Nearly 35 years ago General Motors 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. While the Big Three still had 90 percent of the national market, the top brass at GM saw California as the future.
So they had the problem studied.
Today, General Motor’s market share is down to 25 percent. The Big Three have seen their share shrink to 57 percent. Our domestic car makers (including Chrysler) have lacked foresight and innovation for so long they are now fighting to hold market share in the big categories essential for survival: mid-size cars, SUVs, and minivans.
Management will blame this on intractable labor costs. While labor costs are definitely a problem, it’s time to consider a larger problem: Intractable Bonehead Management.
The same Japanese managements that are derided for their conformity and slow decision-making are eating Detroit’s breakfast, lunch, and dinner. That’s a management problem.
Today, General Motors 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 (C.A.F.E.) 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 either Super-sized, like the Hummer 2 (10/13 mpg), the Lincoln Navigator (13/18), the Chevrolet Suburban (14/18), and the Cadillac Escalade ESV (13/17) — or on an array of Super-muscle cars that are remarkably fuel efficient relative to their forebears but still send plenty of money to bomb throwers in 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 new 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 dealer showrooms and lots. That’s a pretty good reason to brand General Motors, 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 C.A.F.E. 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 website offers an online calculator that shows the benefits of moving from any mileage you put in to 40 mpg. You can also check the three online calculators on my website, www.scottburns.com, to see the economic benefits of driving a more fuel efficient car.
—————————
More!
The 40mpg.org website
http://www.40mpg.org
The 40mpg.org calculator
http://www.40mpg.org/calc/calc.cfm
Sunday, September 5, 2004: Wallets running on empty (with URL to online calculator #3)
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2004/stories/090404dnbusburns.5a647.html
Tuesday, August 24, 2004: Burn less gas without spending more cash: (with URL to online calculator #2)
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2004/stories/082404dnbusburns.a9401.html
Tuesday, August 10, 2004: New Investment Vehicle Could Burn Less Money (with URL to online calculator #1)
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2004/stories/081004dnbusburns.166eb.html
Tuesday, April 27, 2004: Liberty from Gas Pumps
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2004/stories/042704dnbusburns.a01ac.html
Sunday, March 28, 2004: Toyota’s newest hybrid is a ‘lite’ drivers dream come true
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2004/stories/032804dnbizburnsside.69b17.html
Tuesday, April 15, 2003: My own energy policy could be the answer (note: wrong date on website, its 2003, not 2004)
http://www.dallasnews.com/s/dws/bus/scottburns/columns/2003/stories/041503dnbusburns.788c.html
Sunday, April 13, 2003: Steering Toward Hybrids
http://www.dallasnews.com/s/dws/bus/scottburns/columns/2003/stories/041303dnbusburns.88f7b.html
———————————————————————————————–
This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.
(c) Scott Burns, 2022