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Lessons from GM’s Bankruptcy on the Consequences of a Fly-Drive Transportation System
Thursday, June 04, 2009
For decades, NARP has argued that America’s “fly-drive” system, that is, a transportation system over-reliant on highways and aviation and neglecting trains, was bad policy. We focused heavily on the importance of giving citizens more choices, on environmental impact and—as the opportunity opened—on energy supply issues. We also argued that highways and aviation enjoyed significant public subsidies even as many politicians kept telling themselves and the public that such subsidies did not exist, mistakenly believing that user-funded trust funds completely supported those systems. The fly-drive mentality also contributed to the nation’s overall economic problems, to the extent that the housing bubble encouraged construction and purchase of exurban homes in pedestrian-unfriendly surroundings—actions that would not have taken place if people had known where the price of oil was headed. Finally, we said one of the biggest subsidies in transportation was from airline shareholders to passengers enjoying cheap, non-compensatory fares.
Now, the stories of General Motors and Chrysler have made clear fly-drive’s financial unsustainability. Government subsidies and loans to GM and Chrysler now total over $50 billion, including loans which GM and Chrysler may not repay, and the forms government aid has taken have been varied.
Even today, some still say NARP should apologize for the fact that Amtrak requires government funding. Would airlines be profitable if governments did not maintain airports and air-traffic-control systems? Would bus companies be profitable and driving be affordable if government did not maintain the roads? Would the making of the very vehicles that carry the bulk of American travelers have been profitable without repeated help from Uncle Sam? The transportation system upon which our economy is built requires public funding and is one of the best investments we make as a society. The impact of these investments would be maximized if we had a proper balance between the modes to achieve the most efficient outcomes.
The billions that the government is ready to spend to bail out bankrupt GM are only the latest in a series of large public subsidies to automakers. GM has already received $13.4 billion in taxpayer funds, with Chrysler getting another $4 billion, and both companies’ suppliers got a total of $5 billion. The government guarantees manufacturers’ warranties for GM & Chrysler cars, and the Recovery Act provided a tax credit of $49,500 to consumers who purchase new autos. Furthermore, the climate change bill recently passed by the House Energy & Commerce Committee includes a “cash for clunkers” program, which offers tax credits encouraging drivers to trade in existing cars for more fuel-efficient models. This latter program—which, though sold as promoting energy efficiency, does not take into account the energy costs associated with prematurely scrapping useful cars—has been described as a subsidy to manufacturers, their workers and car buyers.
Some incentives for the production and consumption of more fuel-efficient vehicles are necessary to address our energy problems as long as most Americans continue to live in communities planned in such a way as to make driving a virtual necessity. It is also important for the government to help struggling communities that are dependent on auto manufacturing to get back on their feet. But we need strong efforts to minimize the worsening consequences of increased congestion and urban sprawl. More attention should be paid to the goals set forth in S. 1036, the Federal Surface Transportation Policy and Planning Act of 2009—increased use of freight and passenger trains and mass transit and reduced, and reductions in national per capita motor vehicle miles traveled on an annual basis, in national motor vehicle-related fatalities (50 percent by 2030), in national surface transportation-generated carbon dioxide levels (40 percent by 2030) and in national surface transportation delays per capita.
We need a stronger focus on investing in the infrastructure that support those goals and would give Americans more travel choices. Many forward-thinking commentators have envisioned Midwestern factories retooled to produce wind turbines and solar panels. To that list we should add locomotives, railcars, light-rail vehicles, streetcars, subways, and other rail infrastructure. Surely federal investments to correct transportation priorities are at least as worthy as efforts to maintain specific automobile companies. The “priority-correction efforts” would support more quickly achieving President Obama’s vision of an enhanced role for trains in our mobility network. Such spending would yield dividends for years to come, perpetually benefiting people, our economy, and the environment.
—Ross B. Capon and Malcolm Kenton
Posted by NARP
Tags: auto industry, bankruptcy, chrysler, congress, detroit, energy, gm, highways, mobility, oil, transportation,Flag Stops: Signs of Change
Tuesday, June 09, 2009
Highway Trust Fund woes, models for industry nationalization, lessons from Europe, and more in this week’s roundup of rail-related reports and ruminations.
—Malcolm Kenton
Posted by NARP
Tags: auto industry, europe, green, highways, mobility, nationalization, rail, taxes, transit, transportation, urban development,Counting Our Blessings
Tuesday, June 23, 2009
Thoughts in light of yesterday’s Washington Metrorail disaster.
Our thoughts are with the families of those who lost their lives and those who were injured in yesterday’s horrific Metrorail crash in Washington, DC. We are also keeping in mind the Metro employees who received a shocking reminder of just how important their jobs are and the awesome responsibility that is in their hands. That yesterday marked only the second train accident causing passenger fatalities in Metrorail’s 32-year history should remind the traveling public how safe mass trasit is. The National Transportation Safety Board has begun its investigation into the exact cause of the tragedy and, as with all such incidents, what we learn from their findings will make Metro and other transit systems even safer in the future.
My experience getting home from NARP’s Washington office yesterday, while harrowing, made me count my blessings. My plan was to take the 5:35 PM MARC Brunswick Line commuter train from Union Station. After almost half an hour waiting at the station hearing only that the track ahead was blocked, I learned via my mobile phone of the accident and determined that my train was not going to depart. I informed my fellow passengers and proceeded to find other means of transport. It took me two and a half hours, two bus rides and a lift from a kind stranger, but I made it home. Had I decided to leave only 15 minutes earlier, though, it could have been a lot worse, and I was lucky to be alive and unharmed.
Yesterday, I saw firsthand just how much a large city relies on its transit network. With a key segment of Metrorail and commuter service out of commission, the number of people forced into buses, cars and taxis, created huge traffic jams. If Metro’s trains and buses did not exist, there is no way the city of Washington would be able to function as it does. The subway network has only been around for three decades, but it literally consitutes the arteries that keep the city’s lifeblood flowing. When one of those arteries gets clogged or fails, the entire body is thrown into disarray.
This should serve a reminder of how indespensible our work is at NARP and throughout the rail and transit industries. We must continue our work to make trains—intercity, commuter and metro—a reliable, convenient, comfortable, and above all, safe travel method available to all Americans.
—Malcolm Kenton
Posted by NARP
Tags: commuting, disaster, metro, mobility, railroad, safety, tragedy, transit,©2009 National Association of Railroad Passengers | » NARP website
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