US automakers are in serious trouble. Hidden in the news over the past few weeks was a $25 billion loan to automakers to help them through tough times. That's $25 billion we're not going to get back. However, there are ways to make wise investments in the auto industry and improve our overall transportation system. There is no doubt that health care and pension commitments are problematic for car companies. Once Barack Obama had a great idea to trade a government takeover of some of the health care commitments in exchange for more efficient vehicles.
That would be a start, as Detroit seems frankly unwilling to put serious effort into increasing the efficiency of their fleets. The Chevy Volt will probably fail in what will be a crowded marketplace of hybrids by the time it is released. It will cost approximately twice as much as a Prius or new Honda Insight for a car that looks like a low end Chevy, and since the technology was rushed I expect reliability problems. Detroit is maddeningly determined not to bring their high quality and efficient cars they build and sell in Europe to the US, as well. It seems that GM could bring an Opel or two and Ford could bring their Mondeo and suddenly they have nice cars to sell.
But let's assume the US auto industry is in permanent decline. If this is the case, future transportation investments that do not favor the car will have minimal adverse effects on the industry, meaning the lobbying efforts to maintain automobile hegemony should fall on deaf ears. If we don't have an auto industry to protect and support, then we should dramatically shift our limited resources away from building public infrastructure that favors cars over all else.
This argument is simply that if auto manufacturing is no longer a dominant employment or political force we we should reprioritize our transportation policies and move towards a transport system that is more efficient, less energy intensive and helps ensure rights to mobility. There will still be plenty of companies making and selling cars. They just won't be American companies.