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Khosla: Don't Save the Dinosaurs

Well-known greentech VC Vinod Khosla has an opinion piece in a national news mag today...and it calls for letting Detroit's auto dinosaurs wander around among the financial ferns until they die, or evolve into more agile creatures.
Written by Harry Fuller, Contributor on

Well-known greentech VC Vinod Khosla has an opinion piece in a national news mag today...and it calls for letting Detroit's auto dinosaurs wander around among the financial ferns until they die, or evolve into more agile creatures. Khosla's argument is cogent and backed by much of recent tech history. Old companies don't innovate, they just keep doing what they've always done. This ignores the work done by non-American companies in building clean diesel or hybrid cars. But Khosla is arguing for major tech revolution in transport and energy. Something like what desktops and then the Internet did to business and communications. What airplanes and satellites did to travel and globalization of many facets of life. Can we still recall profitable newspapers? Mainframes and typewriters, carbon paper and film cameras? Was there any point in trying to save those industries when they were passed by better tech? So, too, argues Khosla, it's time to let the lovers of the internal combustion engine meet their destiny. Time for "technology shock," he says.

It's easy to be cyncial and say Khosla has an ax to grind. There's a long list of the greentech start-ups supported by Khosla Ventures. Go to their website and click on reneweable resources for their PPT show. On the other hand, if he thought there was any hope for any of the Detroit Shrinking Three automakers, he and I together could easily buy a controlling share right now. It is worth noting that NOBODY on this planet has offered to buy any of the 3 Detroit-based companies. In fact, Chrysler was briefly swallowed by Daimler and then spit out.

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MEANWHILE IN D.C.

Today the House Committee is grilling the Gang of Three, now representing what we must denote as the "Shrinking Three" American automakers. In testimony the GM chief said it would be eight years or more before plug-in electric cars would be price competitive with gas burners. The Chevy Volt is due out in late 2010.

While the CEO is in Washington, General Motors announced more cutbacks at four auto plants. One each in Kansas, Ohio, Michigan and Ontario. Sayonara to 2,000 more workers. Any kind of federal loan would not prevent the invevitable shrinkage of work force and production by the U.S. automakers. It could elongate the adjustment period before some kind of stasis is reached. Would it be so bad if we copied Cuba and just kept our old clunkers clunking along? Maybe built a little more public transit?

Possible sign of future events: Chrysler has hired a bankruptcy law firm. Intent or just a public attempt to leverage Congress? Both Chrysler and the much larger GM have said they need capital before the end of the year. Or else.

Trying to combat low public support for the automakers' bail-out request the Detroiters have turned to the Internet to plead their case. From Facebook to Twitter, they car guys are making digital appeals.

IS THIS GOOD NEWS?

Honda has killed its Formula One racing team. Could this be a future trend? Would we really stop running huge, wasteful, loud cars around in circles for vicarious danger and to increase greenhouse gases? We could replace it with chariot races, each chariot pulled by former Detroit auto desingers. Think of the fun watching those collisions. Just kidding.

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