
Instead of funding Ford, the US should incentivize manufacturing like the X PRIZE encourages innovation. Santa Fe should do the same.
In September of 2006, Bill Ford, the grandson of auto pioneer Henry Ford, resigned from his position as CEO of Ford Motor Company. His mistake was trying to do the right thing.
In an attempt to revive his grandfather’s flagging legacy, Ford had earlier proposed moving away from the big-truck/gas-guzzling-SUV strategy to an entirely new direction. He was young and ambitious, and wanted the country’s largest automaker (at the time) to take the lead in producing energy-efficient and hybrid cars. The idealistic Ford was outgunned by a board of directors who basically mocked him for his stupidity.
Nothing changed and soon the bewildered heir resigned amid record profit losses, huge job cuts and collateralized factories, while Toyota sailed by on Prius power.
Alan Mulally was brought in as CEO. He had muscled Boeing out of financial trouble in a way that American corporate boards could understand (Boeing this past month went through a bitter eight-week long strike in the shadow of the presidential election—business as usual). That business-as-usual approach is part of the corporate disdain for the public and for sustainable culture on which the economy has finally run aground.
Boeing shares are now nearing the desperate level they were at when Mulally rescued the company, and his plan to lead Ford to profit by 2009, well, ahem. Ford is now teamed up with Chrysler and GM, and begging the federal government for bailout money—pleading with Nancy Pelosi for bailout money, a creepy prospect.
Bill Ford must lie awake at night like a haunted man, dreaming of how it could all have gone a different way if he hadn’t let a bunch of gruff suits shove aside his dream for the family company.
The question is whether any of us are going to learn a substantive lesson from the sad story of Ford. The company had someone at the helm with the vision to lead it in the right direction at the right time and ignored it. Now, like the other corporate pirates who have collected their government payday, the Ford board and its ilk want theirs. The media buzz implies that, despite vast resentment on the part of citizens, American automakers are likely to get the bailout they’re after: $25 billion on top of another $25 billion recently given out to encourage—what else?—energy-efficient cars.
The old-guard auto-aristocracy is arguing that if the companies collapse, it won’t just be factory closures and their own manufacturing job losses, but auto dealerships, parts manufacturers and distributors. More than 60 percent of drivers who own American-made cars supported John McCain for president, so we can see there’s a vicious-cycle crowd that isn’t getting the “mandate for change” the rest of the world is clued in to, but that doesn’t mean we have to put up with it.
Let’s just think about $25 billion for a moment. It is less money than the government would lose on taxes if, in the worst-case scenario, three million jobs were cut by the big three American automakers and related industries (assuming those three million found no other work), but it’s still a nice little bundle. And there is very little evidence that it’s enough to get the automakers out of their hole. But what if, taking a cue from the X PRIZE Foundation, the federal government dangled that $25 billion out there for anybody with a better idea about creating jobs?
Rather than burning billions in an attempt to stave off the loss of jobs that may well evaporate anyway, the money could be put into proactive incentives for industries that are ready to be the foundation of a new economy—alternative energy, new-paradigm vehicle manufacturers and bold, new infrastructure initiatives.
“Appeaser” is a term that’s often been used as a foreign-policy insult, but this generation’s appeasers are those who continue to fuel wasted systems. It is incentivizing change and transformation, rather than placating the status quo, that can lead this country toward a truly sound economy.
In defense of the hiring freeze proposed recently at Santa Fe City Council and discussed in
, Councilor Matthew Ortiz, the resolution’s sponsor, says, “I think that all options need to be considered, not just the popular ones or the ones that city employees can stomach.”
Ortiz is quite right that the city needs to make some hard decisions about where to cut costs. Santa Fe is going to feel the economic crunch, significantly more than it already has, in the near future. Like the nation, which must now wade through the messy business of enacting change rather than simply “believing” in it, Santa Fe must meet this challenge with proactive assertion of its values and adaptability.
We know that, for now, we can’t count on the tourism, gross receipts tax and fees that have traditionally bolstered the budget. Those things will likely return, but the question is what is Santa Fe’s metaphorical $25 billion—what X PRIZE can we offer to stimulate those with new ideas about how to structure our local government and economy?