Detroit, Gas-Guzzlers, and War
Scott Burns writes a financial column for the Dallas Morning News. He recently took a small departure and accused the Detroit car-makers of being a threat to national security. I'd like to hear your opinion about his ideas. Full disclosure: I drive a 1994 Honda Civic that gets 37 mpg. Before that, I drove a 1983 Honda Civic. Clearly I do not share some Americans' taste for large or luxurious transportation.
Security threat: Detroit
Nearly 35 years ago, General Motors Corp. asked a consulting firm to examine a problem.
Imported cars, mostly Japanese, had captured 25 percent of the California car market. GM management was worried. The Big Three still had 90 percent of the national market, but top brass at GM saw California as the future.
So the study was done.
Today, General Motors' market share is down to 25 percent nationally. The Big Three have seen their share shrink to 57 percent.
Our domestic automakers, including Ford and Chrysler, have lacked foresight and innovation for so long that they are now fighting to hold market share in the big categories essential for survival: midsize cars, sport utility vehicles and minivans.
Management will blame this on intractable labor costs. Although labor costs are definitely a problem, it's time to consider a larger problem: Intractable Bonehead Management.
The same Japanese managers derided for their conformity and slow decision-making are eating Detroit's breakfast, lunch and dinner. That's a management problem.
Today, GM and Ford are well positioned to be dinosaurs. So is Chrysler. Worse, they are threats to national security.
How is this happening?
Here are three main thrusts:
• The industry has consistently lobbied against any changes to the Corporate Average Fuel Efficiency, or CAFE, rules, even as our dependence on imported energy has increased. The domestic carmakers talk about a global industry but have acted as though the United States was peculiarly immune to rising energy costs. One side effect is that domestic cars are unsuited for foreign markets because foreign markets are geared to fuel efficiency.
• The industry has focused its profitability on gas guzzlers that are supersized – like the Hummer H2 (10/13 mpg), the Lincoln Navigator (13/18 mpg), the Chevrolet Suburban (14/18 mpg) and the Cadillac Escalade ESV (13/17 mpg) – or on an array of super-muscle cars that are remarkably fuel-efficient relative to their forebears but still send plenty of money to the Middle East.
• Rather than innovate and invest in hybrid technology, as Toyota and Honda have done, the industry has repeatedly labeled the most successful car introduction in a decade as a "niche market" car. Ford, belatedly, is licensing Toyota technology for its first hybrid.
When fuel efficiency becomes crucial, American consumers will have two ugly choices: Send enormous amounts of money to the Middle East for oil or send enormous amounts of money to Japan for efficient cars.
The consequences of all this are neither good for the country nor pleasant. As some talk about $3 gasoline by summer, no remedies are available in auto dealers' showrooms and lots. That's a pretty good reason to brand GM, Ford and Chrysler as major risks to national security.
Is there something we can do?
I believe there is.
A recent survey showed that two out of three Americans, including NASCAR fans and conservatives, think buying more fuel-efficient cars is patriotic. Skeptics should check out www.40mpg.org, a new organization devoted to convincing the other boneheads – the ones in Congress – that government-enforced higher fuel-efficiency standards are essential.
Conservatives have regularly defeated efforts to raise the CAFE standards, arguing against government intrusion in the private economy. I consider myself a conservative, but it's time to recognize that our national security is being threatened by Detroit.
The 40mpg Web site offers an online calculator that shows the benefits of moving from any mileage you enter to 40 mpg. You can also check the three online calculators at http://www.scottburns.com/ to see the economic benefits of driving a more fuel-efficient car.
What do you think? This was written by a conservative--is it time to rethink our Hummers?
Security threat: Detroit
Nearly 35 years ago, General Motors Corp. asked a consulting firm to examine a problem.
Imported cars, mostly Japanese, had captured 25 percent of the California car market. GM management was worried. The Big Three still had 90 percent of the national market, but top brass at GM saw California as the future.
So the study was done.
Today, General Motors' market share is down to 25 percent nationally. The Big Three have seen their share shrink to 57 percent.
Our domestic automakers, including Ford and Chrysler, have lacked foresight and innovation for so long that they are now fighting to hold market share in the big categories essential for survival: midsize cars, sport utility vehicles and minivans.
Management will blame this on intractable labor costs. Although labor costs are definitely a problem, it's time to consider a larger problem: Intractable Bonehead Management.
The same Japanese managers derided for their conformity and slow decision-making are eating Detroit's breakfast, lunch and dinner. That's a management problem.
Today, GM and Ford are well positioned to be dinosaurs. So is Chrysler. Worse, they are threats to national security.
How is this happening?
Here are three main thrusts:
• The industry has consistently lobbied against any changes to the Corporate Average Fuel Efficiency, or CAFE, rules, even as our dependence on imported energy has increased. The domestic carmakers talk about a global industry but have acted as though the United States was peculiarly immune to rising energy costs. One side effect is that domestic cars are unsuited for foreign markets because foreign markets are geared to fuel efficiency.
• The industry has focused its profitability on gas guzzlers that are supersized – like the Hummer H2 (10/13 mpg), the Lincoln Navigator (13/18 mpg), the Chevrolet Suburban (14/18 mpg) and the Cadillac Escalade ESV (13/17 mpg) – or on an array of super-muscle cars that are remarkably fuel-efficient relative to their forebears but still send plenty of money to the Middle East.
• Rather than innovate and invest in hybrid technology, as Toyota and Honda have done, the industry has repeatedly labeled the most successful car introduction in a decade as a "niche market" car. Ford, belatedly, is licensing Toyota technology for its first hybrid.
When fuel efficiency becomes crucial, American consumers will have two ugly choices: Send enormous amounts of money to the Middle East for oil or send enormous amounts of money to Japan for efficient cars.
The consequences of all this are neither good for the country nor pleasant. As some talk about $3 gasoline by summer, no remedies are available in auto dealers' showrooms and lots. That's a pretty good reason to brand GM, Ford and Chrysler as major risks to national security.
Is there something we can do?
I believe there is.
A recent survey showed that two out of three Americans, including NASCAR fans and conservatives, think buying more fuel-efficient cars is patriotic. Skeptics should check out www.40mpg.org, a new organization devoted to convincing the other boneheads – the ones in Congress – that government-enforced higher fuel-efficiency standards are essential.
Conservatives have regularly defeated efforts to raise the CAFE standards, arguing against government intrusion in the private economy. I consider myself a conservative, but it's time to recognize that our national security is being threatened by Detroit.
The 40mpg Web site offers an online calculator that shows the benefits of moving from any mileage you enter to 40 mpg. You can also check the three online calculators at http://www.scottburns.com/ to see the economic benefits of driving a more fuel-efficient car.
What do you think? This was written by a conservative--is it time to rethink our Hummers?
posted by English Professor | 9:22 AM
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