With all of this talk about saving Detroit and bailing out the American manufacturing industry, I am stunned that more people are not seeing the fallacy smack dab in the middle of this debate. Take a look at the proposed business plans the Big Three handed Congress last week and you will quickly see “green” technology is at the heart of their plan.

If this were a strategy submitted a decade ago, it would be understandable. Instead, it shows the utter lack of executive insight at General Motors (NYSE:GM), Ford (NYSE:F) and Chrysler. Once again, fuel prices are going one way and Detroit is heading the other. If I recall, this has happened several times before.

Granted, the proposals were submitted under a cloud of incredible political pressure, but that is no excuse for the horrific plans submitted by the Big Three.  What concerns me the most is their caving to the “green” crowd.  Mark my word.  It will be the touch of death for Detroit.

It will cost much more than $15 billion, $25 billion or even $35 billion in government funding to get Detroit producing high-demand green vehicles. For proof, all we have to do is head to another section of Washington.

Won’t somebody please pay attention to us

Last week, the Electric Drive Transportation Association held an expo at the Washington Convention Center. Walk around the floor of the show and you will see booths from operations as small as mom-and-pop shops to as large as the folks pleading to Washington.

The theme throughout the exhibition hall is unified; the industry will not survive without the help of Washington. The industry association is calling for increased tax incentives and government assistance programs. Most of all, it wants the federal government to lead the charge by converting its more than half a million vehicles to green models.

In other words, the free market will not allow the industry to grow and expand, so Uncle Sam should intervene. We all know that line of thought will only lead to trouble.

As investors, there is a strong tendency to want to invest in the “greening” of America. But time and time again, the market has knocked the industry to its knees.

For long-term buy-and-hold investors, the industry is an absolute death trap. For speculative investors with the stomach to stand incredible undulations, there is some profit opportunity, but you had better sleep with a buy and sell button under your pillow.

The fact that Detroit is caving to the government’s pressure is a surefire sign of desperation. Detroit will get its money this week, but it will be a mere pittance of what the industry needs if it wants to succeed.

If the nation wants a green economy, let the free market dictate the winners. Trying to transform General Motors into a producer of “green” technology is the equivalent of asking Exxon Mobil (NYSE:XOM) to start drilling for spring water. It is not going to happen.

Uncle Sam needs to sit down and let the free markets take charge. If he doesn’t, I have a feeling somebody will knock him down.

Source: Going “Green” will Destroy Detroit