Auto Bailout Consequences

I am a concerned citizen and technology entrepreneur writing to you as an auto industry bailout is considered. I want to share insights gained by being part of small technology companies competing against established market leaders. My experience has been in the aerospace and software markets so I have no direct interest in the automotive industry.

Any established technology has a large advantage over emerging technologies. Existing technologies have an established track record with customers, efficiencies of scale and basic market / mind share. If current auto manufacturers receive financial assistance in this tight credit market it will increase these already high barrier to new technologies.

As with any technology there are always small companies trying to evolve or revolutionize the industry. Here are three examples in the auto industry:

1. Fiberforge, a company creating thermoplastic composites that are stronger and lighter then steel. And could be used to improve fuel efficiency and even reduce manufacturing costs. Based in Glenwood Springs, Colorado

2. Aptera, a company that has built a hybrid 3 seat vehicle capable of 230 mpg, as a diesel pluggable hybrid or act as a 100% electric vehicle. Based in Carlsbad, California

3. Tesla Motors, a bay area company selling an all-electric sports car. They have also designed a sedan that would extend the practicality of an all-electric vehicle to many more buyers. Based in San Carlos, California.

If these or other companies succeed they will build an industry of parts manufacturers and support industries. More importantly if companies like this do not succeed it won’t stop innovation from happening. The next generation of vehicle technologies will occur, but it will occur elsewhere in the world.

If today’s auto companies are “bailed out” with no consideration for tomorrow’s auto technology companies we’ll put ourselves behind in the long term. That does not mean supporting the current industry is wrong. But, if we do it is in our best interest to provide substantive support to emerging companies in the market as well.


A Madman has spoken…

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