With the economic cancer quickly moving from homes to cars, the firsttest of what our new President really means by "hope" will bedetermined by how he responds to the crisis in Detroit. Electric andhybrid cars are certainly part of the answer but improved enginetechnology is just the tip of the iceberg. With GM stealing from theit's employee pension plan last week to make debt payments on itsheadquarters building, no smart car is going to save them now.

Theauto industry in America is a dinosaur propped up by governmentinvention. The 1979 bailout of Chrysler, the same one that made LeeIacocca a household word, hurt our country because it prolonged theagony. Those chickens are now coming home to roost. Nothing less than a21st century approach to car manufacturing can save the auto industry,save our economy, save our environment, and free us from the dependenceon foreign oil which has led us, at least in part, into two wars in theMiddle East.

· If you took all the cars produced in Americabuilt but not sold, what economists would call the "structuralinventory" of our current system, those cars would fill a parking lotthe size of the state of Rhode Island. Michael Dell perfected aflexible system of manufacturing called "Just-In-Time," which means youonly build what a customer has already purchased. This is harder to dowith a product as complex as a car, but it most certainly can be doneif we are willing to go smaller micro-factories that produce cars in aflexible manner.

· The Rocky Mountain Institute has provenbeyond a shadow of a doubt that the safest cars are the biggest andlightest ones. Heavy cars only help in head-on-head collisions, whichare a tiny fraction of highway fatalities. If you hit another car on anangle or if you hit a tree, you want a car that bounces. What is mostimportant is size, since the critical factor in highway safety is theamount of time your brain has to decelerate. The fact that lighter carsare safer is hugely positive news from an environmental standpointsince lighter cars are, by definition, more fuel-efficient.


·Detroit is addicted to producing steel cars. Each plant costs $1.5billion and is locked into place by the powerful steel worker's union,which obviously supported our new President. To build light cars, wehave to move away from steel frames and towards existing plastic andcarbon-fiber technologies. This will require facing down the unions andshutting down large numbers of antiquated plants. But the goal has tobe sustainable jobs, not steelworker jobs at any costs. Those outdatedplants are at the very heart of the problem we have to face squarely.

·It currently takes Detroit over five years to design a new model. Fiveyears ago everyone was rich and gas was cheap. So huge plants wereerected to build gas guzzling SUVs and trucks. Last week Fordintroduced its newest automobile, the 150 pick-up, to great fanfare.The thing gets 15 miles to the gallon. Flexible manufacturing requiresthat model design occur in real time. Think about the differencebetween the cycle time from Steve Jobs to put out a new iPhone and forDetroit to put out a new car. Micro factories producing plastic carswould eliminate the retooling of massive steel plants. Stringentcrash-test guidelines are another obstacle. But in the end it willrequire a different intellectual approach to the design problem.

·There is no reason that 100% of plastic or carbon-fiber cars can't berecycled just like the ink cartridge for your printer. Battery poweredcars are great, but has anyone thought about what we are going to dowith all those batteries at end of life? Batteries generally get thrownout and are one of the worse kinds of trash. Our new auto industry hasto be designed so that we invest the earth's physical assets once tobuild the new fleet of cars and that plastic gets melted down andreused over and over again.


A government solution to theauto industry crisis that maintains the status quo will jeopardizenothing less than our national security and our fragile worldenvironment. Placating the CEOs who got us into this mess or the unionswho have fought tooth and nail to maintain the current system will notsolve our economic plight. There is both huge risk and huge opportunityin Detroit. It's our President's chance to show the world why weelected him. But to do so he has to completely change the auto industryparadigm, setting our sight firmly on the future rather than graspingat the few remaining straws of the past.