is whether enough attention is being paid to the question of whether the price being extracted for the American public's billions of dollars is high enough.
Unless the Hummer brand is taken off the street forthwith and the wallowing Cadillacs, Pontiacs, Buicks and Chevrolets are converted quickly into the hybrid or electric models that are currently years away from production, what will have been achieved for all that public money?
The American car industry, like its banks, is an example of the failure of government regulation. Now it's time for a reckoning.
• There is little sign that the Government on this side of the Atlantic understands the justifiable use of public money either.
If Alistair Darling wanted a "green New Deal" to benefit the British economy and tackle climate change, two priorities the Government claims it has, he would have put £10 billion a year into the construction industry and paid it to insulate and refit our homes.
As it is, he has waived tax on aviation and motoring and given away £12 billion of VAT on consumer goods, most of them imported. "In every way, about as irresponsible as you can get," says Paul Ekins, professor of energy and environment policy at King's College, London.
• There's a lot of irresponsibility about. Over in Poznan, the EU is in the embarrassing position of trying to persuade the world to accept tougher emissions by 2020, while Poland, the host nation, and Italy are demanding concessions.
Now experts tell me that the Slovakian government has sold millions of tons of "hot air" – permits to pollute based on Communist Eastern Europe's historically higher emissions, rather than real emissions reductions – to a Swiss-based company dealing in arms.
Murky stuff. The whole carbon-trading system – capitalism's only answer to climate change – could unravel unless the naming and shaming begins.
• Scottish Natural Heritage has announced a study to find out once and for all if sea eagles prey on lambs, as crofters allege.
Pardon my scepticism, but I suspect that question will never be resolved satisfactorily while there remains the prospect of receiving public money for lost sheep.