CSpec

The automotive industry in developing countries VOX The 2008 and 2009 recession started in the US, but due to a globalised financial sector and strong international trade linkages, its effects were felt around the world. Of particular importance for developing countries was the impact on global value chains. Reduced demand in the US and Europe directly affected developing economies due to the important production steps that are located there. In addition, Yi (2009) and Bems et al. (2009) argue and provide evidence that vertical linkages over distinct production steps amplified the trade shocks. The financial crisis forced Western governments to intervene massively in the financial sector. While the form of intervention was widely debated and often criticised, few argued with the necessity. More controversially, governments also propped up manufacturing firms in several sectors to avoid large-scale bankruptcies in the midst of the recession. The recent book by Evenett, Hoekman, and Cattaneo (2009) contains case studies for agriculture, textile and apparel, services, and most notoriously, the automotive industry. A cyclical industry even in normal times, many automotive firms had to be showered with cash infusions, subsidies, and cheap credit to make them survive a total collapse in demand (Sturgeon and Van Biesebroeck 2009). Foreign direct investment in developing countries by large multinational firms had accelerated dramatically since the late 1980s in a range of industries. At first these investments were mainly for export back to the developed world, but more recently the focus has shifted to burgeoning local markets as well. A common view of global value chains of this sort is that innovation and design functions – the higher value added activities in the chain – can remain in industrial countries while production migrates to the developing world. In this “win-win” scenario firms in developing countries can upgrade their capabilities by participating in global value chains while knowledge-intensive jobs continue to grow at home. As a result, trade and investment rules have been liberalised to support the development of global value chains (see Tanaka 2009). Yet national- and regional-scale production has remained durable in some industries, and knowledge work is gradually coming under greater pressure from globalisation. In the automotive industry political pressure – in the form of indirect, latent protectionism – drives automakers to hedge their bets by locating production as close to end markets as is practical. Because automakers are few in number and therefore powerful, they have been able to force their largest suppliers to follow them abroad as they have globalised. This facilitates just-in-time production and design collaboration. Yet while this provides local content, it also makes it hard for local suppliers in developing countries to compete. Indeed, as we argue in a recent paper (Sturgeon and Van Biesebroeck 2010), policymakers in the developing world seeking to cultivate the automotive industry have limited options. Political opposition to large-scale finished vehicle imports, combined with high minimum efficient scale in production, means that local market size dictates the potential for the industry’s growth. The dream of a viable, fully blown national automotive industry lies beyond the reach of all but the very largest developing countries, such as Brazil, China, and India. And even in these countries it seems inevitable that multinational firms will continue to dominate the domestic industry for a long time to come. But we suggest that there are several other avenues open for development. First, a few midsize developing countries, such as South Africa, Thailand, and Turkey, are large and rich enough to support vehicle assembly for their domestic markets as long as they can export to their wider regions as well. Second, several developing countries are close enough to developed countries to supply parts on a just-in-time basis within regional trade blocs, such as Mexico in NAFTA and several eastern-European countries in the EU. These countries have become export hubs for labour-intensive parts and more recently for the export of low-cost vehicles as well. Third, there is a growing possibility for local automakers to leverage the new, relatively open global supply base to rapidly become more competitive locally and, perhaps, in world markets. For example, Chery Automobile, a small, state-controlled company based in Wuhu, China, has been able to develop and market a line of Chery brand vehicles within a remarkably short time by tapping the expertise of first-tier global suppliers with operations both in China and in the West. Chery obtains a full range of inputs from the global supply base, from parts to production equipment to design and system integration expertise. But since learning is relatively shallow, the sustainability of Chery’s approach will need to be proven over the long term. Even when local firms have opportunities to move up the automotive global value chain, learning tends to be slower than in other industries because new vehicle programmes typically have four- to six-year life cycles. In addition, winning significant new contracts with multinational assemblers can require that suppliers collocate engineering work in or near the world’s main automotive design centres, southeast Michigan, Stuttgart, and Tokyo/Nagoya. Such investments are beyond the reach of local suppliers in poor countries. Nevertheless, as the markets for motor vehicles shift to the developing world and production inevitably follows, more development and design work will shift as well. The automotive cluster in Shanghai has only a few important design centres so far, but local Chinese firms are trying hard to fill the vacuum. In India domestic firms have deeper engineering capabilities, and the small, bare-bones vehicles that dominate the local market comprise a segment that has eluded most multinational firms so far. It remains to be seen whether these vehicles can be successfully exported. The prospects for local companies in automotive global value chains are still less promising than in other industries, but the future could eventually become significantly brighter.

"About three-quarters of the nearly 5 million barrels of oil that escaped Macondo has evaporated, dissolved or been dispersed by chemicals, skimmed by boats, burned, weathered and, most important, devoured by the Gulf of Mexico's permanent oil-eating microbial workforce, according to a study released Wednesday by the National Oceanic and Atmospheric Administration and Interior Department."

Great news. Christie seems to be doing a good job there.

The join date is from the Big Crash of the old Snitz forums in 2005 so everyone started fresh on this software at the same time.

Welcome back!

Nice find.

Your intentions are good, but your logic is backwards. The reason the cod fishing industry died in Newfoundland was precisely because it was all about the money. Fishermen saw an opportunity to earn a living by fishing in the coastal waters, thereby feeding a demand for Newfoundland cod, which was presumably tasty and well priced. Abusing a common resource which you depend on is an age-old economic phenomenon called "tragedy of the commons". You can read more about that on Wikipedia. Now obviously it's not desirable to fish a species to extinction, first of all because fishers will lose their jobs and also it reduces the welfare of those who enjoyed eating said fish. However, a high-handed decree issued from the government of "Thou shalt not fish" is doomed to failure. It's the same reason the drug war is an abysmal failure and Prohibition before that: there are no victims of this "crime", so all you do is push a voluntary exchange into a black market. And you don't fix the tragedy of the commons. The real way to solve overfishing is through property rights. In areas where local politicians aren't paternalist wannabe divine-right tyrants, there have been many successful implementations of "cap and trade" fishing rights. If you create a system of permits which entitle you to fish, and the permits are traded openly on an exchange, then the fishermen have an incentive to maximize the total value of their stock. That is to say, fishermen themselves will go to great lengths to prevent their catch from dying out. So you see, as economists will tell you, it's all about the incentives. Problems like this are solved only when you think of them as "all about the money". Also, remember that while politicians may intend to bestow all sorts of free lunches with their policies, outcomes are usually not quite so rosy.

Italy to China in driverless vehicles PARMA, Italy — It's a modern-day version of Marco Polo's journey halfway around the world — but is anyone at the controls? A team of Italian engineers on Tuesday launched what has been billed as the longest-ever test drive of driverless vehicles: a 13,000-kilometer (8,000-mile), three-month road trip from Italy to China, not in search of silk, but to test the limits of future automotive technology. Two bright orange vehicles, equipped with laser scanners and cameras that work in concert to detect and help avoid obstacles, are to brave the traffic of Moscow, the summer heat of Siberia and the bitter cold of the Gobi desert before the planned arrival in Shanghai at the end of October. "What we are trying to do is stress our systems and see if they can work in a real environment, with real weather, real traffic and crazy people who cross the road in front of you and a vehicle that cuts you off," said project leader Alberto Broggi. The road trip consists of two pairs of vehicles, each with a driven lead van followed by a driverless vehicle occupied by two technicians, whose job is to fix glitches and take over the wheel in case of an emergency. The driverless vehicle takes cues from the lead van, but will have to respond to any ordinary obstacles or dangers. The two pairs alternate stretches along the route to China. "We will definitely need some help by humans. It is not possible to have 100 percent driverless. This is why I call it a test, not a demonstration," Broggi said. Governments have yet to write rules of the road for driverless vehicles, so the team has obtained prior permission from all countries along the route to carry out the experiment. To protect themselves from liability, they are placing one of the technicians in the driver's seat, ready to assume the controls or slam a red shutdown button if necessary. The technology developed by Vislab, an artificial vision and intelligent systems lab at the University of Parma run by Broggi, might one day allow driverless vehicles to transport goods across Europe. Analysts say such technology is feasible in the foreseeable future, but some question its utility. "It begs the question why. In Australia, you have big trucks with three or four trailers attached in the desert. Why do you need an autonomous vehicle if you can connect them with a piece of steel?" said Andrew Close, an analyst at IHS Automotive. Close said he expected it to take at least a decade before a convoy of driverless vehicles following a lead would be ready to hit the road on a transport job. Broggi said driverless vehicles are probably 20 years away. But elements of the technology could find applications much quicker. For example, the scanners being tested could soon allow farmers to program tractors to plow and seed fields through the night, Broggi said. Vislab is also working with Caterpiller Inc., to develop unmanned vehicle technology for extreme environments, like mining. "We would like now to do a long experiment and try this technology for 24 hours a day, with diverse temperatures and traffic, to see if our systems recognize these situations," Broggi said. A test drive off campus on Thursday illustrates the many hazards. A tractor trailer blocked visibility entering a busy traffic circle, forcing the lead vehicle to inch tentatively into oncoming cars. When it did find a break, there wasn't enough time for the second vehicle to follow before another car inserted itself between them, cutting off communication. The technician aboard the second vehicle had no choice but to hit manual and start driving. Failure is part of the plan. The goal is to determine precisely the situations where the technology does not work — and fine-tune it using 100 terabytes of information that will be gathered along the journey. Such a convoy formation could one day be used to caravan trucks across long distances, and is a highly sought after military application that would expose fewer soldiers to risk in hostile environments. In ordinary life, the technology might one day be used in a passenger car to allow drivers stuck in traffic jams to sit back and read the newspaper, Broggi said. "This is a study that will bring us closer to that day," said automotive analyst Close. The vehicles travel at a maximum 50 or 60 kilometers an hour (30 or 37 miles an hour), and must be recharged for a full eight hours after every two to three hours of driving [CSpec: what a great technology]. They expect to get in four hours a day of driving. The idle pair will be carried along the route on a truck. One of the many challenges facing the team will be to find places to recharge the vehicles in remote areas of Siberia and Mongolia. Just in case, they have packed gasoline-powered generators. The journey will be filmed by a group of Italian vehicle adventurers and also streamed onto Vislab's Web site. The project has been funded with a euro1.8 million ($2.3 million) grant from the European Commission's European Research Council, and Vislab has technical sponsors including Piaggio, which has provided the Piaggio Porter vans.

Again, what are the costs associated with a "decimated" water fowl population? How much should we care? Should we also spend a boatload of money trying to save animals that aren't cute and fuzzy?

Interesting that no one has commented on what I think are the two most interesting quotes: "voters given an opportunity to endorse Barack Obama for president were more likely to later favor white people for job openings." "people who bought green products were more likely to cheat and steal than those who bought conventional products."

Welcome! Interesting contrast between your avatar and signature pictures...

The economic way of thinking would lead you to expect this phenomenon. When you make something cheaper, people will consume more of it. Duh. For another similar story that is the bane of paternalists, see this Wikipedia entry: http://en.wikipedia.org/wiki/Peltzman_effect

If true, what are the costs of a decimated water fowl population? What about the fact that man-made fisheries in the gulf are responsible for thousands of seabird deaths every year? And where does it say that every single oil-related bird death was the same species?

Number of birds killed by the BP oil spill: at least 2,188 and counting. Number of birds killed by wind farms: 10,000-40,000 annually. Number of birds killed by cars: 80 million annually. Number of birds killed by cats: Hundreds of millions to 1 billion annually. Don't worry there is some good news. Number of birds killed by fisheries: tens to hundreds of thousands annually (fortunately for the birds, some of these fisheries are now shut down).

Why going green won't make you better or save you money Washington Post Like most Whole Foods shoppers, David Bain thinks he is a decent citizen of Earth. His family buys mostly organic food. They recycle. He recently fortified his green credentials by removing a leaking oil tank in his yard. But here's a head scratcher: Though the Bains live in Arlington within walking distance of Whole Foods [CSpec plug: this is where I live!], they often drive there in an SUV that gets just 19 miles per gallon. He has noticed that his SUV is not alone in the lot. Does that make Bain a hypocrite? He paused before responding: "I could see how people would come to that conclusion, but I don't have the illusion that people's decision-making is always logical." We drink Diet Coke -- with Quarter Pounders and fries at McDonald's. We go to the gym -- and ride the elevator to the second floor. We install tankless water heaters -- then take longer showers. We drive SUVs to see Al Gore's speeches on global warming. These behavioral riddles beg explanation, and social psychologists are offering one in new studies. The academic name for such quizzical behavior is moral licensing. It seems that we have a good/bad balance sheet in our heads that we're probably not even aware of. For many people, doing good makes it easier -- and often more likely -- to do bad. It works in reverse, too: Do bad, then do good. "We have these internal negotiations going in our heads all day, even if we don't know it," said Benoît Monin, a social psychologist who studies moral licensing at Stanford University. "People's past behavior literally gives them license to do that next thing, which might not be good." The implications of moral licensing are vast, stretching beyond consumer decisions and into politics and environmental policy. Monin published a study showing that voters given an opportunity to endorse Barack Obama for president were more likely to later favor white people for job openings. Social psychologists point to government standards for fuel efficiency as another example of moral licensing at work: Automakers can sell a certain number of gas guzzlers as long as their overall fleet achieves a specified miles-per-gallon rating. "There are so many contradictions in today's world, especially when it comes to green issues," said Keith Ware, who has watched with raised eyebrows as Hummers pull up to his environmentally sensitive appliance store, Eco-Green Living, near the nuclear-free zone of Takoma Park. From a theoretical perspective, the research has shown that "it's like we can withdraw from our moral bank accounts," Monin said. "It's a lens through which you see the rest of your behavior. But it may not even be conscious." This seemingly contradictory behavior is all around us, but it is probably most apparent, and easy to lampoon, in the greening of America. University of Toronto behavioral marketing professor Nina Mazar showed in a recent study that people who bought green products were more likely to cheat and steal than those who bought conventional products. One of Mazar's experiments invited participants to shop either at online stores that carry mainly green products or mainly conventional products. Then they played a game that allowed them to cheat to make more money. The shoppers from the green store were more dishonest than those at the conventional store, which brought them higher earnings in the game. "People do not make decisions in a vacuum; their decisions are embedded in a history of behaviors," Mazar wrote, with co-author Chen-Bo Zhong. "Purchasing green products may license indulgence in self-interested and unethical behaviors." Local home-appliance and building contractors who specialize in green products see examples of such indulgence almost every day. They have begun to warn customers that installing green products in their homes does not give them license to overconsume: Don't run the plasma TV all night just because you put solar panels on your roof; don't take endless showers because your water is heated off the grid; don't do more loads of laundry because your machine is energy-efficient. There is ample reason for such warnings. Lucas Davis, an energy economist at the University of California, Berkeley, has published a study showing that after getting high-efficiency washers, consumers increased clothes washing by nearly 6 percent. Other studies show that people leave energy-efficient lights on longer. A recent study by the Shelton Group, which advocates for sustainable consumer choices, showed that of 500 people who had greened their homes, a third saw no reduction in bills. "Subconsciously, I think this is just part of human nature," said Jason Holstine, owner of Amicus Green Building Center in the Kensington. "It's like, 'If I just do a little, I'm off the hook and my conscious is clear. Give me a pat on the back, and thank you very much.' Then it goes too far." "They think, 'I'm being a good person, I can do more of this stuff and still come out ahead,' " said Frank Zeman, director of the Center for Metropolitan Sustainability at New York Institute of Technology. "Although the problem is that they will never come out ahead. This goes to the heart of the sustainability challenge." But for luxury retailers, this behavior is often a boon. Uzma Khan, a marketing professor at Stanford who studies the psychology of buying, once asked study participants to choose between buying a vacuum cleaner or designer jeans. Participants who were asked to imagine having committed a virtuous act before shopping were significantly more likely to choose jeans than those not thinking of themselves as virtuous. "That's the amazing thing here: People don't even have to do good for this effect to happen," Khan said. "Even if they plan to do something good, it will give them a boost in their self-image. Any type of situation where you have guilt involved, you will see this, and so this happens in luxury goods." And neither the customer nor the retailer could know it's happening. Moral licensing behavior extends, in a different way, into dieting. Khan showed in a study last year that people ate more chocolate while drinking Diet Coke than while drinking more, sugary fare. Dietitians in the region report all sorts of odd justifications from clients eating bad food while trying to lose weight. Rovenia Brock, a District dietitian, says she has clients keep a food and activity diary because it is the only way for them to see that ordering a diet soda at McDonald's is slowing their progress. Without the diary, "it's helter-skelter and their behavior will be all over the place," Brock said. "It's like spaghetti on the wall." When they write down their behavior, the inequitable trade-offs come into full view -- if they don't lie. Many clients, uncomfortable with seeing the truth revealed in their diary, simply leave it out, she said. Brock said she sympathizes with clients who engage in moral licensing. It turns out that she's not so different from them. All her diet counseling apparently makes it easier for her to decide to gulp down a pint of Haagen-Dazs banana split ice cream. "I feel like I deserve to have it," she said. "I know I'm gonna work out, work it off, blah, blah, blah. It starts out with a cup, and then later on I can hear it calling me from the freezer. One scoop turns into another. Like my clients, if I pick up the pint and put in a spoon, I'm done. That's my goose cooked, royally."

And how many high ranking politicians have admitted to using pot in their youth? Both Obama and Bush (well after his youth) were cokeheads at one time too.

The betting markets aren't too optimistic about passage in CA, but there's still time: . This completely ineffectual and counterproductive prohibition must end.

Disappointing and messy Stig lap in the Camaro. Yesterday's show was very good until the last segment which was pretty stupid, IMO. And once again the show just sort of ends with no natural conclusion. They seem to be having a serious problem cutting down the films to fit in the hour-long timeslot.

If only the UAW wasn't so brazenly favored in the GM and Chrysler bailouts.

The episodes so far have been good, but not great. I do appreciate the fact that they're taking the show somewhat seriously and not just making penis jokes and breaking everything, but I think the films are lacking some pop.

The Newest Wonder of the World: The Ruins of Modern Greece WSJ ATHENS—Georges Kalaras used to view with pride the sports hall built near his home here for the 2004 Olympic competition in rhythmic gymnastics and ping pong. Now, he gets mad every time he jogs by. "Look, it's locked!" shouted the 38-year-old Mr. Kalaras, who works for the Athens city water company. Two stray dogs tangling with each other behind a padlocked metal fence accounted for the only activity in the complex, which seats 5,200 people. Mr. Kalaras figured the steel and glass hall, costing taxpayers $62 million, would provide recreational space in his neighborhood. Officials envisioned concerts or shops. Instead, when the Olympic torch went out after the Athens Summer Games six years ago, the doors closed here, as well as at many of the 30-odd other sites built or renovated for the Olympics that summer. The vacant venues, several of which dominate parts of the city's renovated Aegean coastline, have become some of the most visible reminders of Greece's age of excessive spending. Sites range from a softball stadium and kayaking facility to a beach volleyball stadium and a sailing marina. As Greece sifts through the wreckage wrought by its enormous public debt, which sent tremors through world finance in recent months, the Athens Games are once again unifying this nation—this time as a target of criticism. They cost an estimated $7.4 billion to $14 billion, minor in light of the more than $370 billion of public debt, but that hasn't mitigated the resentment. "The Olympics are back in the conversation," says Yiannis Pyrgiotis, who heads the state agency in charge of finding profitable ways to use the facilities. "They're like a ball in a field with everyone kicking it." Even boosters of the Olympics are having second thoughts. George Tziralis, a technology investor, in 2007 co-authored a glowing report declaring the venues as "greatly improving the quality of life of the inhabitants of these areas, providing valuable resources to the community and the economy." On a recent afternoon, staring at a pile of bricks on the unfinished entrance behind a locked metal fence encircling the Olympic sailing marina, he was less upbeat. "I hope you're calling this article 'The Nonsense of the Olympics,'" he said. Boats filled about a third of the 120 slips at the marina, which remains closed to people who aren't boat owners. Later, Mr. Tziralis, 28, gestured out the window of his Opel Corsa at a huge, locked complex of mostly vacant Olympic properties, located on the former site of the city's old airport. "There's no way there shouldn't be a park here six years after the Games!" he shouted. That complex, which cost taxpayers $213 million, includes stadiums for field hockey, softball and baseball—sports with little or no following in Greece. The facility for canoeing and kayaking slalom at the site was to become a water amusement park. It didn't. The officials who organized and ran the Games think the ganging up on the Olympics is unfair. They also point out that Athens is not alone: Beijing still hasn't figured out what to do with its massive stadium built for the Olympics, called the Bird's Nest. "It's an easy target to blame the Olympics, since they can't defend themselves," says Spyros Capralos, who was general secretary of the Games and held various leadership positions in the organizing and bid committees. The biggest problem, he and others agree, was that too many permanent structures were built. Since Greece was late in its preparations—the International Olympic Committee in 2000 admonished the country to hurry up—the focus was on the Games, not on what came after them. Given the time pressure, it was easier and sometimes quicker, but more expensive, to build permanent structures than temporary ones. There wasn't enough time in some instances to conduct a bidding process, driving up costs further. No one considered the costs of operating the sites after the Games, Mr. Capralos says. The national sports bodies also encouraged permanent structures, believing they would promote participation in those sports after the Games. With the exception of rowing, that hasn't happened. "Greeks like sports, but they like smoking more," Georgios Kasselakis, 24, explained on a recent afternoon at one of the city's countless outdoor cafés. The IOC says it will take post-Olympic plans more into account when choosing a host city, but few believe this changes anything. Rio de Janeiro had virtually no venues built when it was selected last year for the 2016 Olympics, but the IOC "wanted the Games in South America," says David Wallechinsky, an Olympics historian. Mr. Capralos, now chairman of the Athens Stock Exhange as well as president of the Greek Olympic Committee, argues that people have forgotten the huge improvement in the city's infrastructure, including refurbishing and expanding the city's subway and railway and adding major new highways. The measures, which accounted for more than half of the total costs associated with the Games, have loosened the snarl of the city's notorious traffic. And some of the venues are being used, mostly the renovated ones, such as by the country's popular basketball teams. The new badminton stadium is now a theater, recently featuring the Broadway musical "Evita." But the fiscal woes outweigh these successes. A range of estimates, varying depending on which infrastructure projects are included, echo the accounting uncertainty around the federal deficit. Mr. Pyrgiotis, who heads the agency overseeing the use of the venues, figures the sites are losing about $12.3 million a year. Most of the vendors who have leased sites for other uses aren't able to pay. In his cluttered office, he looked at framed photos on the wall showing Greek women in white robes lighting the torch to kick off the 2004 Games. He marveled at how much has changed since then. "Maybe it's cultural," said Mr. Pyrgiotis, who has several degrees in architecture and city planning from M.I.T. "Our attitudes lead to these very difficult situations from which we try to disentangle ourselves."

Taking the Driver Out of the Car WSJ "Your grandchildren will snap across the entire continent in 24 hours on a new kind of highway and in a new kind of driverless car that is controlled by the push of a button," futurist Norman Bel Geddes promised in 1940. Mr. Bel Geddes designed Futurama, the most popular exhibit at the 1939 New York World's Fair, which in many ways inspired the construction of the Interstate Highway System. Driverless cars have so far remained the stuff of science fiction. Seventy years after Mr. Bel Geddes's promise, they are finally close to reality. Consumers today can buy cars that steer themselves; accelerate and brake to maintain a safe driving distance from cars ahead; and detect and avoid collisions with other cars on all sides. Making them completely driverless will involve little more than a software upgrade. Yet the potential for advanced personal mobility is being ignored in debates over surface transportation. These debates come to a head every six years, when Congress hashes out how to spend federal gas tax revenues. Congress has increasingly diverted the funds—$40 billion a year by last count—from highways to transit. The Obama administration and House Transportation Committee Chairman James Oberstar (D., Minn.) want to go even further in the next reauthorization, now scheduled for 2011. The administration has focused on a new national high-speed rail system, as well as streetcars, light rail and other projects, to reduce driving and congestion. Yet driverless cars could render the hand-wringing over roads versus rail needless. Driverless technologies were demonstrated in 1997 on a California freeway when eight cars without drivers successfully operated just one car length apart at 65 miles per hour. In 2007, six cars negotiated the Defense Advanced Research Projects Agency Urban Challenge, following all traffic rules in an urban environment with other vehicles. Volkswagen says enhanced global positioning systems can keep cars within two centimeters of their desired location on streets and highways. This summer, the company will demonstrate its technology by running a driverless Audi at racing speeds up the twisty Pikes Peak road. At the 2007 event, General Motors vice president of research Lawrence Burns predicted that completely driverless cars would be on the market by 2018. He added that the primary obstacles were legal and bureaucratic, not technological. Driverless vehicles offer huge advantages over current autos. Because computer reaction times are faster, driverless cars can safely operate more closely together, potentially tripling highway throughput. This will virtually eliminate congestion and reduce the need for new road construction. Toyota's recent recalls naturally lead to worries that computer glitches could cause serious accidents. Since each car will be independently controlled, a failure in one would simply lead others to avoid that car. Modern cars already have numerous built-in computers that do things, such as anti-lock braking, far more reliably than humans, even those who are not texting or inebriated. Any serious problems could be quickly corrected through wireless software upgrades. Driverless cars and trucks will be safer. They will also be greener, first by significantly reducing congestion, and eventually because vehicles will be lighter in weight due to reduced collision risks. Perhaps most important, driverless vehicles will bring mobility to everyone, not just those able to pass a driver's test. While many people will still choose to own a car, increased numbers may rely on car sharing. Outside of ultra-high-density areas such as Manhattan, driverless cars will render urban transit and intercity passenger trains even more obsolete than they are today. The American automobile fleet turns over every 18 years, so if Mr. Burns's prediction that driverless cars will hit the market by 2018 comes true, we could have a completely driverless system by 2036. State highway officials could accelerate this timetable by working with auto manufacturers to set standards and a transition path. State and local highway agencies could install wireless communication systems at major intersections and highways—a much less costly undertaking than building new roads, much less high-speed rail. President Obama's so-called high-speed rail plan mostly consists of moderate-speed trains running at top speeds of 90 to 110 miles per hour, speeds attained by many railroads in the 1930s. This will attract few people out of their cars. The proposals for trains running at 160 to 220 miles per hour in California and Florida will cost at least 10 times as much to build as the 110-mph lines, but they are not likely to attract 10 times as many passengers. As Burlington Northern Santa Fe CEO Matt Rose testified to Congress last April, building a national network of true high-speed rail lines would cost roughly $1 trillion, more than twice as much as the inflation-adjusted cost of the Interstate Highway System. While interstates paid for themselves out of gas taxes and other road user fees, all the capital and billions of dollars of annual operating costs of high-speed rail will be borne by general taxpayers, most of whom will rarely ride the trains. America's population distribution makes passenger trains here less effective than in Europe or Japan. Yet even abroad, the average residents of France and Japan ride high-speed trains less than 400 miles per year, making up just 4% to 6% of all passenger travel. France and Japan have each spent roughly as much per capita subsidizing their high-speed trains as we spent building our interstate highways. Yet the average American travels 10 times as many miles on the interstates as the average French or Japanese travel on high-speed trains. Amtrak's high-speed Acela trains between Boston and Washington cover most of their operating (but not capital) costs. To do so, fares are some 10 times greater than many relatively unsubsidized bus services that carry about three times as many passengers in the northeast corridor as the Acela. Claims that trains are environmentally friendly may apply to freight trains, but not passenger. A 50-ton railcar can carry 100 tons of cargo, making freight trains highly energy-efficient. However, a 50-ton passenger car carries only about 15 tons (170 people), and more typically carries about 2 to 3 tons (25 to 35 people), resulting in average weights per passenger that are several times greater than for cars or buses. In January, Secretary of Transportation Ray LaHood eliminated Federal Transit Administration requirements that federally funded streetcars and other rail transit be "cost effective" relative to buses. The FTA then funded costly streetcar projects in Dallas, Detroit, New Orleans and Tucson despite the fact that low-cost investments in traffic signal coordination, buses or many other projects would do far more to relieve congestion and improve mobility. A return to rails would turn the clock back to a time when only the wealthy had access to easy mobility. The 19th century witnessed several amazing transportation breakthroughs, including steamboats, steam trains and electric streetcars. Yet in 1910 most Americans enjoyed little more personal mobility than they had 100 years prior. High fares for steamboats and passenger trains mainly limited such travel to the wealthy. Streetcars served only urban areas and were popular with the upper classes. The revolution that finally brought mobility to the masses was Henry Ford's low-cost Model T, which most factory workers could afford. Since 1910, individual travel has grown from an average of about 3,000 to well over 18,000 miles per year. Cars contributed to a seven-fold increase in personal incomes. Automobiles continue to maintain a huge cost advantage over passenger rail. Counting both subsidies and personal costs, Americans spend less than 25 cents a passenger mile on autos, nearly 60 cents a passenger mile on Amtrak, and more than 90 cents a passenger mile on urban transit. No wonder 85% of all our passenger travel is by automobile. The call to spend hundreds of billions of dollars in subsidies to build the world's finest, 1930s-era transportation network would benefit the wealthy and those willing to live and work in expensive quarters near rail stations. In contrast, the driverless scenario relies on new technology, not old; and will largely be self-funded by users rather than paid out of tax dollars. Most important, driverless vehicles will bring mobility to almost everyone.

Auto-Sales Optimism Fades DETROIT—Just a few months ago, optimism was rising in the auto industry that new-vehicle sales would make a strong rebound this year after falling to historic lows in 2009. New data, however, suggest the recovery isn't as strong as it appeared earlier in the year. The increase in auto sales in the first five months of 2010 has been driven by higher sales to rental-car companies and other commercial fleets—not sales to consumers, who are now showing signs of more pessimism about the economy, as well as a halting interest in buying new cars. "The industry is on the mend but there are reasons for caution," said John Hoffecker, a managing director at AlixPartners LLP, a consulting firm that recently surveyed consumers as part of its annual study of auto-industry trends. "We're still waiting for consumers to come back into dealerships," Mr. Hoffecker said in an interview. In the year's first five months, auto sales rose 17% from a year earlier to 4.6 million cars and light trucks, according to Autodata Corp. But the rise has been fueled by commercial customers that had all but stopped buying last year during the recession and are now finally restocking their fleets. Fleet sales are up 32%, while sales to individual customers at dealerships have increased just 13%. More importantly, retail sales remain at low levels compared with historical standards. Since 1992, retail customers have reliably accounted for sales of at least 10 million cars and light trucks a year in the U.S. That string ended last year amid the recession. According to analysis by AlixPartners, this year's sales may not surpass 10 million, either. In the first five months of the year, the annualized pace of retail auto sales peaked at 9.5 million cars and trucks in March, when consumer purchases were spurred by heavy incentives offered by Toyota Motor Corp., according to AlixPartners' new auto-industry study. The retail-sales pace in May was just 8.9 million vehicles. Concern about weak retail sales hasn't escaped auto makers. George Pipas, the top sales analyst at Ford Motor Co., said he is seeing evidence that consumers are deferring decisions on major purchases, in large part because home values and income growth haven't rebounded. "These are two things that really have to happen before you will see auto sales move up more significantly," Mr. Pipas said. Earlier in the year, the recovery in auto sales appeared to be stronger. The role of fleet sales in the rise wasn't clear at the time because some auto makers don't break out their fleet and retail totals, making industry figures hard to come by. Then in March, sales rose 24% and hit an annualized rate of 11.8 million—the highest since September 2008, except for when the government's cash-for-clunkers program caused a spike last August. The strong response to Toyota's incentives seemed to indicate consumers were again willing to spring for new rides. Instead, the incentives now look like a one-time boost whose effect has now faded, said AlixPartners' Mr. Hoffecker. "We felt better in the January-February time frame," he said. According to the AlixPartners study, only about 6% of consumers say they expect to buy a new car during the next six months. That is below the historical average of 7%, and not high enough to drive a robust rebound. While vehicle sales aren't rising as fast as the industry would like, Mr. Hoffecker said auto makers' finances are nevertheless strong. The deep restructurings by General Motors Co., Chrysler Group LLC and others have enabled them to earn money even at low levels of new-car sales. "From a profit standpoint, the industry is still in good shape," he said. "But we need the broader economy to kick in before it's a full green light."

Where in NY? I lived in Rochester for 4 years...