As a fifty something guy who has tried to stay current with most technology advances ( for example, I know 8 tracks are not coming back) I am watching Detroit's current new Electric Car Plan with the sort of bewilderment that I watch my dogs chase my neighbor's riding mower:  What would they do if they caught it?  The point I'm probably missing as a Neanderthal and non-high finance MBA, is that the real goal here by the Big Three  is MisDirection not Direction.  In other words, for the money they've managed to guilt the government into, they have to pretend that they really have a plan to use it well.  Why not capture the "green theme" in the process.  Instead of hiring a Transportation Czar, the industry should just put David Copperfield on retainer.

Here's why the electric car is doomed for the next decade as well as the Big Three in their pursuit:

1. Oil at $60 a barrel encourages more consumption of gas and not less-  Everytime gasoline drops 10 cents, it is estimated that 12 billion dollars goes back into the economy in consumer spending.  If I'm not spending $80 per tank to fill up my Range Rover and spending $35 instead, then I have money to eat out and buy nice things.  The news flash here is that $150 a barrell oil was a product of the actions of traders and not consumers.  Besides, Iran, Saudi Arabia, Venezuela, and Russia all need $75 barrell oil to just break even.  Keep it below that and everything east of Boston gets bought at a global garage sale.

2. They are just ugly and not getting prettier- What Detroit has missed for nearly 30 years that the foreign manufacturers have figured out is that transportation for the individual car owner is more about style than substance.  Detroit's concept of style ended with the '67 Mustang, got briefly revived with the PT Cruiser, and is on life support with blinged out Escalade.  It's interesting that the 2.3 of the design changes have come from counterculture designers.  The vast majority of Detroit designers are still focusing on grill design and fin tailight placement.  My long bet would be on the Hummer because if the current economy doesn't improve, it is the only civilian vehicle that can be retrofitted with a 50 calibre machine gun mount.

3. The batteries are individual Cherynobles-  Imagine 30 million car batteries looking for a place to decompose over the next century.  The next storage lot will have to be the entire state of Nevada.  But perhaps 30 million batteries decomposing in Nevada would create enough ambiant energy to help Harry Reid see the light.  Battery technology will improve but the improvements will not come from Detroit.  Green Peace has a better chance of developing restorative technology than GM

4.They are Millenial and X and Y Generation Environmental Dream Cars- A couple little demographic things to pay attention to: We have a generation coming behind us that is 12 million short of the baby boomers in terms of demand capability, facing uncertain employment, project, or career, options.  Behind them is another generation with perhaps the same or more  consumers (the boomer 'echo") but hamstrung with what I call "media nostalgia economics".  That is, like typical inheritors they are resentful of what they have been left to deal with and indifferent about how to change it.  They are not about to pay $45k for a plug and play car, trust me here.  Hollywood's elite may own them but they will be parked next to Porsche 911 Turbo Carerra's for the occassional  Sunday outing.

So, it's not often that a prophet really goes on  the line to make a statement that comes back to be proven wrong but here's my statement:

The current electric car movement is DOA in less than three years and way past the time frame for the cash bailout.  It will be seen in retrospect as the greatest funding of workplace ineptness in the history of industry.  Nancy and Harry just funded a transportation time machine that will spin and glow and wobble and weave and vibrate and then fall over taking billions with it..

So, as a consumer, here's the other direction I'd like to see the Big three take:

1 Merge- GM and Ford should merge and Chrysler should just be taken out behind Cleveland and executed.  Both companies have 'me too" design, leadership, workers, and products. Too many products that people don't want, never did, and never will.  Keep design in Detroit and put the plants in Mexico.  You free up lots of land space, get folks moving to a better climate, and keep our friends south of the border, south of the border.  Why come here for jobs when you have them there? It's simple: walk across the adobe to work or walk across the desert.

2. Have the Sale of the Century- The current employee pricing model for retail sales is based on the idea that you can lose money on every sale and make it up in volume.  The manufacturers are giving away their profit to get cars off assembly lines to produce more cars to give away their profit.  This strategy was used post 9/11 to stimulate the purchase of millions of automobiles.  It didn't work then and it will not work going forward.  It created a bulimic effect for production, postponing the purge that we are now experiencing.  Just give the cars away.  In fact, pay someone to take them. Add an "Adopt an Auto Executive" program and you get rid of millions of unneeded compensation.

3. Can the Unions- When I think of the states of Michigan, Ohio, Illinois, and West Virginia, I think of a sort of Jurassic Park of Commerce.  In fact, we should just anchor each one of those states with great coffee shops and turn them into one giant Industrial Revolution Museum.  Aggregately, they are about the size of Europe and if they don't turn themselves around pretty soon, they will look like Europe.  Union members in those states will be the equivalent of displaced Muslims in France: a strange culture in a strange land, looking for work, and trying not to burn buildings down in the process.

4.  Design with the consumer in Mind-  People will tell you what they want if you ask them. Big Auto, like many 50's top down driven marketing models is caught somewhere between World War II and Desert Storm: We can't drop the A bomb to end this but I'm not sure how World of WarCraft will help us.   This is not a hard thing to figure out if you ask more questions than you provide answers.

5. Understand that technology will extend usage and drive down demand-  The average non Detroit automobile is 51% plastic and microchip and less and less steel.  The longevity, endurance, capability, and usefullness of the average auto is going to go up and up.  Except for the top 20% of consumers or the bottom 30% fueled by financing schemes, people will keep their cars longer, especially Boomers.  In fact, if the savings rate doesn't go up with Boomers, they will be living in them.

6. Rethink financing- Autos are like refrigerators...you just use them.  Design a financing strategy that lets you turn them in every 5 years of so to get the latest model.  Keep making up credit score analysis to let the poorest of people access some type of transportation.  The recent funding scam for GMAC makes the Treasury the default insurer on the loans anyway.  More cars for more people means more travel, conferencing, connection and consumption.

As an investor, stay away from the Automobile Industry, especially the Big Three until the frost in Detroit clears from the windows.  My sense is that Spring is going to be  long time coming there.