GM has had its plans and strategies thrown back with the government initiating much greater concessions from the company including the current CEO, Rick Wagoner, to step aside in favor of Frederick “Fritz” Henderson. In a move designed to allay the fears of potential buyers the US government will also from Monday back the manufacturers warranties on the vehicles it sells but it is clear the US government feels GM has something worth salvaging and has agreed another 60 days of working capital financing will be made available.

Chrysler is a much more troubled child with serious financial entanglements, however the US government is again stepping to help with the potential sale of the company to Fiat, the Italian car giant. President Obama announced the provision of another $6 billion to the car giant which is contingent on finding a buyer whether it be Fiat or another potential partner.

The announcement yesterday is very interesting for the comments made by the President on the issues not directly at hand with the survival of these two giants – GM in particular came in for serious mention when President Obama said,

I am absolutely committed to working with Congress and the auto companies to meet one goal: the United States of America will lead the world in building the next generation of clean cars.

Now if the administration is as serious as it sounds on delivering fuel efficient green car technology to the mass market then someone, somewhere will have to be around to produce the technology and manufacture the cars. The scale of the market in green cars is simply enormous and it makes a great deal of sense for USA, Inc to have a share in manufacturing these vehicles for the future instead of allowing the country to slip further into debt down the road by importing cars we could be making right here at home – but first we have to deal with the financial issues surrounding our automobile industry.

A serious reminder that green issues are just like any other – the money issue must be resolved first for everything else to follow on.

Back in December 2008 with the parties still celebrating Obama’s election success, a deal was struck with China on the development of electric batteries for car power.

Now we have touched on battery development previously and it is right we do so again because battery-powered vehicles are a prime player in the future of green cares while development and progress within this field will be a fair weather vane of progress in delivering green initiatives across the board.

China is in an even worse position than the US when it comes to the need to develop green power sources – over half of the oil it uses comes from imports leaving it highly susceptible to the global oil markets (remember when $5 a gallon was a reality for us – now imagine that multiplied several times).

The deal involving the US Department of Energy, involves BYD Autos, a Chinese company which is heavily involved in green car development and with a market such as China which is beginning to open and has billions of consumers in it, there is a huge profit potential.

What’s in it for the US?

Green car developments are not going to be 100% American researched and developed – the technologies involved are diverse and many are leading edge; no one country will have a monopoly on the technology or the cars. The US in this instance gains direct access to battery testing and benchmarking standards that are essential to measuring true battery performance and in turn this has a direct impact on the actual battery development for use by consumers.

The battery market alone is thought to be worth some USD $40 billion by 2020 based on one million electric cars on US roads – this is the target now set by President Obama for the country.

In short, the US government is not exactly raising the bar when it comes to environmental standards!

The green lobby has been bitterly disappointed by the ruling announcement but many observers have been questioning the real reason behind all of this – it certainly is sending a very different signal than that delivered earlier on in the year by President Obama when giving speech after speech on green and environmental issues.

One of the major motivators appears to be the current economic crisis and a desire not to impose any further costs on auto makers to achieve the CAFE standards. By setting the CAFE standard at a level that is already being achieved it relieves the burden off of the major car manufacturers and especially at a time when GM is in merger/takeover talks with Italy’s Fiat car giant and the financial issues surrounding the future of Chrysler are even more delicate.

This still leaves the bill which President Bush signed mandating an average of 35 mpg for cars and trucks by the year 2020 and which was signed into law in 2007 however, the dates and milestones as to how this was to be achieved were left blank for the 2011 phase in transitional period. The buck has been firmly passed on this one to the Obama administration and now they only have until April 1st to determine the rule itself – almost an impossibility and serious argument for throwing this in the trash and starting again with something more workable, especially in view of the economic impact on the industry.

Johnson-Saft are probably ahead of many other rivals globally with Johnson enjoying the design and management relationships with major car makers as well as understanding better the integration of the power management system with the rest of the car.  Saft on the other hand is a French company which has world leading expertise in lithium ion battery design and manufacture for aeronautical applications.

This all sounds good stuff but there is one major aspect of putting all of this together that has to be addressed or this is all pie in the sky.

How are you going to recharge/refuel your lithium ion battery on the road?

This is the really big issue because if batteries are a $40 billion market what is the value of the grid that will recharge the vehicle while you are on the road – the honest answer is we don’t know yet but it’s a very big number.

Ford and GM both believe that this part of the puzzle is crucial to unlocking who will win out in the lithium ion war and there are some vicious debates taking place in DC right now on whether the US should encourage and foster a domestic lithium ion battery manufacturing base (which will also take on developing the national grid) or whether America should simply import the batteries and expertise from low-cost Asian importers.

To me the answer is simple – we have had several decades of reliance upon foreign oil so why should we swap foreign oil for foreign batteries?

This is a no-brainer for the folks on the hill.

President Obama has set a target of 1 million electric cars on America’s roads by 2012 and the battery market ALONE is worth some $40 billion.

$40 billion just for car batteries by 2012 and that’s just the electric car market!

The competition is fierce and it is a global competition and here and now, Americans are making a decision with the federal monies being put up on a large slice of the battery market being American manufacturers turf and not Asian overseas manufacturers.

Ener1 is the leading US competitor with a lithium ion battery but there are others including A123 Systems of Massachusetts and Johnson Controls-Saft who have already contracted with Ford, Mercedes and BMW.  All sounds good and healthy but there is a major fly in the ointment – Asia.

Asian manufacturers have been pumping billions into R&D and manufacture of lithium ion batteries for years – if you want to place a lithium ion battery practically just take a look at your laptop battery because that is what this fight is all about.  Now consider how long Honda and Toyota have been working on integrating new battery technology into their cars and especially the car power management system which is also a key piece of technology.

Bluntly, the Asian manufacturers have had a jump start on the US for years and it is going to take a great deal of work and funds to get the US back into this particular $40 billion race and all the jobs that is going to create for mainstreet America.

We will harness the sun and the winds and the soil to fuel our cars and run our factories.

There are quite a few others packed in there as well including reference to reducing energy dependence which strengthens enemies abroad and so on.

What this means is simple – a kickstart to the further development and adoption of green technology and applying eco-friendly machines in our daily lives and the biggest one is the car.

In very recent years the popular interest in green cars has grown in a major way, fuelled (!) by the realization that we are killing the planet with our pollution, and the cost of oil, not to mention the fact that oil is a finite resource and supplies will fail at some date in the not so distant future.

The debate will continue as to what constitutes green transport and it is not just low or zero emissions.  For example, the environmental cost of a petrol/electric hybrid vehicle should take in to account the cost of production and disposal of the (large) battery, and in the case of an electric car not only the battery but also the electricity which must be generated to charge the batteries.

Pressure has been taken off green car development recently as fuel prices have dropped but if you had the choice of two cars, one of which did more miles to the gallon, was cheaper to service and was more environmentally friendly, which would you choose?

With federal government and a popular incoming President adding his weight to the argument, it is in the manufacturers interests to hasten the development of green technology.

Many people, if not all of us, have focused at some time on the color of our new President; sure he’s colored, but the color I’m thinking of is “Green” – for the first time, America has a truly green President with the credentials and vision to go forward with the political will to address the highly inefficient and polluting practices we take for granted here in the US.

Reaction from around the world has been one of satisfaction that finally, America seems to get it – the future is green!

I was sitting on a flight from DC to London recently and my fellow passenger is a chief assistant to a CEO of a DC green lobbyist; “Finally,” she said, “we have someone in the White House who means business about developing environmentally friendly and economically sustainable technologies.  Al Gore may have done much for raising awareness at home and abroad about the environment but Obama is the one in the hot seat and sees the green economy as a vital component of America’s future!”

With the headline appointments, such as Hilary Clinton as Secretary of State, dominating the headlines we should remember that behind the scenes there are hundreds of other appointments being taken up and it is clear with many that the new President is looking to seize the opportunity that is presented with the current economic climate to further the green agenda.

It is vital that the green economy adds up; America is not a land of subsidies and the technology and commercial applications are going to have deliver true value and put real dollars back into the pockets of consumers; that is how profits are ultimately going to be made.

So, All Hail the Colored Chief – he’s definitely GREEN!