Mike Dukakis and Michael Moore both think GM should get into the rail business, a line of argument to which I’ve been sympathetic. Martin says it probably won’t work, and I think he’s probably right.
Building a efficient railcars means competing against manufacturers that have decades of experience, not to mention miles and miles of testing facilities. It’’s a much more specialized field than it was, say, 30 years ago.
By the same token, one has to wonder why we need a domestic auto industry. Historically it was important so that we could re-tool the factories to build tanks and planes in the event of war. Is that even possible today? How many years would it take to re-tool an F-150 factory to start churning out F-35s, given the specialized computer systems and hardware found on each?
Photo of Japan Railway’s maglev test track via Wikipedia
It’s not so tough to catch up an industry to competitive standards – it just takes money. Just poach engineers from other countries. After all, we did it in WWII developing the H-bomb, and afterward developing rockets.
Up until a few years ago, GM was in the rail business, at least building one component, the Locomotive. In fact, I think SOUNDER and Amtrak Cascades F59PHIs might be some of the last passenger locomotives at least built at La Grange, Illinois by GM before they shifted most EMD production to London, Ontario.
That should be enough to tell you what a bad idea it would be for the US Government to enter the passenger rail business using a tarnished automobile company as a starting point. Buy out the Canadians in a deal that includes Bombardier restoring north American manufacturing in a US facility.
It’s plausible the tax payers might be fully reimbursed for the GM bailout (it’s happened before). All that GM has to do is be better than VW and the market capitalization would pay off the debt. That’s not an easy task but it will be impossible if the company loses focus on things like HSR, windmills, solar panels, etc.
Cars represent one of the largest environmental impacts on the planet. There is far more that can be done in this arena over the next decade than would result from any HSR initiative. For GM to be at the center of this the company needs to focus it’s energy on capital on that mission and that mission alone.