Archive for the ‘Transportation’ Category

« Older Entries

Keep Kicking that Ethanol Can

Friday, August 10th, 2012

By David L. Brown

Yesterday I posted an analysis of the current forecasts for a poor corn crop due to heat and drought, and also mentioned that the obvious step to take is to suspend all ethanol production to free up the approximately one-third of the U.S. corn crop mandated to go to distilleries and into our gas tanks. If the corn crop drops by a significant degree, as seems likely, that mandated amount of corn will take an even larger bite out of the supply, perhaps even surpassing one-half of the total.

It’s deja vu all over again, as Yogi Berra said. Back in 2008 I posted this editorial cartoon that appeared on the cover of Quill, the magazine of the Society of Professional Journalists. (I am a 50-year member of SPJ and am immediate past-president of the New Mexico chapter.)

That cartoon is even more appropriate today, because the USDA is refusing to put a stop to the travesty even though a world food crisis is inevitable, putting hundreds of millions at risk of famine. And today, writing in The Financial Times, José Graziano da Silva, the director-general of the UN’s Food and Agricultural Organization, wrote (as reported by Reuters here):

“Much of the reduced crop will be claimed by biofuel production in line with U.S. federal mandates, leaving even less for food and feed markets,” he wrote in an op-ed just a day before the U.S. government issues a pivotal crop report that is expected to show U.S. corn output falling to the smallest in six years and stockpiles at near record lows.

“An immediate, temporary suspension of that mandate would give some respite to the market and allow more of the crop to be channeled towards food and feed uses,” he wrote in a high-profile yet indirect message to Washington.

Obviously, the line has been drawn in the sand by those in charge in Washington and it’s to favor the owners and operators of ethanol plants vs. hundreds of millions of endangered human beings. And not to mention the “inconvenient truth” of food shortages and higher prices right here at home. Already, as I mentioned yesterday, ranchers are liquidating their herds in the face of dried-up pastures and hay crops. How bad is it way out West? I saw a post a few days ago from a rancher in west Texas who said that he’s received just three inches of rain in the last two years.  His critters have long since gone to market and he’s facing a bleak future.

(more…)

Tags: , , , , , , , ,
Posted in Age of Oil, Agriculture Issues, Energy Technology, Famine, Fossil Fuels, Global Security, Transportation | Comments Off

Already Doomed, New Dinosaur Goes to Sea

Friday, November 13th, 2009

By David L. Brown

If there is any segment of the wounded economic world that stands out as primed for failure, it may be the cruise ship industry. There are dozens of floating pleasure palaces plying the oceans these days, many of them only partially occupied and with special “deals” offered by desperate operators that make it cheaper to stay on a cruise ship than to hole up at a Motel 6.

In the news today is the arrival in Florida of the latest cruise ship behemoth, the Oasis of the Seas, as pictured here:

1_21_111309_cruise1This monstrous boat has 16 decks and 2700 cabins, with capacity for 6300 passengers and 2100 crew members. It is 40 percent larger than the next largest cruise ship, and five times the length of the Titanic.

There are literally hundreds of these things, ranging in size from specialized small ships but including dozens of large ocean-going ships. The Oasis of the Seas will bring to 22 the number of ships operated by Royal Caribbean Cruises. Carnival cruise lines has 23, and Princess, made famous by “The Love Boat” TV show, operates 15.

The trouble is that there is no future for the cruising business, and for a number of reasons:

• Fewer people can afford to take cruises, and especially if they are expected to pay full-fare. Many are taking advantage of blow-out pricing, but cruise lines cannot continue to operate ships forever at a loss. The present economic crisis has taken more than ten trillion dollars out of the net worth of Americans, and potential travelers around the world face similar conditions.
• Operating costs have risen substantially, primarily as a result of uncertainties and price spikes in the oil markets. That puts the operators in a serious bind, caught between low bookings and higher fuel costs. My guess is that most ships are losing money at unsustainable rates and that during the next year we will see a great many ships going into dry dock or being sent to the ship-breaking yards in Asia.
• Continual outbreaks of mysterious illnesses on board ships have plagued the industry, confounding public health experts and causing  passengers to stay away in droves.
• Political instability in some areas is having an effect on cruise operators. For example, increasing numbers of Caribbean destinations are perceived as too dangerous for tourists. Dockage facilities at the remaining islands and coastal countries are too limited to take the huge numbers of ships that would like to make them ports of call.
• Pirates, bless their black little hearts, have also contributed to the uncertainty of cruise ship operations, particularly in the Indian Ocean but now spreading to other areas including reports of activity off the coast of South America.

Put it all together with many other factors plaguing the world economy, and it seems that cruise ship days are numbered. And dinosaurs such as the Oasis of the Seas, built at a cost of $1.5 billion, are doomed to extinction.

And finally, is it just me or is this latest seagoing dino just, well, ugly? It reminds me of a barge on steroids, with none of the graceful lines of a Queen Mary II or the late-great QE II, destined to become a permanent tourist attraction in Dubai — a place that is suffering the same kind of implosion now destroying the cruise lines … but that’s a story for another time.

Posted in Age of Oil, Economics, Transportation | Comments Off

Why Americans Want Their Big Cars

Tuesday, May 19th, 2009

By David L. Brown

Earlier today I posted a piece about the new CAFE standards. Although I raised some questions about the scale of the promised benefits and analyzed some of the reasons why it will not result in a sudden near-term reversal of our energy and transportation problems, all in all I am strongly in favor of reducing our use of non-replaceable petroleum on the roads and highways. My only objection to the new standards, if it could even be called a complaint, is that these changes should have been made decades ago.

But we Americans fell in love with the automobile  a long time back, and more than that, we fell for BIG cars. (Unless, of course, they are FAST cars in which case all is forgiven as long as they’re also sexy looking chick magnets.)

The infectious car bug is hard to kick and it’s not going to be easy for Americans to change. Heck, even third world countries have caught the disease as we see from the fact that China has recently become the world’s No. 1 market for new automobiles and Tata Nanos are selling like hot currycakes in India. It looks like it’s almost become a universal human right to own and drive an automobile.

But only we Americans have been so focused on the questionable idea that bigger-is-always-better.

One sign of the resistance by Americans to give up their big iron is illustrated through the use of photos such as the one below, which are intended to demonstrate that small cars are death traps. In fact, I found this image on a blog site where that very point was being made.

truck_vs_car_crash

This picture, it should be pointed out, is from Europe, not America. In Europe people have been driving small cars since Allah was a pup—the BIG car craze never caught on there. (But FAST did, in the home of the Ferrari, the Lamborghini, the Porsche and the Aston Martin.)

(more…)

Posted in Essays and Opinion, Transportation | Comments Off

A New Era for Automobile Efficiency?

Tuesday, May 19th, 2009

By David L. Brown

The government today announced new fuel economy and pollution standards for automobiles and light trucks. This is excellent if somewhat tardy news, but should be viewed with some reservations. Let’s take a look.

First, I note that according to this report on FoxNews.com, a “senior administration official said the changes (when compared to current pollution and vehicle use totals) will have the effect of removing 900 million metric tons of carbon dioxide from the air, taking 177 million cars off the road, and shutting down 194 coal-fired power plants.”

This sounds too good to be true, and usually when that is the case one should prepare to apply some common logic. Some of these claims are hard to pin down, but the “177 million cars” figure is something we can work with.

According to the Department of Transportation, there are presently about 250 million cars and light trucks in service in the U.S. The 177 million figure mentioned by the administration spokesperson is equal to about 70 percent of the total number of vehicles presently on the road. Thus, to achieve the stated goal would require the outright elimination of 70 percent of all present CO² emissions from cars and trucks. A very optimistic claim indeed.

Let us assume that the new standards ultimately yield new vehicles that produce 50 percent less CO² than the average present cars. That seems pretty generous, but let’s go with that figure. Let’s say we trash 177 million present vehicles and replace them with new, cleaner vehicles yielding 50 percent less CO². Well, even that won’t achieve the stated target, since the new vehicles will still be producing half the emissions of the older cars they replaced. We will have only done away with the pollution equivalent of 88.5 million vehicles.

Now one might argue that the 177 million vehicle figure must be based on replacing the present fleet with completely clean electric vehicles If that were the case (and ignoring the greenhouse gas emissions from power production with the further assumption that it would come from clean solar or wind, which raises still more questions), we would still need to completely eliminate the emissions from 177 million passenger vehicles. (In fact, according to the news report, the targets “will be achieved with only minor modifications to vehicle and engine design,” so a complete switch to electric isn’t what they have in mind.)

It appears that to even come close to achieving the claimed target we would need to completely replace our present fleet—and unless the new vehicles were 100 percent “clean,” that still wouldn’t do the job. With 250 million vehicles emitting one-half the present levels of greenhouse gas, it would have only have replaced the equivalent of the output of 125 million present cars, not 177. This just doesn’t add up unless we make the further assumption that the actual total number of vehicles is significantly reduced. Only then does it start to make sense.

Herbert Hoover ran on the slogan “A car in every garage and a chicken in every pot.” Now it seems the plan is to empty out at least some of those garages. Will chickens be next to go? Well, that’s a subject for another day.

Today’s announcement seems to hint that these marvelous improvements will take place by 2016, or certainly in such a near future as to make a big difference in our present situation vis a vis energy use and pollution. In fact, the changes would be significantly longer-term. At recent rates of auto sales, it would take more than 20 years to replace the present fleet. Since the projections seem to be based on the assumption that everything would remain the same except with better fuel efficiency and lower emissions, we must ask what changes might occur in our nation’s economic, ecological and social future that would make these assumptions invalid. I will leave that to you to ponder, perhaps keeping in mind the failure of Soviet Five Year Plans to ever work out as hoped. Has anyone even tried to project an economic plan 20 or 25 years into the future?

(more…)

Posted in Age of Oil, Energy Technology, Fossil Fuels, Pollution, Transportation | Comments Off

Riding the Petroleum See-Saw

Wednesday, December 10th, 2008

By David L. Brown

This is a followup to my recent essay “An Embarrassment of Oxymorons,” in which I made the point that going forward petroleum would either be priced higher, or would not be available at all. I explained that as an example of why it doesn’t make sense to hold onto past economic models beyond their use-by date.

Right now everyone is delirously happy that gas prices have fallen back to affordable levels. Everyone, that is, except the oil producers. There is no joy in the Land of OPEC. In fact, in oil producing nations economic disaster has resulted from plummeting oil prices.

The sad fact is that oil is no longer cheap to produce, and the economies of countries such as Saudi Arabia, Iran, Russia and Venezuela were riding high on expectations of petroleum prices well in excess of $100 a barrel. Now that those prices have dropped to about half that, those economies are crashing. In Russia, the stock market has dropped by 70 percent. In Dubai, until just weeks ago the shining example of Arab economic ascendancy, property values have plummeted by 80 percent. In Iran, civil unrest is spreading and the possibility of a second revolution is not unlikely.

Yes, it is a nice thing that gas prices are down around $1.60—but unfortunately we cannot expect them to stay there. What the roller coaster petroleum market of 2008 has demonstrated is that the world economy cannot support $100+ oil prices. Some analysts predict that prices will settle even lower, perhaps to $30 a barrel in the near future, and some radicals have even predicted oil prices in single digits.

That will not happen, and for a simple reason. Supply and demand is one factor in setting prices of commodities, but another thing that comes into play is the strike price between buyer and seller. Sellers will not for long sell at below their cost, for to do so means losses. When the demand of consumers is for a low price, and the cost of delivering that commodity is higher, perhaps far higher—the supply will simply dry up. The leverage of supply and demand hits a stop when prices are below production costs. (There is no such hard ceiling at the top end; a commodity will bring whatever consumers are willing to pay, although price resistance is an equally hard limiting factor.)

As I pointed out in the essay on oxymorons, oil producers are faced with a lose-lose situation. The more oil they produce at a loss, the more their economies suffer. If, on the other hand, they stop production altogether—their economies will also suffer. There is no wiggle-room for them.

Right now, they are desperate for all the revenues they can get, and thus continuing to pump oil. But this situation cannot continue, and the longer we enjoy low gas prices in the First World, the more the economies of oil producing nations will suffer. There will be serious declines in standards of living, possible famine. National treasuries will begin to be depleted to make up the shortfall in expected oil revenue.

(more…)

Posted in Age of Oil, Economics, Essays and Opinion, Fossil Fuels, Transportation | Comments Off

Detroit’s Fantastic Freestyle Failure Event

Sunday, December 7th, 2008

By David L. Brown

A few days ago I wrote an essay about the mess in Detroit. This cartoon says it pretty well in visual terms.

detroit.jpg

Yeah, they’ve got a plan. Now. It’s a sad situation, but it underlines the question with which I ended the previous essay. After I pointed out that the U.S. no longer makes televisions, computers, and most of the other “stuff” we buy and use, I asked: How is Detroit different?

Indeed, wouldn’t it make a lot more sense to concentrate on things we need to be doing (renewable, sustainable energy for example) and let the South Koreans and Chinese build our cars. They make great vehicles for far less than anything we can make here (and that includes the Toyota, Nissan and Honda U.S. plants).

Scroll back to read my earlier posting titled “Detroit’s Missed Opportunity—And a Plan.” And don’t miss the other essay posted here today. Titled “An Embarrassment of Oxymorons,” it demonstrates the error in trying to hold onto failed economic models. It’s like the difference between getting into the lifeboat or going down with the ship.

Posted in Economics, Satire, Irony, and Humor, Transportation | Comments Off

Detroit’s Missed Opportunity—And a Plan

Thursday, December 4th, 2008

By David L. Brown

The automobile industry is in full collapse mode, a situation that has been predicted for years. I am inclined to refer my readers to an essay I posted here more than two years ago, September 20, 2006, titled “An Open Letter to Ford’s New CEO.” I addressed it to Mr. Alan Mulally upon his acceptance of the post from his former job at Boeing.

In my open letter I reviewed the various factors of climate change and predicted future oil supplies, then told him:

The challenge to auto makers hinges on two crucial issues. First, the contribution of gasoline and diesel emissions to the atmosphere, and second the economic threat of future oil scarcity and skyrocketing prices.

In the light of these facts, for a company such as Ford to continue to conduct itself in the same manner as it has in the past would be a suicidal, lemming-like act of self destruction. The future is not going to be like the past, and those who hold to the old ways will be swept away before the tidal wave of environmental change that is looming over us today. Those that continue to run with the lemmings will sink beneath the waves of failure and corporate extinction.

Well, Ford and perhaps even more GM and Chrysler did not respond quickly enough, or in the proper ways and now that lemming rush leads from Detroit to Washington to …? Perhaps that ultimate Lemmingholm, the place where the souls of deceased Lemming warriors go.

I gave Mr. Mulally some suggestions, among which were:

  • To provide each U.S. state governor, Senator or national Representative a state-of-the-art hybrid vehicle to drive for one year, no strings attached.
  • To personally drive a hybrid instead of being chauffeured around in a limousine.
  • To create special incentives to Ford employees to own and drive hybrids.

Of course Mr. Mulally decided not to act on these suggestions, none of which would have cost Ford all that much. Instead, the company made no apparent effort to familiarize our political leaders with the coming generation of hybrid vehicles. Mr. Mulally flew to Washington in a private jet, and then returned driving a hybrid (as I suggested, but a bit late!) and failed to create a super incentive to push hybrid vehicles by making it a no-brainer for employees to drive them instead of pickups and SUVs.

If they had done as I suggested, well, who knows? There is no doubt that what Ford actually has done in the past two years has not led it to a favorable position.

I pointed out to Mr. Mulally that “Change from every side is bearing down on our planet like an avalanche, and there is no time to dither, no time for doubt. The world is changing, and if Ford is to have a role in the future it must not only demonstrate its ability to change with the times, but must become a leader in that effort.”

(more…)

Posted in Economics, Essays and Opinion, Transportation | Comments Off

Beginning of the End for Age of Oil

Thursday, October 23rd, 2008

By David L. Brown

We have always contended that higher oil prices would translate into faster movement toward alternatives that use less gasoline or diesel fuel. The latest financial results at Union Pacific Railroad provide one piece of evidence that that is happening:

Union Pacific Net Jumps 38% on Higher Freight Revenue

Union Pacific reported a 38% jump in profit in the third quarter, beating analysts’ expectations.

The railroad company weighed in with profits $703 million, or $1.38 a share — up from the $532 million it earned in the same quarter last year.  Analysts polled by Thomson Reuters had expected the company to earn $1.30 in the third quarter.

“Union Pacific achieved record quarterly financial results despite a challenging economic environment and record-high diesel fuel prices,” said Jim Young, Union Pacific chairman and CEO.

The company saw its average freight revenues jump by 16%, led by big gains in agriculture and energy shipping. Average revenue per car also soared 22%, with broad gains in all categories.

Union Pacific says it is optimistic about the fourth quarter, despite the effects of the economic slowdown.

And why does this show the effects of higher oil prices? Simply because rail freight is far more efficient than over-the-road trucking. A single freight train can carry as much as 100 to 200 tractor-trailers, each requiring a driver and sucking a gallon of diesel fuel for nearly every five miles traveled.

This is just one example of why the paradigm is changing. Demand for oil has dropped worldwide due to the economic situation, and it isn’t likely to come back very soon, even though lower demand has brought prices back to the $70 range at present. OPEC is quite irate, because they had already gotten used to the $135 per barrel prices and thought they would go on forever.

Unfortunately for OPEC (and I say that with ironic intent), the world economy cannot sustain high oil prices. So when the oil minister of Iran says, as he did a couple of days ago, that “the end of cheap oil is over,” he may be right in a way, but in fact that statement could be edited to read a bit differently.

Try this version: “The age of cheap oil is over.” That’s more like it, because this is the end of the era of oil. There isn’t enough to fully satisfy demand except at high prices, and those high prices are not sustainable. The world economy was built not just on a foundation of oil, but of cheap oil. If that is no longer available (which it isn’t) then the economy will have to go in a different direction. And so it is. The age of oil is not truly over, but we are seeing the beginning of the end and that movement will only continue now that the oil peak has been passed and petroleum prices have reached levels that are not feasible for the world economy as it has existed.

It is too bad that the first phase of this landmark change probably must be a serious recession and likely a depression that might last for years. In fact, it is quite possible that the world economy will never fully recover from its long addiction to cheap oil. Certainly there will be many challenges to overcome, but it is at least encouraging to see a move in the right direction as signaled by such things as the move from truck to rail freight.

We have discussed the problem of an auto industry that was hellbent to keep churning out SUVs and pickup trucks forever, thus ducking the CAFE standards with a wink-wink nod from the government that was supposed to enforce them. Detroit is almost certainly doomed, and that is okay because we have an absolute glut of cars in the US. We don’t need any more new ones, and particularly as those millions who are driving leased cars turn in the keys and add even more to the unsold inventory of perhaps several tens of millions of unsold new and used vehicles. Detroit and its dealers are practically giving the things away just to get rid of them, so there will be plenty of cheap autos and trucks around for some time to come, long enough for somebody (if not Detroit) to begin to provide affordable and sustainable alternative vehicles such as all-electric models.

Meanwhile, Americans are driving less and the poor folks at OPEC (irony again) will discover that even if they lower production now, it will only offset the declining demand. They will have a hard time pushing oil prices back up because it is no longer a positive demand market as it has been in the past. Oil even at $70 is too expensive not  to cause demand to continue to decline, and in fact OPEC will need to drop production merely to keep from flooding the market and causing even further price declines.

Higher production costs also create a floor beneath which oil prices cannot fall, since no one will produce oil at a loss. That has been the problem with remaining reserves here in the U.S., which could not be developed at a profit when oil prices remained low.

Even at present prices, oil is priced too high to sustain the old economic model. Thus, change is inevitable and it is beginning to happen. There is a lot of bad news loose in the world, but this is one glimmer of good news.

Posted in Age of Oil, Economics, Transportation | Comments Off

Too Little, Too Late for Auto Industry

Wednesday, September 10th, 2008

By David L. Brown

Here is an unusual opportunity to see a photograph that illustrates the maxim about “too little, too late.” It is a picture of the Chevrolet Volt all-electric car which is now under development and will be officially announced in about a week by General Motors.

volt.jpg

Well, why is this less than wonderful news? There’s nothing wrong with economical, electric powered cars, and I support them fully. But as I stated, Detroit is promising “too little,” and “too late.”

“Too late” because the time to have begun the transformation of our national fleet away from big-engined cars, SUVs and pickups was about 30 years ago. Back in the 1970s the handwriting was already on the wall, thanks to two oil shocks. The first, in 1973, resulted from President Nixon’s devaluation of the dollar and breaking the currency from the gold standard. OPEC responded by cutting supplies and creating a shortage that led to long lines at filling stations. That pushed oil prices up to compensate for the devalued dollar.

The second oil shock, in 1979, apparently resulted from no particular reason but panic that led buyers to rush to top off their tanks, thus creating a short-term supply problem, which led to more panic, rinse and repeat. That one didn’t last long, and I remember at that time taking a driving business trip from Chicago to as far East as New Hampshire without any problem finding fuel.

But the seed was planted and at that time people were aware of the need for more economical automobiles. Unfortunately, memory is short and history is long and the American love of “big iron” soon was in full bloom once more, with the enthusiastic backing of the auto makers. The oil shock of 1973 did result in Congressional action, to wit passage two years later of the legislation to create the CAFE (Corporate Average Fuel Economy) standards for fuel efficiency. That law set goals for auto makers to reach and maintain average fuel economy over the total number of autos they sold.

Unfortunately, Congress left a loophole in the CAFE program, a loophole that they left wide open and through which the automakers launched a three decade program of deceitful behavior. The “out” that Detroit exploited was that “light trucks” were waived from the CAFE standards. At that time, the term applied to pickups and slightly larger vehicles such as delivery vans and box trucks. It didn’t take Detroit long to “invent” the useless SUVs, which they claimed were “light trucks,” as well as to upgrade pickup trucks with comfortable seats, extended cabs, fancy accessories, and everything it took to entice people who had no practical use for a pickup truck to buy them by the millions just for basic transportation and to project a “macho” image.

All right, here we are in 2008, 35 years after the first oil shock, and we are just now, in the past few months, learning that we need to have a completely different kind of private automobile fleet. So, case made for “too late.” But there is one more point. GM vice chairman Bob Lutz has stated that no Volts will actually be delivered to dealers until November, 2009 and buyers will not get their hands on them until 2010. Full production will not be reached until later that year and will probably come with the 2011 model. Too late indeed, as GM runs through billions of dollars of capital trying to keep its sinking ship from diving to the bottom of the sea.

(more…)

Posted in Age of Oil, Economics, Energy Technology, Transportation | 1 Comment »

Decline and Fall of the General Motors Empire

Tuesday, July 15th, 2008

By David L. Brown

As I wrote just a few days ago (“Detroit — Death Throes of an Industry,” posted July 7), the entire American auto industry seems to be in a downward spiral from which there may be no return. But it is almost inconceivable how fast the bad news has been coming.

Things are unwinding particularly fast for General Motors, which has recently announced major plant closings and other draconian steps. And today they made further announcements that underline the very difficult situation they are in. They suspended their dividend, a wise move since they are reportedly bleeding a billion dollars a month and their stock is below $10 for the first time since 1954. They announced plans to lay off numbers of white collar workers. They announced further plans to sell off assets. And, they said they will even further reduce their manufacturing focus on pickup trucks, large cars, and SUVs.

I will take a closer look at these in a moment, but the news report I read had an interesting quote from the company’s CEO. He said something like, “no one could have seen this coming,” and then backed off slightly and stated that 99.999 percent of people would not have seen it coming. Let’s examine that statement with a little basic mathematics, nothing hard, just plain division.

According to the calculator built into my iPhone, and assuming that there are 300 million people in the United States, his admission that 0.001 percent of people would have suspected there might be trouble ahead for GM and other car companies means that a total of 300,000 Americans did foresee it. As one of those, I am glad to know that I am in good company with a fairly large number of individuals.

It wasn’t even something that was particularly hard to grasp, once you realized that the entire world infrastructure was built on the shifting sands of cheap oil, and recognized that there were limits to how much of the stuff could be pumped out of the ground. The facts were there, plain to see, and the conclusion that Peak Oil would pose a significant threat to the Detroit business model in particular was a straight forward one.

Now my question is, with one of the largest and richest companies in the world at stake, why wasn’t GM’s CEO or at least some of his advisors among those 300,000 individuals? Wasn’t it a pretty important thing to be aware of? Isn’t the price that GM is paying now so severe that almost any effort to accurately predict the future and make preparations would have been worth the cost?

Well, yes, but  the fact is that they and all the other major car makers in the world inexplicably did not believe warnings of the coming Oil Peak or understand that it was going to sweep away their business models like straws in the wind. That includes not only Ford and Chrysler, but also Toyota and Nissan which began building large pickup trucks and SUVs like there was no tomorrow.

Now to comment on the other factoids in GM’s announcement today. Factoid number one: The elimination of their dividend and a stock price that is in the toilet (it closed today at $9.84 but was as low as $8.81 during a chaotic trading day). This is extraordinary because of what GM shares are. They have been absolute icons of the investment world, one of the true blue chip stocks of history, a gold standard stock that millions of small investors have held for generations in the assurance that it would not only hold its value but would continue to generate dividends as regular as clockwork. That is what it was, and now it is, well, just another failed stock. The company’s investors have lost billions of dollars as what was a rock solid investment has turned into just so much wastepaper.

I cannot think of anything to compare with this meltdown. Enron was small potatoes compared with this. Only perhaps Edward Gibbon, the author of The Decline and Fall of the Roman Empire might be able to grok the magnitude of the ongoing collapse of General Motors. And remember that it took hundreds of years for Rome to collapse, while this company has slid over the brink toward what seems to be inevitable bankruptcy in a matter of months.

Factoid number two: Further layoffs of white collar workers (and the company has already eliminated tens of thousands of these jobs). Why only white collar workers, you may ask? Why quite simply because GM is held in a stranglehold by the unions, whose members it must pay whether they actually produce vehicles or simply stay at home watching Archie Bunker reruns and Wheel of Fortune (how about that Vanna White, eh?).

(more…)

Posted in Age of Oil, Transportation | 1 Comment »

« Older Entries