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General Motors' venture capital plan leaves us waiting
June 6, 2010 - Mike Maneval
An article on a move by General Motors to invest $100 million into a venture capital firm at HuffingtonPost.com tries to put the best spin on the decision, concluding the report by noting General Motors' investments two years ago into "Mascoma Corp., which is working to develop ethanol from wood chips, waste paper sludge and switch grass. It also invested in Coskata Inc., a renewable energy company based in Illinois that plans to produce ethanol from agricultural leftovers and municipal and industrial waste."
As I've opined before, the U.S. is too dependent on oil and coal to meet its energy needs. Diversifying the sources of energy reduces the power - the ability to sway entire economies - held by the interests which dominate these two finite commodities.
But the investments into renewable energy with the potential for U.S.-based production are two years old. The most detailed Friday's announcement gets are statements that the venture capital funds will target "developing new auto-related technology." And the decision is announced at a time when the federal government owns 61 percent of General Motors, with little certainty when the 61 percent will be sold back into independence - Huffington Post says "perhaps later this year."
The move by General Motors may be the best decision, helping the auto maker position itself for future success. The added flow of investment dollars certainly has the potential to alleviate a lingering freeze in lending. And the move may even be part of collaborative efforts to reduce demand for petroleum and expand markets for American renewable energy. But too little information surfaced Friday to reach any conclusions on any of these fronts. And so, we wait to see what impact a $100 million plan has on our long-term economic health.
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