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The Economic Crisis as a Window of Opportunity
1 Dec, 2008 10:58 am
The twin pillars of climate change and peak oil has recently been joined into a troika of challenge, with the onset of the global economic crisis. However this unprecedented alliance of difficulties does not mean all hope is lost. During this challenging time, new ideas can be brought to the forefront, and practically implemented. President-elect Obama's recent infrastructure investment proposal, could potentially be the wedge to open the door for substantive change, in the way that we live our lives, conduct our commerce and travel in this new age.
What if the big three were considered transportation and energy companies, instead of being relegated to the rather narrow definition of automobile manufactures? With the enormous physical assets and locational infrastructure of these companies, they could easily be converted into manufacturers of light or heavy rail passenger cars and locomotives.
During the past several decades, the United States has lost nearly all of it's domestic railroad car and locomotive manufacturing companies, including the Budd Company, the St. Louis Car Company, and even GM's own Electro-Motive Division (EMD), that manufactured diesel locomotives. This division was sold to a Canadian company. These and many other rail car and locomotive manufactures and their superb products, were once considered the envy of the world.
Although some people are currently being lulled into complacency, by the “temporary” low per barrel price of oil (just under $50.00 per barrel at the time of this writing as opposed to $140.00 per barrel last summer). The price of oil will resume it's upward trajectory, soon after current contract hedging abates. During this lull in high oil prices, we can begin a major conversion of our automobile manufacturers into public transportation manufacturers.
After all is their any written law that dictates that the only legitimate form of transportation is the private automobile? What will happen, sometime down the road, when perhaps a renewed upward price spiral in oil prices places the automobile out of the price range of all but the wealthiest individuals. Some people will respond, "well we'll just utilize biodiesel or some other alternate form of energy for automobiles". Without even investigating this unproven possibility, why not consider transportation in a broader context, one that is not only tethered to “moving people from point A to point B", but in a much broader context that takes into serious consideration the important role of land use in transportation and energy expenditure.
Assuming that the price of oil, will eventually renew it's steep ascent, certain land-use informed considerations seem appropriate. During this current sever real-estate downturn, here in the northeastern US, there is more than anecdotal evidence to suggest that cities and older suburbs that are located in close proximity to public transportation networks, are not suffering nearly as badly as exurban locations that were built-up during the heyday of cheap oil and easy motoring. It seems that the age of exit-ramp driven real-estate development is coming to an end.
A dual public-policy driven strategy that saves the "Big Three" for public transportation based initiatives, that is tethered to a more broad-based revitalization of transit on under-utilized or semi-abandoned railroad beds, could provide a sensible template as a contributing cornerstone to economic recovery that is both community based and largely immune to outsourcing.
Additionally, as many outlying exurban cheap-oil enclaves are abandoned, more dynamic and vital town centers can be encouraged to flourish in many older cities and suburbs. Again, here in the northeastern US, there are numerous older small and medium sized cities, that once contained vital manufacturing sectors, until the 1960s and 1970s. These partially depopulated centers, already contain a critical mass of under-utilized infrastructure, that includes water and sewer lines, as well as aging housing stock.
Reverting to the beginning of this article, in regards to preserving the "Big Three" automobile manufacturers, and converting them into "public" versus "private" transportation equipment manufacturers; it is time that we here in the US, honor the legacy of what we already have and discontinue a "slash and burn policy" that permits economic dislocation and community dissolution. Historian Frederick Turner, announced "the closing of the American frontier" in 1896. However, at that exact moment, the primacy of cheap oil was just beginning. That primacy permitted a wasteful approach to community development---an extended frontier of sorts. Frederick Turner was premature--but correct nonetheless. Perhaps, the frontier of wasteful, profligate consumerism, will yield to a "teachable moment" of thoughtful frontierism.
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Final note, EMD subcontracts alot of it's locomotive production out. The plant in London is pushing very hard to produce more then 300 locomotives a year out the door. So the company has lined up production facilites in Altoona, Pa., New York, Mexico, Spain and soon to be building their large locomotive order for the Chinese in China.
I hope this helps you. Thank you again
EMD was sold in 2005 by GM to Greenbriar Equity Group and Berkshire Partners, not Berkshire-Hathaway.
For EMD, production runs in both the U.S. and Canada. The La Grange, IL facility produces engines, turbochargers, alternators, and electrical lockers. London, Ontario produces traction motors and does final assembly. Lots of rebuilding is performed in La Grange as well. EMD also designs, manufactures, and sells engines for marine applications, gen sets (engine/generator sets) for both land based and off-shore drilling rigs. They also offer gen sets that provide back-up power for places like Sears Tower in Chicago.
The Locomotive Industry is a green industry in that a diesel-electric locomotive is four times more fuel efficient than a truck and produces one-third of the greenhouse gas emissions for every ton-mile that is moved.
I hope this clears up a few misperceptions.