Facts
- Unemployment in the US hit 7.2% in December, the highest in 16 years.
- During the first half of 2008, as gas prices breached $4 per gallon, MBTA ridership increased over 6 percent compared to the same period in 2007. The latest MBTA figures indicate that in November, even as gas prices have dropped by 50%, Commuter Rail ridership was at its highest level in its 44-year history.
- In 2005, 81% of the US population resided in cities and suburbs (49% worldwide).
- By 2030, 60% of the world population will live in cities.
Analysis
- Consumers will be focused on capital preservation.
- Transportation habits are changing. Car per household demand will fall.
- Desire and need to own an automobile will decline. Seen as Luxury vs. Necessity.
- Increasing demand for mass / public transportation.
So, What Should General Motors Do (W.S.G.M.D)
- Create a subsidiary, General Motors Transportation Systems (GMTS), to create and license vehicles and systems based around the Volt platform (at $40k M.S.R.P., who can afford to buy one)
- Enter a Joint Venture agreement with ZipCar to supply new public transportation systems based on a point-to-point micro-rental model (see Public Bike System for an example).
- Convince the local and federal governments to create and fund the public works projects to implement the system under their existing Mass Transit Authorities. (These new projects can employ the workers laid off from obsolete model plant closings)
I’m certain that there are long lists of pros and cons that need serious consideration. However, borrowing public funds based on a survival strategy until 2010, when sales are “expected” to rebound and savings from a 2007 UAW labor agreement kick in, is not a strategy at all. In fact, it appears somewhat naive and irresponsible.
