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New competition hurts the auto industry


Bethel 9 --Director of Frazier Capital Valuatio; Masters in International Finance and European Business (Stephen, December 1 2009, “The Valuation of Auto & Recreational Vehicle Dealership Operations,” Chapter 2, Frazier Capital, http://www.fraziercapital.com/books/auto/2.pdf)

Second, rivalry between existing competitors involves such variables as the number of competitors, the relative strength of the competitors, the strength of their competitor`s relationship with car/truck distributors and manufacturers, the industry growth potential, the amount of fixed costs needed, service differences, and quality of cars available. Third, pressure from substitute products can hurt the auto industry. The auto industry faces competition not only from within, but also from other forms of transportation such as trains, subways, bicycles, metro transits and others. One needs to focus on substitute products and the minimum switching costs for potential customers, and high profit earning industries which can afford to reduce margins in order to broaden their market into the seller's market.


Transportation funding is zero sum


Heymsfield 11 --Former Staff Director, House Committee on Transportation and Infrastructure (David, "Let the Games Begin," http://transportation.nationaljournal.com/2011/02/transforming-the-highway-trust.php)

If rail is moved to the Trust Fund, its funding will be determined by the available revenues and decisions on how they should be allocated between highways, transit and rail. The effects of this change seem unpredictable until we know the level and composition of the fund’s revenues. Until recently the user fees supporting the fund have been adequate to cover growing highway and transit programs. This is no longer the case. The existing fees will not even cover existing programs, much less a new rail program. The Administration is opposed to increasing the current user fees. If the new revenues are not user fees and cannot be tied to any mode, we can expect major disputes on how the new revenues should be divided. It will be a zero sum game in which a dollar going to one mode will not be available for the other two. It’s anybody’s guess what the end result will be, and how it will compare to what would have occurred if rail was not moved to the Trust Fund.


Public policy trades off


Slack et al 9 --Professor Emeritus in the Department of Geography at Concordia University (Brian, Jean-Paul Rodrigue-- professor at the Department of Economics and Geography at Hofstra University, member of the Global Agenda Council on Advanced Manufacturing, , Claude Comtois-- professor of geography at the University of Montreal, 2009, Second edition of the textbook “The Geography of Transport Systems,” Chapter 3, Hofstra University, http://people.hofstra.edu/geotrans/eng/ch3en/conc3en/ch3c1en.html)

It is generally advocated that a form of modal equality (or modal neutrality) should be part of public policy where each mode would compete based upon its inherent characteristics. Since different transport modes are under different jurisdiction and funding mechanisms, modal equality is conceptually impossible as some modes will always be more advantageous than others. Modal competition is influenced by public policy where one mode could be advantaged over the others. This particularly takes place over government funding of infrastructure and regulation issues. For instance, in the United States the Federal Government would finance 80% of the costs of an highway project, leaving the state government to supply the remaining 20%. For public transit, this share is 50%, while for passenger rail the Federal Government will not provide any funding. Under such circumstances, public policy shapes modal preferences. The technological evolution in the transport industry aims at adapting the transport infrastructures to growing needs and requirements. When a transport mode becomes more advantageous than another over the same route or market, a modal shift is likely to take place. A modal shift involves the growth in the demand of a transport mode at the expense of another, although a modal shift can involve an absolute growth in both of the concerned modes. The comparative advantages behind a modal shift can be in terms of costs, convenience, speed or reliability. For passengers, this involved a transition in modal preferences as incomes went up, such as from collective to individual modes of transportation. For freight, this has implied a shift to faster and more flexible modes when possible and cost effective, namely trucking and air freight.



Either they aren't efficient or they link


Hilmola 11 (Olli-Pekka, "Benchmarking efficiency of public passenger transport in larger cities," Benchmarking 18.1, Proquest)

Argued development steps are further supported from the environmental perspective too; we analyzed relationships of different measures of private car use, and found interesting as well as statistically strong connection between share of private car use (or motorized vehicle) and measured DEA efficiency. In Figure 5 [Figure omitted. See Article Image.] is shown this relationship between space used DEA model (small) and share of private car use - linear regression enjoys R2 -value of 35 per cent (this regression relationship was also found to be < 0.001 statistically significant in regression analysis, see Appendix). As could be clearly noted, lower the efficiency of the public transportation DEA model, the correspondingly higher use of private cars. This relationship holds very nicely until the level of 0.9 DEA efficiency - interestingly some cities having frontier performance could have high car use or other way around. Similar statistically significant relationships were found within both larger DEA models (space and services; see Appendix for regression analysis); these also repeated similar causal relationship of private car use and DEA efficiency, which was having strong explanation power until frontier efficiency.


Note: DEA=data envelopment analysis

Public transportation and cars are zero sum


PTUA 10 (Public Transport Users Association, "Common Urban Myths About Transport," http://www.ptua.org.au/myths/compete.shtml)

Public transport advocates and planners have spent a great deal of effort explaining the way in which public transport modes like trains, trams and buses work best when they are combined into a network, with modes complementing one another rather than operating as competing fiefdoms. Because of the 'network effects' unleashed, improvements to bus services actually lead to more patronage on trains as well, and vice versa. The road lobby, in the same have-your-cake-and-eat-it-too spirit that gave us balanced transport, has attempted to apply this same argument to public transport and cars. It's not about cars versus public transport, said Roads Minister Tim Pallas in November 2007, quoting almost verbatim from an RACV policy document: RACV does not subscribe to the cars versus public transport argument. We believe both are necessary and complementary.... To ensure the various modes of transport complement rather than compete, transport should be planned as an integrated system rather than a set of separate modes. ---Royal Automobile Club of Victoria, RACV Directions 2007 People are tempted to accept this argument also because we are naturally drawn to avoiding conflict. After all, if the organisation charged with promoting private car use says it doesn't oppose public transport, surely that's a good thing? So what if lots of new roads get built, as long as there's some support for public transport too? Many of us have seen car dependence enacted as policy for so long that we try to make the best of a bad situation, proclaiming (like the curate in the old cartoon) that actually, parts of it are excellent! The notion of 'integrated' or 'balanced' transport is enduringly popular for just this reason. This myth loomed especially large in the Eddington 'East-West Needs Assessment' of 2008, the most significant recommendations of which were a $9 billion road tunnel and an $8 billion rail tunnel in inner Melbourne. Not only did Eddington hold to the RACV line that the road and rail tunnels would not compete with one another: he actually urged the two be done in combination and that there is a special benefit to doing so. I do not support - and I have not adopted - a 'road versus rail' approach to transport planning.... Instead of favouring one mode over another, I have looked for the right combination of modes that offer the best options for meeting Melbourne's east-west transport needs.... my recommendations.... I believe.... deserve fair consideration as a balanced and measured response to tackling some of Melbourne's major transport dilemmas. ---Sir Rod Eddington, Investing in Transport - Overview, Introduction, p.6. With any package, if you take pieces of it and leave pieces behind, then you diminish the totality of what the package could do. ---Sir Rod Eddington, ABC Stateline, 4 April 2008 Yet what does it really mean to claim that roads and public transport are 'complementary'? It could only mean that building roads actually promotes public transport use - in the way better buses promote travel by train - or at the very least, that building roads has no effect on the amount of travel by public transport, relative to the amount of travel by car. But of course this is nonsense: build a freeway, and people respond by making more car trips, including trips they may previously have made by public transport. This we know from common sense, and also from the evidence: every freeway built to date has filled with new traffic, often within just a couple of years, and led to a decline in public transport's share of travel. The decline in public transport mode share with the opening of new roads has been seen most clearly where the road runs parallel to an existing train line. When the Mulgrave and South Eastern Freeways were linked in 1988, figures from The Met showed that 20% of peak passengers on the Glen Waverley line had shifted to using their cars within weeks of the road being opened. So while in 1987 there were seven inbound peak-hour expresses on the Glen Waverley line, by 1995 the drop in patronage had reduced this number to two, and today there is just one. But aside from the localised effects of particular roads, the shift away from public transport can also be seen in Melbourne-wide figures. The graph below, from the 2007 Victorian Budget papers, shows public transport's share of motorised trips in Melbourne since CityLink opened in 2000. The graph shows mode share declining in each of the next four years - a decline that was only arrested when an increase in petrol prices and CBD employment from 2005 caused train patronage to increase significantly. Even then, mode share in 2006 remained below the level in 1999. Interestingly, the 2008 Budget papers indicated that despite further strong patronage growth on trains, mode share had slipped again, from 8.8 to 8.6 percent of motorised trips. The 2008 graph seems to have tried to obscure this fact by an otherwise fairly pointless dilation of the vertical axis. Subsequent Budget papers suggest that mode share may indeed be on the rise again, though the method by which the government estimates overall travel has changed. By the 2010 Budget, the former Brumby Government had gone so far as to retrospectively decide that mode share had actually been increasing all along! Even an unbiased observer would have cause to question whether this is more about face-saving spin than honest re-estimation, given that all credible sources from the early 2000s (including State and Federal transport departments, and the Census) clearly show public transport patronage stagnating and car use increasing strongly in the period from 2000 to 2004. All of which is consistent with the original estimates of declining mode share over that period. The failure to consistently increase mode share stems from government policy that continues to favour car travel and to marginalise public transport for anything other than peak hour CBD travel. If the State Government had really believed in its aim (first proclaimed in 2002) of increasing public transport mode share to 20% by 2020, an obvious way of demonstrating this would have been to rebalance transport funding away from roads and towards public transport infrastructure, such as suburban rail extensions. Yet as a recent report from the Australian Conservation Foundation shows, in the decade from 2000 to 2010 Victoria spent three times as much on road construction as on non-road transport infrastructure, and actually spent less on the latter as a proportion of Gross State Product than any state bar Tasmania. And this all-too-familiar disparity has continued, even while public transport patronage soared to record levels from 2006 onwards. Because this patronage surge occurred in spite of government's neglect of public transport, our system now struggles to cope with patronage levels that are still moderate by the standard of large European or East Asian cities. Usage patterns are also highly uneven: in suburbs like Doncaster, where transport follows the 'complementary' strategy of building big new roads and running buses on them, public transport use and car use have increased at about the same (modest) rate, as one might intuitively expect. Quite plainly, there is no 'network effect' between cars and public transport: just a 'zero-sum game', where more travel of one sort means less of the other, all other things being equal. (Of course population growth means all things are not equal, but if we really planned public transport with 20% mode share in mind, there would be ample room to accommodate additional travellers on an expanding system: car use need not have to grow at all.) Freeway-building doesn't assist public transport (not even buses, as another page explains), and good public transport is designed to reduce traffic, not just be a sideshow to continued growth in car use.


Public transit competitive with autos


Lewis and Williams 99 (Daniel, Ph.D., President, Hickling Lewis Brod Economics, Inc., and Fred Laurence, Ph.D., United States Department of Transportation, 1999, “Policy and Planning as Public Choice: Mass Transit in the United States,” http://www.fta.dot.gov/documents/Policy_and_Planning_as_Public_Choice.pdf)

In urban America, public transit serves three market niches that are not adroitly served by private autos and other travel modes. First, in nearly every urban area, transit serves a basic mobility function for children, elderly people, people with disabilities who are unable to drive, people who cannot afford their own cars, and motorists whose car is in the shop. Secondly, in certain urban areas, rapid transit enables a critical number of commuters to bypass severely congested roadways and thus save travel time for themselves and motorists alike. Third, in a number of commercial centers, urban neighborhoods, retirement communities, and towns with large college campuses, transit facilitates a pedestrian friendly streetscape in which walking, elevators and bicycling are more common than driving.



Link: HSR




No job creation-- built overseas


Business Insider 12 ("California Demonstrates Exactly How To Screw Up High Speed Rail," 1/10/12, http://articles.businessinsider.com/2012-01-10/news/30610106_1_chsra-california-high-speed-rail-authority-acela-express)

California has a history of farming out its infrastructure projects. Exhibit A: The San Francisco-Oakland Bay Bridge. It is years behind schedule. The budget for the eastern span has ballooned from $1.3 billion to $6.3 billion. And the landmark 525 ft. tower of the "self-anchored suspension" bridge was fabricated in ... China. For more on collapsed bridges and buildings in China (pics), the high-speed rail accident, and the economics of having a big part of the Bay Bridge built there, read.... Our Chinese Bay Bridge. The high-speed rail system will have even more foreign content. Building the civil works and laying the track will be done by local workers. But design and engineering will be done overseas by companies with expertise in the field. Trains will be manufactured overseas as well, though companies might promise to assemble them in the U.S. Mere crumbs. U.S. Taxpayers will fund the project—as they fund highway construction. But part of the funds will go to foreign companies and advance their technologies. High-speed rail is a worldwide business, and the leaders have become export powerhouses. Another sector that American industry abandoned.




Poaches employees from auto industry


Picone 11 (Brian, "High Speed Rail: Hardly an Investment in Future," 9/8/11, http://high-speedtraintalk.blogspot.com/2011/09/another-slant-on-poorer-people-having.html)

High speed rail proponents are fond of touting such projects as “investments in our future.” However, the term “investment” is misleading. Investment implies that the party doing the investing will also suffer the consequences if an endeavor loses money. But when high speed rail projects lose money — as they do almost universally — the taxpayer is on the hook, not the politicians who vote in favor of them. Even advocates of high speed rail admit that such projects almost never cover their operating costs. Iñaki Barrón de Angoiti, director of high-speed rail at the International Union of Railways in Paris, admits that while he favors such projects, they “are not a profitable business.” He goes on to point out that only two high speed rail routes in the world actually break even – one from Paris to Lyon and one from Tokyo to Osaka. Of course, rail proponents fail to mention the 11 other countries that consistently require large taxpayer subsidies to keep their lines operational. Furthermore, the French and Japanese systems claim profitability based on flawed accounting principles. The French accounting system treats taxpayer subsidies for the high speed rail as “commercial revenues." This makes the French program’s $1.75 billion in profits much less impressive – especially considering that, according to a 2008 study by Amtrak, French taxpayers spend close to $10 billion per year subsidizing the high speed rail system. The Japanese system has an even worse record. Within two decades of being established, Japan’s high speed rail system had accumulated such massive amounts of debt that the entire system had to be privatized. Japanese taxpayers were then stuck with the system’s $280 billion in debt, which they are still paying off today. If Japan and France are the world’s two best examples of high speed rail success, then perhaps we should reconsider. Even China, a nation that is no stranger to infrastructure investment, is shying away from high speed rail. In 2010, the Chinese Academy of Sciences urged the government to reconsider further investment in high-speed rail, due to the current system’s tremendous debts. According to Zhao Jian, a professor at Jiaotong University in Beijing, “high speed rail is a big loss … the operation cost is too high.” Claims that investment in high-speed rail will create new jobs are dubious. The California High Speed Rail Authority (CHSRA) predicts that 98% of its future riders are folks that would otherwise drive or fly to their destinations. This means that nearly all of the employment created by such high speed rail projects will simply be re-allocated from the airline and automobile industry. This may change the composition of employment in the U.S. economy, but not the level — while still giving the appearance of job creation.



HSR steals auto customers-- their author


Dutzik et al. 10 — Tony Dutzik, Senior Policy Analyst with Frontier Group specializing in energy, transportation, and climate policy, holds an M.A. in print journalism from Boston University and a B.S. in public service from Penn State University, et al., with Siena Kaplan, Analyst with Frontier Group, and Phineas Baxandall, Federal Tax and Budget Policy Analyst with U.S. PIRG, holds a Ph.D. in Political Science from the Massachusetts Institute of Technology and a B.A. in Economics from the College of Social Studies at Wesleyan University, 2010 (“Why Intercity Passenger Rail?,” The Right Track: Building a 21st Century High-Speed Rail System for America, Published by the U.S. PIRG Education Fund, Available Online at http://americanhsra.org/whitepapers/uspirg.pdf, Accessed 06-10-2012, p. 15-16 KA)
Passenger rail is a cleaner form of transportation than car or air travel, emitting less global warming pollution and less health-threatening air pollution. Building a high-speed rail network in the United States would attract passengers who otherwise would have taken cars or planes, reducing the country’s global warming emissions and cleaning up our air. Modernizing our tracks would also benefit freight trains, taking large trucks off of highways and adding to the environmental and health benefits of investment in rail. Passenger rail already emits less global warming pollution than cars or planes, and these savings will increase as the United States develops a high-speed rail network. The Center for Clean Air Policy (CCAP)/ Center for Neighborhood Technology (CNT) study showed that today, passenger rail travel emits 60 percent less carbon dioxide per passenger mile then cars and 66 percent less than planes. The faster diesel trains that would likely be used to upgrade current service would emit slightly more emissions, but would still emit much less than cars and planes and would draw more passengers than current passenger rail.30 (See Figure 3, next page.) Electric trains show the most potential for global warming emission reductions, even using today’s carbon-intensive electricity grid. The CCAP/CNT study surveyed the technology used on three different popular electric train lines, in France, Germany and Japan, and found that all would produce lower carbon dioxide emissions per passenger mile than a fast diesel train when powered by the U.S. electric grid. One train, used on the German ICE line, would produce about half the emissions of America’s current passenger rail system.31 Electric trains are not only more energy efficient, but they are faster, and could eventually be powered at least partially with emission-free renewable energy. By attracting travelers who otherwise would have taken cars or planes, building a high-speed rail network would be much more effective at reducing global warming emissions than our current passenger rail system. The CCAP/CNT study estimated that building the high-speed rail corridors [end page 15] planned by the federal government using fast diesel trains, with top speeds of 99 mph, would attract enough passengers to reduce U.S. global warming emissions by 6.1 billion pounds, the equivalent of taking almost 500,000 cars off the road.33 Passenger rail reduces harmful air pollution as well, especially when it is powered by electricity. For example, a passenger on an electric train in Germany produces about 93 percent less air pollution than someone traveling by car, and 91 percent less than someone making the same trip by plane.34 Although the electricity produced in the United States would create more emissions, electric trains would still be much cleaner than diesel trains, cars or planes. When tracks are upgraded for better passenger rail service, freight traffic needs are considered as well, allowing more freight trains to travel faster and with fewer delays and adding to the environmental benefits. Rail transport is much more fuel efficient than truck transport for freight—various studies estimate that train transport is three to nine times as efficient as truck transport for the same amount of freight.35 The resulting fuel savings add to the emissions reductions from improving passenger rail.

HSR trades off with cars


Peterman et al 09 --Coordinator Analyst in Transportation Policy (David Randall Peterman, Coordinator Analyst in Transportation Policy John Frittelli Specialist in Transportation Policy William J. Mallett Specialist in Transportation Policy, December 8, 2009, Congressional Research Service, “High Speed Rail (HSR) in the US” KA)

In heavily traveled and congested corridors, proponents contend that HSR will relieve highway and air traffic congestion, and, if on a separate right-of-way, may also benefit freight rail and commuter rail movements where such services share track with existing intercity passenger rail service.34 By alleviating congestion, the notion is that HSR potentially reduces the need to pay for capacity expansions in other modes. On the question of highway congestion relief, many studies estimate that HSR will have little positive effect because most highway traffic is local and the diversion of intercity trips from highway to rail will be small. In a study of HSR published in 1997, the Federal Railroad Administration (FRA) estimated that in most cases rail improvements would divert only 3-6% of intercity automobile trips. FRA noted that corridors with short average trip lengths, those under 150 miles, showed the lowest diversion rates.35 The U.S. Department of Transportation’s Inspector General (IG) found much the same thing in a more recent analysis of HSR in the Northeast Corridor. The IG examined two scenarios: Scenario 1 involved cutting rail trip times from Boston to New York from 3 1⁄2 hours to 3 hours and from New York to Washington from 3 hours to 2 1⁄2; Scenario 2 involved cutting trip times on both legs by another 1⁄2 hour over scenario 1. In both scenarios, the IG found that the improvements reduced automobile ridership along the NEC by less than 1%.36 The IG noted “automobile travel differs from air or rail travel in that it generally involves door-to-door service, offers greater flexibility in time of departure, and does not require travelers to share space with strangers. Consequently, rail travel must be extremely competitive in other dimensions, such as speed or cost, to attract automobile travelers.”37 Planners of a high speed rail link in Florida between Orlando and Tampa, a distance of about 84 miles, estimated that it would shift 11% of those driving between the two cities to the train, as well as 9% of those driving from Lakeland to either Orlando (54 miles) or Tampa (33 miles). However, because most of the traffic on the main highway linking the two cities, I-4, is not travelling between these cities, it was estimated that HSR would reduce traffic on the busiest sections of I-4 by less than 2%.38 The final environmental impact statement for the project states that the reduction in the number of vehicles resulting from the HSR system “would not be sufficient to significantly improve the LOS [level of service] on I-4, as many segments of the roadway would still be over capacity.”39 The estimated cost of the HSR line was $2.0 billion to $2.5 billion,40 or $22 million to $27 million per mile.


High speed rail trades off- Europe proves


Regional Aviation News 7 (May 2007, Regional Aviation News, http://search.proquest.com/pqrl/docview/205016092/13793A8A049491DEC35/1?accountid=11091 , “High-Speed Rail Takes Market Share from Regionals”, SS)

The greening of Europe also includes an attack on short-haul road service which is significantly impacted by the growth of high-speed rail service on the Continent and in Britain. Citing the increasing car travel hassle, European rail officials, who recently testified before the Senate, said high-speed rail is consistently winning market share form traffic. Of course, regionals would remind them that their success has come with subsidies that put auto industries at a competitive disadvantage.



Link: Rail




Rail hurts auto sector: shifts jobs overseas


Pollin and Baker 09 (Robert, Dean, " Public Investment, Industrial Policy and U.S. Economic Renewal," December 2009, Center for Economic and Policy Research, http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_201-250/WP211.pdf)

At the same time, particularly within a shorter-run framework there are problems with relying too heavily on rail systems as the primary focus of public transportation investments. The most evident shorter-term concern is that these systems require years of planning and spending before they come on line and communities enjoy the benefits. But in addition, the United States, at present, has virtually no capacity to build mass transit systems and vehicles. Subway cars used in the U.S. are supplied by French, German and Japanese companies. Other kinds of mass transit vehicles are built either in South Korea or Germany. As Jonathan Feldman (2009) reports, the U.S. was once a technological leader in this field, and could become so but this will take years of steady support in terms of research and development as well as public procurement contracts. Finally, to the extent that overall transportation funding is shifted to rail systems, this would represent an additional blow to the U.S. auto industry.





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