Thursday, August 30, 2012

Guest Column: Augusta -- the Next Detroit?

Thursday, August 30, 2012
Augusta, GA
By Bob Munger

In 1901 Ransom Olds created the world’s first auto assembly line in Detroit. By 1902, they'd built 425 Olds Curbed Dash vehicles. The 4.5HP internal combustion “horseless carriages” sold for $650, which is equivalent to roughly $18,000 in today’s dollars.

In 1903, Detroit’s Henry Ford launched the Ford Motor Company, soon to be followed by other auto pioneers like William Durant, the Dodge Brothers and Walter Chrysler.  

The Model T, introduced in 1908, was Ford’s homerun, and revolutionized the American transportation system. Mass production brought the price of the 20 HP “Tin Lizzy” down to $575 by 1912, equivalent to $13,500 in today’s dollars. In 1914, 300,000 Model T’s were produced.  By 1920 production had skyrocketed and the cost had dropped to $350, roughly $4000 in today’s dollars.

This is the real story behind the widespread adoption of the automobile in Twentieth Century American society. Yet today, a new, entry-level compact car would likely cost 4 or 5 times as much. At a time of economic crisis, even a used one in good condition would cost twice as much as the Model T did in its heyday.

Today, Detroit is not even a shadow of its former glory. Huge sections of its downtown lie vacant and in ruin. Dozens of former auto plants have long been shuttered, and tens of millions of Americans can no longer afford their products. Both Chrysler and GM have been rescued from bankruptcy by Uncle Sam. To add insult to injury, the American public is becoming increasingly hostile towards the negative impacts of autos, including air pollution, suburban sprawl, global warming and hollowed-out downtowns.

This view is especially true of the younger generation. “A car is a symbol of freedom,” said Alexander Edwards, president of the automotive division of Strategic Vision Inc., a San Diego-based consumer-research firm. “But unlike previous years, there are many different ways that a Gen Y person can capture that freedom.” Ways like computers, smartphones and I-pads. 

At stake is whether the current, modest recovery in vehicle sales is restrained by Gen Y. U.S. sales of cars and light trucks rose 14 percent to 8.43 million in the first seven months of 2012 and are on pace to total more than 14 million for 2012. That would be the best year since 2007. Yet that lags the annual average of 16.8 million from 2000 through 2007. 

A combination of lower wages for the youngest workers and the generation’s tendency to favor gadgets over cars may cap average U.S. auto sales at about 15 million annually, according to Dan Luria, a labor economist at Michigan Manufacturing Technology Center in Plymouth, Michigan. 

This anti-auto trend is reinforced by the Gen Y preference for living in urban environments. The new live/work/play paradigm is not limited to Gen Y, either. Empty nesters are also kicking the tires, and more are buying into this new lifestyle

Turning back to Augusta, what do we have in common with Detroit, other than a dilapidated  waterfront and downtown? 

Maybe quite a bit, if you think about our low speed electric vehicle industry, in terms of the early Twentieth Century auto industry of Detroit. Low speed electric vehicles (LSEV) are now produced and sold at price points which rival that of Henry Ford’s Model T, as it began to hit its mass production stride.  

Of course, nobody should confuse them with luxurious highway-rated vehicles, but millions of Americans who live in these live/work/play environments should be asking themselves: “Are highway-type vehicles like strolling across the street in Alpine hiking boots?  Why bother with the expense, when flip flops work just fine?  Why not rent your highway car only when really needed?

The fact is that low speed electric vehicles look even better than conventional, internal combustion cars when you consider the following:

1. Costs to buy LSEV’s are a faction of typical cars.
2. Costs to refuel are a fraction of typical cars.
3. Costs to insure and finance are a fraction of typical cars.
4. Costs to maintain are less than typical cars.
5. At least 80% of every dollar you spend on gasoline not only leaves your pocket, but also leaves your               community.

Add them all together and you’re looking at thousands of dollars saved each year. Multiply that by a few hundred vehicles and the community economic benefit is in the millions of dollars --- millions of dollars in an era when money is hard to find, and debt loads are crushing. 

Finally, there are the environmental and health costs, which don’t usually factor into the equation, but should. Internal combustion automobiles pollute our air, causing respiratory-related healthcare costs (including missed work and school). They also release greenhouse gasses which contribute to global warming, at the rate of 19 pounds of carbon dioxide per each gallon of gas burned.

We at the Augusta Greenway Alliance, a 501(c)3 nonprofit corporation, seek to foster a vision of a smarter way to live and travel, by working with government and industry to make Augusta a model city for sustainable transportation, featuring our own low speed electric vehicles.

The final benefit for Augusta is a big one that we should all appreciate: More jobs for our local industry.**
Bob Munger*
                     *Munger is President, Augusta Greenway Alliance, Inc.

No comments: