Last quarter, GM lost about $39 billion. It wouldn't take too many quarters like that before I was forced to borrow money from friends. Ford, too, is struggling, having narrowed their losses for the most recent quarter to just $380 million - beating analysts' expectations. While that might be only 1% of GM's loss, it still seems like a big number to me.
One reason that oil is difficult to replace is that if it were suddenly rendered obsolete, about $7 trillion in wealth - as yet untapped oil reserves - would suddenly be worthless. The folks who sit atop this vast wealth aren't particularly inclined to see that happen.
So, what vested interests have an interest in rendering oil obsolete? Why not auto makers?
One of the ways that Intel and Microsoft and Seagate (and others) have fed each other's success is by co-evolving. More storage or computing power allows for more sophisticated software (bloatware, to its critics). More sophisticated software requires more storage space and computing power. If you have a ten year old car, you can go pretty much wherever a brand new car can go. If you have a ten year old computer, you find large swaths of computer land are off limits for you. Whether it is planned or simply serendipitous, this rapid evolution of technology has helped computer sales. Today, even our phones rapidly become obsolete.
TV manufacturers have learned a lesson from this. In February of 2009, all analog broadcasting will stop and viewers will be forced to upgrade to High Definition - an act sure to stimulate hardware sales.
It seems to me that auto makers would want to take a similar approach with their cars. Imagine if they were to design cars that depended on something other than oil. Something that polluted less, or ran on cheaper fuel, or needed fueling less often - all of these options could help to stimulate sales. We so often talk and write about how positive might be the effects on our environment and our continued funding of extremism if we broke our oil addiction. But just imagine what this could mean for the auto industry.