A REAL Auto Industry bailout solution

First things first. It is absolutely and unequivocally wrong to just hand over money to these fat cat/old boys club companies (i.e. Ford, GM and Chrysler), regardless of concessions or promised reforms.

Don't get me wrong, I feel for the economy and the automotive industry is a crucial part of it. That's why I do favor a bailout of sorts, just one that might actually help the greater economy in general and not just the "big 3".

For too long, the "big 3" have been lining their pockets and letting excess consume them. They were content with the status quo, and seemed more focused on "fluffy" upgrades like design and interior gadgets rather than substantive improvements like fuel efficiency and quality. Don't get me wrong, they have made good (not great) inroads in these last two categories lately, it's just that it was seemingly too late.

They also continually gave in to Union demands and allowed employee costs to escalate into the realm of ridiculousness. I'll never forget a headline from 3 or 4 years ago, that struck a cord with me and demonstrated the dire nature of their situation long before any of this recession talk.

"GM's health care costs overtake steel costs on a per vehicle basis".... Really? There is more cost per vehicle in employee health care than steel? I mean, I realize things have moved towards plastics and other synthetics, but come on! It's a freakin' car! The backbone of the thing is steal!

I've said, since the moment I read that headline, that they were a company with deep routed problems that likely were not going to go away any time soon, or easily.

I also laugh at the idea that you have to buy from the "big 3" to support workers in North America. That's just plain wrong, all the other major players have several plants in North America and that number would only increase if their sales were to cannibalize the "big 3's" sales.

So what's the solution? Should we just hand over tax payers money to these poorly ran companies and keep them afloat? For what? Another couple years of existence? I say no.

I say; "LET THE CONSUMER DECIDE"

Look, what's more important? The "big 3" surviving or car sales increasing? What would have the great impact on the economy? I think the obvious answer is absolutely car sales increasing.

That means auto makers move inventory, meaning they get to keep producing cars and dealers get to sell cars and consumers get cars that are (hopefully) higher in quality and get better gas mileage. Meaning EVERYONE in the auto industry gets helped and the consumer saves money by not needing as many repairs and consuming less gas. It also would help the environment in the long run and help to decrease dependence on foreign oil.

So I say, give the people, the consumers HUGE rebates/discounts on new car purchases. Let them choose which car companies should survive with their purchase choices. If the "big 3" really do make the best vehicles and therefore deserve to survive, people will choose to buy them over the other players out there. If not, they will wither and die as they should in a properly running free market. It's survival of the fittest, just the way it should be. The truth is, consumers have been voting with their wallets for a long time now. This will be their "final" battle if you will. An "Auto Referendum" if you will.

Here's the details:

1. Instead of the Government just giving the "big 3" billions of dollars in bailout money, give it directly to consumers to spend on vehicles in the form of discounts.

2. This way, car companies don't have to lower their prices, but sales should increase significantly. The consumers basically choose which companies should survive by choosing to buy their vehicles. It's completely fair and equitable to all the car companies regardless of country of origin.

3. Huge tiered discounts on the purchase of NEW vehicles only. Something like this:

• $2500 off any new car under $10,000.
• $5000 off any new car between $10,000 and $20,000.
• $7500 off any new car between $20,000 and $35,000.
• $10,000 off any new car over $35,000
  

(Obviously those numbers could be tweaked slightly, but the point is, they need to be huge discounts to really shock the industry and make a substantive difference in sales)

4. You could even promote the "big 3", by requiring the consumer to test drive at least 3 vehicles from 3 companies (obviously they can test drive more if they choose). But a minimum of 2 of those being have to be from the "big 3". You would have a form that each dealership would need to sign off on saying you completed a test drive as proof. Once you had the minimum test drives completed, you would then "qualify" for these discounts.

5. It comes right off the top. The consumer doesn't pay the full amount first and then receive this as a tax rebate. For this to work properly, it has to be an immediate savings to the consumer so that those people requiring financing are only financing the discounted price and the benefit feels tangible and "real" to the consumer. I would set it up so that the dealership figures out the total price (pre-tax) and then subtracts the qualifying discount; this is the amount the consumer pays. The dealership then submits a claim form to the government with all supporting documentation (bill of sale, licensing info and the test drive requirement form). The government then pays the dealerships the discount amounts. This ensures the government only hands out money, when and if, it is actually used and benefiting the economy as a whole.

6. The rebates obviously would only be eligible on new car purchases not used, but you include further restrictions on what is done with the current vehicles that consumers would be disposing of or trading in (Obviously first time car buyers are not affected). For example, only cars that are 10 years or younger could be traded in (for resale) at dealerships or personally resold. To qualify for the discounts, anything older than that would be part of a dealership recycling plan, whereby the dealership takes the vehicle giving the consumer scrap price for it and then in turn would be collected by government approved recycling facilities. This helps to ensure that these less environmentally friendly vehicles don't get recirculated into the market place. It would also help to ensure that the used vehicle market would not implode but suddenly being flooded with the fresh supply.

7. The number I've seen tossed around for a bailout package was $10 billion, and that was just Ontario. I think this plan could be implemented for a similar cost, except for the entire country. As of 2006, there were approximately 18.7 million passenger vehicles in Canada. If even 10% of those people were to purchase a new vehicle, (a reasonable estimate by any measure), and let's say the average qualifying discount was $5,000; then the tab for the government would be $9.35 billion. Not only that, but it would have resulted in over 1.87 million vehicles being sold. Talk about injecting the economy with new life! (Obviously there is potential for a much greater cost, but I believe the potential benefits outweigh the risk of that)

Basically, we'd be looking at a whole bunch of new cars on the road using less gas, giving off less pollution and there would be a huge boost in overall economic activity. Where's the downside here??

I might be leaving some things out, but if anyone has any comments or questions, I'd love to hear them.

Methane Digesters on Dairy Farms...

This is something that may not be feasible at the moment, but definitely worth some thought.

Install Methane Digesters on every dairy farm (and large beef operations) in the Province. This has the potential to take every one of those farms, (possibly other animal farms with more research), off the power grid in Ontario. We have already felt the consequences of not being able to produce enough hydro during peak usage times in the form of rolling black outs. Well, I would think that taking every dairy farm (and others) in the province off the grid would result in a very substantial reduction in overall hydro usage. The other benefit of this idea is that you would be reducing the methane (also important if we are going to try to meet the Kyoto protocols) that these farms are producing. Right now the methane simply enters the atmosphere adding to the greenhouse effect. As many of you know, methane is much worse for the atmosphere than carbon dioxide (which is what is produced when you burn methane to produce hydro and heat). Livestock currently represents 35% of all methane emissions from anthropogenic sources (that being produce from human activity). Even cutting that number in half would significantly reduce the methane we produce. This project again represents a dual benefit to the environment in the sense that we would be reducing the amount of electricity that would have to be produced to feed the grid as well as converting a highly harmful greenhouse gas like methane into a milder gas like carbon dioxide.

Right now, as it states here, the economics of methane digesters only work on farms of 500 plus cattle. I think the potential benefits of something like this necessitate further research and funding geared towards making it not only financial viable but more efficient and financially advantageous to implement Methane Digesters on a mass scale. I think the potential is there for Methane Digesters to have a significant positive impact on both the environment and farm economics in general.

Other possible advantages of Methane Digesters could be:

• Feeding the gird with excess hydro production. (Decreasing grid strain even further)
  
• Using the heat generated as a source of hot water instead of using a hot water tank.
• Heating Greenhouses to grow fruits and vegetables. (Negating the need to burn other gases to heat them, which are also very costly)
  
• Heating the primary residence of the farm.
  

Coal Fired Power Plants...

This is more of a national problem but I will focus on how it affects Ontario since I live close to the Nanticoke generating station. The amount of CO^2 being produced from coal fired hydro plants is astonishing and Nanticoke is #1 on the list of polluters overall. I remember reading somewhere that if you were to shut down Nanticoke that it would be the equivalent to taking 6 million cars off the roads of Ontario. (I will post the link later if I can find the story referencing that number) Now that is just a massive number and it sounds great in theory to be able to do. However the problem is where then do we replace that power generation? Any viable projects I have read about would take nearly a decade to complete. So basically what that leaves us with is, "Is there a viable solution to reduce the output that could be completed relatively quickly?"

I think the solution could found from a company by the name of GreenFuel Technologies Corp. You absolutely have to check these guys out. The technology seems to good to be true but to sum it up briefly, basically they use scrubbers to harvest the CO^2 coming out of smoke stacks and use it to grow a variety of Algae that in turn can be converted into a bio fuel and then further process into ethanol to be used to power cars. This would be like double dipping from burning coal, not only would you get the electricity generated but you'd end up with a lot of bio fuel when you were all said and done. They say that as much as 40% of the CO^2 can be repurposed into the algae, with the Nanticoke plant alone that would be like taking 2.4 million cars off the road. This is a significant number by any measure (imagine taking every car in Toronto off the road). Also based on their ratio of approx. 100 million gallons of bio fuel per 1,000 megawatts of generation at a coal fired plant, extrapolating that over Nanitcokes 7,500 megawatt production means that Nanticoke would also produce approx. 750 million gallons of bio fuel a year (which could simple be added to gasoline at the Esso plant next door to make e10 or what ever those ethanol/gas mixes are called). So overall the environment would be benefiting twice from this green solution, not to mention how much closer it would get us to complying with the Kyoto protocol.

I'll finish it with an interesting little mathematical evaluation.

In 2003, the province of Ontario consumed approx. 15.5 billion litres of Gasoline. If you convert the 750 million gallon possible output into litres, you get approx. 2.8 billion litres. So right now Nanticoke supplies about 25% of Ontario's hydro. With this modification, at it's current level of operation, it would not only supply the 25% of hydro we, Ontario, needs, but it would produce 40% less CO^2 while also supplying nearly 20% of our gasoline requirement. If that's not wow enough for ya, I don't know what is.

Life Skills Course...

Here's a novel idea, let's teach kids things that they will actually use when they grow up.

High school is suppose to be a general education tool that all children in Ontario have access to and find useful. Alright, I know, teaching kids trig functions, physics, etc. helps you score well internationally, or at least it should, but why waste the resources teaching most kids things they will NEVER use. Also, too many people in this province get screwed cause "they didn't know any better", now back in the "day" a lot of this stuff was passed down from parents and/or friends, but with the degradation of the family unit and the increasingly busing lifestyles that we all enjoy, I think there is a lot of basic stuff being missed.

So here's my proposal, you setup a general life skills class to be taken during high school that is mandatory for everyone. Now maybe you break it down into 2 classes, a basic level that every grade 9 student would have to take and an advanced level class that would be offered in either grade 11 or 12. I am not really picky on that point as long as things like the following are covered:

• Legal Rights - Things like basic labour laws that protect workers, especially blue collar workers which is where most kids are gonna end up. Contractual law, what your rights are, when is a contract legally binding, what constitutes a contract, etc.
  
  
• Identity Protection - Techniques that can be employed to protect your identity (ever important in an increasingly digital world).
  
  
• Employment Skills - How to find jobs, write good resumes, perform well in interviews, and how you should act as an employee.
  
  
• Banking - How to open an account, how to choose the proper account for your lifestyle. Things to watch out for (like hidden fees). How to obtain a loan, what to look for in a loan, what kind of loan works best for your lifestyle. The do's and don'ts of credit cards.
  
  
• Buying a Car - What you need to know about buying used, things to watch out for, what your rights are when it comes to purchase agreements, should you buy or lease? is new or used better?
  
  
• Licensing - What you need licenses for? How to get them, and why they are important. (everything from driving to hunting)
  
  
• Housing Options - Buying a house or renting/leasing. How to obtain a mortgage. Ins and outs of mortgage or rental agreements. What are you rights. What to look for when buying a house. (main structural problems, how to maximize value)
  
  
• Personal Finance - How to develop a personal budget. What are your savings options? Cover stocks, bongs, mutual funds, RRSP's, general savings accounts. Taxation, why it is important, when to do it, what you need, and how to maximize your return or minimize your payout.
  
  
• Social Edicate/Interaction - How to successfully and enjoyably interact with everyone around you. How to be tactful and courteous, also generally accepted behavior patterns for interaction (hand shakes, eye contact, etc), also personal hygiene as it relates to smell and grooming and how it affects your day to day human interaction.
  
  
• Insurance - When you need it. Why you need it. What are your rights.
  

I personally believe these are all things that are becoming greater areas of concern for today's youth. Flip through any major news publication on almost any given day and there is a tragic story about someone either being taken advantage of or falling on hard times, and a lot of the time it can be traced back to a simple lack of knowledge. Finally ask yourself this? How many of the areas that I just mentioned did you personally have to make a mistake at before you found out some important aspect about that thing. Something as simple as making a fool of yourself in public, or not being aware of your rights until it was too late to do anything about it, or maybe something as serious as not being properly covered by insurance in a certain situation or getting burned in a bad financial deal. Even some of the highly educated among us can relate to at least one or two of these areas. What would be so bad about equipping our youth with real tools to navigate the increasingly complex world in which we all live. I am not saying that books smarts are not important but isn't it about time that everyday life skills garnered a little attention and respect.

Doctor and Nurse Shortages...

The Doctor and Nurse shortage in Ontario has been well documented for some time now.

I feel there are two main issues at the root of this problem. The first being we simply are not educating and training enough people for these positions. The second being the large number of graduates who move to other countries to pursue more lucrative practices. (There is a third factor to this shortage and that is not having enough graduates who want to practice in rural Ontario, which I will also address).


The first part of that problem has more to do with the willingness of the universities and colleges to increase enrollment for medical programs. From there my proposed solution should easily be able to fill them with well qualified candidates.

One of the main road blocks in becoming a doctor, and a nurse to a lesser extent, is the cost involved. It is usually takes what, about 7 years to become a doctor? Unless you are getting it paid for by someone, who really wants to go to school for that length of time only to have a debt load the size of a small country? So right now I think it is fair to say that most doctors probably come from upper middle-class or affluent families. You need to find a way to open up that field to absolutely anyone who is both qualified and interested without turning it into an unreasonable financial burden.

What I propose is to start offering a medical education contract program. Basically this is how it works:
- Everyone who reaches the predetermined minimum grade requirements is eligible.
- All tuition fees and residence costs are covered.
- Doctor programs would require a 10 year practice commitment within Ontario
- Nurse programs may only require 4-5 year work commitments within Ontario
- During the contract periods, their pay would be slightly reduced to help recoup some of the education fees (but certainly nowhere near 100% cost recovery). For a doctor maybe $2500 less a year, and a nurse $1000 less a year. (To be determined upon further investigation)

So basically what we would be doing is saying we will completely pay for you to become a doctor or Nurse in Ontario if you agree to practice here for 10 years (4 or 5 for a nurse) after you have completed your schooling at a slightly reduced salary.

This would serve a couple purposes. First you would start to tap those students who have the desire and the grades to become doctors or nurses but simply would not otherwise be able to afford it. Secondly, since you require them to practice here for 10 years, they would be setting up shop somewhere for that length of time and the likelihood that they would simply up and leave after being established for that length of time greatly decreases. Also, since making it more affordable would probably attract more students from rural areas to enroll, it would stand to reason that they would, with a greater frequency, return to their rural communities to set up practices where they grew up.

Now I know what you are thinking; What happens if someone agrees to this initially, and then wants out 2 or 3 years into their contract to go elsewhere? Well you would have certain out/penalty clauses built into the program. The main one being that if you wish to either drop out of school or quite before the 10 years is up, you would simply be responsible for the entire cost of your education. This would make it quite prohibitive cost wise to cut out on the program. You may even wish to include a penalty clause on top of the education reimbursement fee within the first half of the contract.

Now I am not saying that you would run all of your medical programs this way, if someone still wanted to pay for their own education using current methods and have the freedom to practice where they wanted, and earn a full wage when they were finished, by all means, let them do so. I would simply put forth that this would be a good way to entice new qualified applicants into the medical field who would have otherwise found the barriers to be unmanageable. Of course this is all predicated on the Universities willingness and ability to handle an influx of new students.

The Auto Insurance Conundrum

Imagine this for a moment.... someone approaches you and asks if you would like to start a business, they tell you that everyone who owns a car will need it and the marketplace almost guarentees a profit. What's the catch you say? It's the law that people have it!!

That in a nutshell is Liability Auto Insurance coverage in Ontario. First the government of Ontario legislates that you must buy this coverage and then they open it up to the "free" market for pricing and deployment. That has trouble written all over it.

Here is my Reform proposal:

The Province provides the mandatory amount of Liability Insurance for all licensed drivers.

First some facts:

• 15,549,879,000 Litres of Gasoline used in Ontario (2003)
  
  
• 4,943,297,000 Litres of Diesel used in Ontario (2003)
  
  
• Therefore, for every penny of tax levied on the sale of these fuels, $200 million would be generated.
  
  
• Sample : The annual cost to a person consuming an average of 60 litres of fuel per week would amount to $156. (Based on a 5 cent tax.)

The Basic Logistics of the Plan:

• Levy a per litre fuel insurance tax/surcharge on all commercial gas sales.
  
  
• The coverage would be administered and monitored via current valid drivers licenses.
  (A Valid Drivers License = Coverage)

Benefits of the Proposal:

1. Unavoidable:
• You Drive ---> You Buy Gas ---> You Contribute to the Insurance Fund
• If you drive without a Valid Driver's License, you still contribute to the insurance fund even though you are not covered.
  
  
2. Usage Based:
• The more you drive ---> The more gas you use ---> The more you contribute
• You can own a vehicle, and if you choose not to drive it for a week, a month, a year or whatever, you aren't needlessly paying for Liability coverage.
  
  
3. Realistic Driver Evaluation:
• Government already tracks your driving history
• They alone would determine whether you are fit to drive or not (not the Insurance Companies)
• Point system already determines at what infraction level you are no longer fit to drive.
• The system measures the amount you drive and if you are qualified to drive, not things like what kind of car you drive.
  
  
4. Unbiased:
• Does not discriminate against sex
• Does not discriminate against age
• Both of which run rampant in the current system
  
  
5. Misc. Benefits:
• Easier for government to crack down on Insurance fraud (increased penalties etc.)
• More competition among regular Insurance companies for optional coverage. (Since you don't HAVE to have it, you can take your time to shop around or wait for a better price on the extra coverage you are looking for)