By on June 7, 2007

portlandmuseum.jpgOn Tuesday, Detroit's top execs made another pilgrimage to Washington, D.C. The Detroit News reported that the troubled troika all arrived at Capitol Hill in fuel-efficient vehicles as a "symbolic gesture." Mulally belted across the Beltway in a Ford Escape hybrid. Wagoner wheeled up in a hybrid Saturn Aura. And LaSorda made the scene in a flex-fuel Town & Country minivan. Of course, none of these vehicles are their makers' most frugal cars. However, we can't have America's automotive aristocrats getting off their fuel-sucking private corporate jets and jumping into a run-of-the-mill Aveo, Focus or Caliber, now can we?

The hypocrisy is stunning. Lest we forget, when the Toyota Prius first whirred into view, Detroit dismissed the gas-electric hybrid vehicle as a meaningless PR stunt. And now, two out of three American automotive magnates cloak themselves in hybrid hype to convince Washington they're down with the whole hi-tech gas-saving thing. You know; now that they want some help competing on a "level playing field" with those tricky transplants. Again. Still.

Of course, this kind of running-on-empty automotive gesture is hardly restricted to Michigan's golden parachute-clad corporate con artists. No Hollywood star worth his or her Oprah confessional would dare show up at a red carpet event in a gas guzzler. They leave their multi-thousand-square-foot homes, heated pools and garaged exotics to make the scene in the latest hybrid or electric trendmobile- just in case anyone questions their environmental credentials. 

Likewise, politicians. Last month, Senator Barak Obama harangued the Detroit Economic Club with a scathing condemnation of the U.S. auto industry. The Democratic Presidential hopeful accused The Big 2.8 of unconscionable foot-dragging on CAFE standards. According to the man who would be President, Detroit's "spending millions to prevent the very reform that could've saved their industry" and "spending their time investing in bigger, faster cars." 

Almost as soon as Obama's anti-Detroit bombshell hit the PR newswires, hometown reporters revealed the inconvenient truth about the pol's garage, filled as it was with a Chrysler 300C. The Senator duly ditched his Hemified whip for a Ford Escape Hybrid.

No surprise there. The Missouri-made Escape Hybrid and its corporate clone (the Mercury Mariner Hybrid) are the politicos' gesturemobiles du jour. When she's not being ferried about in an armored Cadillac or Chevy Suburban, Hillary Clinton (well, actually, hubby Bill) drives a refrigerator-equipped Mariner Hybrid. John Edwards and Al Gore both keep the planet cool (warm?) with their Escape Hybrids. 

At least that's what their PR folks say. One wonders how much time our democratically-elected leaders spend in these cramped hybrids in lieu of the limos, SUVs and staff cars that transport these prodigious pork barrel purveyors around town, and block the streets around Capitol Hill.

And onto those storied streets drove Rick, Alan, and Tom, trying to neuter legislation designed to force them to build more fuel-efficient vehicles, like the ones they were driving. The heads of GM, Ford and Chryslerberus know they can't stop increases in the fuel economy standards. All they can do is minimize the federal minimum so they can keep selling more profitable gas guzzling trucks and SUVs have the time they need to engineer more fuel-efficient vehicles, like the ones they were driving. 

Rick Wagoner more or less admitted that the mandatory fuel economy gig was up. The GM lifer told long-suffering GM stockholders that it was time to move on to the other bulges in the Gordian knot strangling The General. "It looks like… it's very likely there will be increases in CAFE… Let's make sure that we also fix the real problems while we're doing that."

By "real problems," Rick was alluding to his company's [self-inflicted] unsustainable cost structure and ongoing failure to maintain domestic market share- problems shared by his friends indeed.

So… bad boys, bad boys, whatcha gonna do? More specifically, what the Hell are you doing in DC when you should at home figuring out how to build products consumers want to buy at a price that makes you enough money so you can sort this out yourself?

Of course, Detroit's corporate lions prefer maintaining the status quo and jetting to Washington on someone else's dime. They're old pros at pressing the flesh at the center of an enormous bureaucracy; a bureacracy that sees nothing wrong with running-up massive debts, mortgaging their constituents' future to protect their own short term interests.

If CEOs Rick Wagoner, Alan Mulally and Tom LaSorda wanted to make an effective symbolic gesture, they should have driven from Detroit to Washington and back in an Aveo, Focus, or Caliber.

By enduring 1000 miles in those noisy, cramped, cheap cars– byproducts of their bean-counted design and engineering processes– they'd tell the world that their very best fuel-sipping products are good enough for government work. How appropriate is that?

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57 Comments on “Pilgrims’ Progress: GM, Ford and Chrysler’s CEOs Have a Capitol Idea...”


  • avatar
    GS650G

    maybe if these CEOs were to spend more time overseas and see how the rest of the world deals with expensive personal transportation cost they would see the light.

    Toyota is going to own one of these three before it’s all over one way or another.

  • avatar
    lprocter1982

    Why the hell would Toyota want to own a failing, miserable, and utterly irrelevant auto manufacturing company?

  • avatar
    guyincognito

    Hypocrisy? How about how Al Gore owns the company he buys carbon credits from? http://www.generationim.com/about/team.html

    “If CEOs Rick Wagoner, Alan Mulally and Tom LaSorda wanted to make an effective symbolic gesture, they should have driven from Detroit to Washington and back in an Aveo, Focus, or Caliber.

    By enduring 1000 miles in those noisy, cramped, cheap, slothful, joyless cars– byproducts of their bean-counted design and engineering processes– they’d tell the world that their very best fuel-sipping products are good enough for government work. How appropriate is that?”

    Wagoner,Mulally,LaSorda/pwnd

  • avatar

    This takes me back to my SAAB&GM days – and I’ve bothered people with that before, so I’ll keep this short.
    Every single one of the decisions GM made as far as Saab was concerned, was made from a conviction that it was right given the goal of growing sales and the brand.
    Every single one of those decisions was wrong for Saab. They may have been right for another kind of car, but they were wrong because GM stubbornly refused to accept “the essence of Saab.”

    A couple of years ago they were laughing at the Prius. Now they’re making do with jerry-rigged alternatives and making empty political gestures. With the exception of Mulally, who’s the new kid in town: how is it possible for management at these companies to retain their jobs? They obviously can’t be trusted to look even 24 months into the future, which means they’re at least a year or two short of a product development cycle.
    Yet they are unstoppable with their drivel. If they want to survive, they shouldn’t be waiting for politically driven standards to force them to build the cars people want — they should already be building them.

  • avatar
    OverheadCam9000

    In all reality, GM, Ford and Cerebler (DCX) can’t build any vehicle that is acceptable to the Politburo. California Atty. Gen. Jerry “Moonbeam” Brown has said as much. With Rep. Pelosi on board, this game is unwinnable by Detroit.

    So, give’em what they want, in bucket-fuls.

    To wit: Buick is making GM big (insert currency here) in the PRC. Why mess around with North America? Just pack it up and LEAVE!

    Ford could flee to Europe, survive and thrive.

    Cerebler could be relocated to Austria and be built under contract by Magna.

    Once free of the death grip of the UAW and the Empire, the old Detroit gang could actually build decent cars, in profitable quantities (for the Chinese and Europeans).

    For the PRNA (People’s Republic of North America), sell them bicycles!

  • avatar
    shaker

    Foreign Automakers: Proactive
    Domestic Automakers: Reactive
    They just don’t get it, do they?

  • avatar
    labrat

    No argument here regarding the hypocrisy of the politicos regarding environmental/ fuel independence issues. However, I don't think it's fair to say the same thing about the Big 2.8 execs. In the nineties, GM took the lead with electric vehicles and came to market with the EV-1. The project cost was something in the neighborhood of $1 billion. Sure, the range was limited, but nobody else had a better solution at the time. Unfortunately for them, there was little interest at the time in such vehicles, with the exception of the environmental fringe, which was much smaller then. For the rest of America, gas was cheap and trucks ruled. The EV-1 was cancelled, which given the info available at the time, was a decision that seemed to make sense. The Big 2.8 execs may have scoffed at the Toyonda hybrids when they appeared quietly on the scene in the late nineties, but remember, this was before 9-11, before the Iraq war, before $3+/gal gas. These types of events will change the public's opinion in a big way. The domestics have since realized that they must adapt to a new reality, and are doing so; nothing wrong with that. I wish them luck. Also, I'm into my third day with an Aveo rent-a-turd while my car is getting fixed, and I'm having a ball. Not bad off road either, but that's another rant.

  • avatar

    @labrat

    Sorry, but I can’t agree with your version of the EV-1 story. GM had that car, and Ford was tinkering with THINK. Both models were developed to meet the California requirement that carmakers should have alternative fuels/EV vehicles in their portfolio if they wished to sell cars in that state. After 2001, that requirement was dropped, and the EVs disappeared from GM and Ford faster than you can count to one. GM actually ripped them out of the hands of customers who wanted to keep theirs – but the cars were made available on an “instant recall” basis, should GM wish to do so. Yes, they developed the vehicle, but they never put a serious effort behind it.
    They should have – instead of going to court to keep people from driving theirs around.

  • avatar

    OK, let’s see here: The EV-1 comes out, sells (ok, leases) bloody few copies, even to those hard-core environmentalists who are claiming that this is the car that the 2.8 SHOULD be making (little bit of hypocrisy here?), and then CARB dumps the rule that motivates putting them on the road in the first place. So the company dumped the car.

    Uh, not selling, losing money, now not legislatively necessary, so can production. Sounds like one of the few business smart decisions GM’s made in the last decade and a half. So it’s a good business decision, but a bad PR and political decision – so we still have a reason to keep the constant pillorying of GM going.

    Which is a shame, I really wanted to see the EV-1 take off. And I REALLY want to see the Volt happen.

  • avatar

    Stein X Leikanger: “how is it possible for management at these companies to retain their jobs”

    It is reprehensible that there has been virtually no accountability on the part of management for the big three. I wonder if GM goes under will it actually be a shock to the board of directors.

  • avatar
    whitenose

    labrat:
    – Shortsightedness is pervasive in American business, but it’s not an excuse. People paid to steer the corporate ship, especially ones bloated with cash, should have detailed plans worked out for any eventuality, and probably several of them already running in parallel. Who’s taken the lead in alternative fuel/engine development? BMW, Honda, Toyota, Mercedes. “Flex-fuel” is fine, but the future isn’t ethanol; we can’t produce enough corn to make it so.

    – The failed EV-1 project cost less than GM originally spent creating Saturn. And they never followed up.

    – The Big 2.8 aren’t in trouble because they failed to adapt to a post-9/11 world. They’re in trouble because they made crap cars for three decades and then tried to get Washington to give them corporate welfare (like big agribusiness — ConAgra and ADM) instead of fixing the product and investing in the future. I’ll believe they’re serious about fixing the problem when I see one car, just one, that’s better than or equal to an Accord in every way. BMW? One can dream.

  • avatar
    shaker

    If I’m not mistaken, the EV-1 program was started because California put in place a mandate for zero-emission vehicles at the time. When GM started the program they may have seen the “writing on the wall”, but did everything (along with Big Oil and certain politicians) they could to reverse the legislation. Once done, they reaclled all of the cars (which could only be leased — hmmm) and eventually destroyed them, over the vehement protests of their (admittedly tree-hugging actor-types) lessors. Everyone who drove one loved it despite of its limitations, but all GM wanted was “business as usual” (due to oil company pressure) so they killed it. Had GM alloed the car to succeed, there would have no doubt been upheaval in the auto manufactring and oil industries, but the end result would have been the existance today of a technically advanced electric vehicle, new industry based on batteries/control systems, a less profitable oil industry (with lower gas prices for the non-electric drivers)… IMHO.

  • avatar
    whitenose

    In all reality, GM, Ford and Cerebler (DCX) can’t build any vehicle that is acceptable to the Politburo. California Atty. Gen. Jerry “Moonbeam” Brown has said as much. With Rep. Pelosi on board, this game is unwinnable by Detroit. Oh,  please. Don't scapegoat the treehuggers — the Dems have been reliably supportive of the big 3 in the past. Michigan is Dem tetrritory. They're getting just as much, or more, shit from the wingnuttiest Republicans as they are from Democrats. And historically (pre-"Roger and Me"), the shit has been flung exclusively from Republicans. A Dem congress + Dem President bailed out Chrysler. Had they been a year later, during the Reagan Administration, Chrysler would have gone bankrupt and the Big 3 situation would be very different today. (Better or worse, I don't know, but certainly different.)

  • avatar

    labrat: The Big 2.8 execs may have scoffed at the Toyonda hybrids when they appeared quietly on the scene in the late nineties, but remember, this was before 9-11, before the Iraq war, before $3+/gal gas. These types of events will change the public’s opinion in a big way. The domestics have since realized that they must adapt to a new reality, and are doing so; nothing wrong with that. I wish them luck.

    Thing is, their “early warning radar” should have lit up like a Christmas tree far sooner than 9/11.

    In the U.S., the first warning was the 1973 oil crisis.

    The second was the 1979 energy crisis.

    A shorter, but plausable third shot across thier collective bows came with the oil price increase of 1990.

    Events post 11 September 2001, (Iraq war, $3+ gas) make for a 4th warning.

    whitenose: – The Big 2.8 aren’t in trouble because they failed to adapt to a post-9/11 world.

    Exactly. They failed to adapt a long time ago.

    How many will body slams to the mat will it take before they come out with competitive fuel-efficient cars? It may be too late. Perhaps they’ve fallen and can’t get up to fight another round.

    I wish them luck.

    As do many of us here. They’ll need plenty of it.

  • avatar
    jthorner

    It frustrates me to no end when people argue that the runup in fuel prices was impossible to forsee. Funny how Honda and Toyota engineering and management folks had no trouble preparing for this impossible to forsee event, eh?

    Maybe the problem is that the Japanese executives aren’t paid nearly enough what with their pay packages that average 1/10th of what the 2.8 executives have been stealing from the corporate pot.

  • avatar
    skor

    Jets don’t run on avgas, piston engined planes use avgas. Jets use jet fuel, such as JET A, which is kerosene based.

  • avatar

    skor: Jets don’t run on avgas, piston engined planes use avgas. Jets use jet fuel, such as JET A, which is kerosene based.

    Noted and corrected. Thanks.

  • avatar
    wludavid

    They all live in Detroit right? I wonder if they jet-pooled.

  • avatar
    FunkyD

    There is a documentary called “Who Killed the Electric Car” that sheds some light on the EV-1 story. It has a typical tree-hugger bias, but raises some interesing points. It accuses GM of not wanting the EV-1 to succeed, instead marketing it weakly to appear to meet the California mandate, while all the long trying to keep demand supressed enought to argue for the mandate’s elimination.

    It also points some accusatory fingers at Ford, Toyota, and Honda, but the EV-1 was the poster child for the death of the electric car.

  • avatar
    indi500fan

    “They all live in Detroit right?”

    Wagoner and LaSorda do. Not sure about Boeing Boy.

    GM’s hedging on a Hillary win, they’ve got Erskine Bowles on the BoD.

  • avatar
    ex-dtw

    To all the comments that the Big 2.8 are short sighted dimwits – scapegoating and armchair QB’ing is just so easy.

    Sure they have lacked vision in the past but most of that has been changed wth the excpetion of GM. Ricky has done “just” enough things right in the Board of Bystanders view to hang on, ie. flexible mfg, line improvement, marginal union givebacks, etc.

    The point that most people miss is that Hybrids are a no win situation – case in point, the Honda Accord. Toyota is making a go, not because it makes financial sense, but beacause they have the cash to waste on this genius of a marketing boondoggle. The doms just don’t have that kind of cash to throw around putting them into this inescapable death cycle. It is a no win situation and few people even acknoledge that.

    Big 2.8 quality is up, plant efficiency is up (see recent JD Power and Harour report), styling is questionable but turning around, I think someone the other day rightfully blames Toyota for this misadventure, but things are changing. Maybe not quick enough but just because the Bad Boys are in DC fighting to keep from having more crap fall on them when they don’t have the cash to weather the storm shouldn’t be held against them.

    By not being in DC the foreigns are seen to think that bad CAFE legislation just doesn’t matter. Truth is, it looks better for them not to care and if it does happen they have the cash to whether it, just long enough. Insert old joke about the 2 campers and the bear. Everyone knows these day the Big 2.8 have a bad ankle at a minimum, possibly a broken leg.

  • avatar

    jthorner:

    It frustrates me to no end when people argue that the runup in fuel prices was impossible to forsee. Funny how Honda and Toyota engineering and management folks had no trouble preparing for this impossible to forsee event, eh?

    I think Toyota & Honda were in the right place at the right time. Being global companies, they sell the same cars in Asia (where lack of space means small cars rule) and Europe (where 100% gas tax means small frugal cars rule). GM’s domestic brands sell solely in North America where there’s loads of space and minimal gas tax. The Japanese were in fact transitioning to US style luxobarges (Lexus, Acura etc.) and proliferation of SUV’s, but when the crunch hit they still had their small world cars to fall back on. After decades of catering purely to American tastes of big-is-beautiful, the sudden consumer emphasis on efficiency has caught the domestics up sh*t creek without a paddle. The truth is, all the Big 3 have vehicles in all markets, just not the same vehicles in all markets. Their failure/inability to market global cars in global brands is their greatest shortcoming.

  • avatar
    Steve_S

    GM and it’s counterparts can not make small fuel efficient cars and make money. If you can’t make money there is no incentive to build it. It was either build high margin SUV’s which people wanted and be profitable or go head-to-head with the UAW to allow you to make small cars and make a profit. Obviously they all took the easy road and are paying for it now.

    Honda is coming out this year or next year with a diesel, 50 state compliant Accord that gets over 50mpg. Looks real bad for the Bigish 3.

    The CAW is offering fightin words so it going to be an interesting 1-2 years.

    “I say to them, you better find a G** damn product for Windsor or we’ll take all of the General Motors corporation down in September 2008. General Motors workers have earned the commitment, especially in Windsor.”

    “If there’s a strike, it’s the whole GM chain that’s out, not just one plant.”

    -Buzz Hargrove

    “General Motors is the enemy, brothers and sisters. At the end of the day, GM made a decision to put your jobs in jeopardy. Don’t let General Motors divide our solidarity, because if they do, they win.”

    “This Windsor Transmission plant will be top on our agenda. It’s going to be our objective to force General Motors to put a product in that plant. If they don’t, then we’ll take action. If it takes a strike in Canada to get their attention, that’s exactly what we’re going to be doing. The Windsor membership has the full support of GM members across the country.”

    -Chris Buckley

  • avatar

    @sykerocker

    The Toyota Prius must have looked like a terrible business proposition for several years, and who knows whether they have reached the point where they are getting a return on their R&D investment on HSD yet. (It’s quite another thing that Toyota’s gotten oodles of goodwill PR from the model).

    Point being that GM didn’t follow through, as usual. They didn’t look into the future, which is something they are world class incapable of.
    Toyota did.

  • avatar
    starlightmica

    Fark Headline today: Toyota worldwide hybrid sales top 1 million, worldwide category 5 smug alert issued

  • avatar
    Orian

    guyincognito:
    June 7th, 2007 at 7:52 am

    Hypocrisy? How about how Al Gore owns the company he buys carbon credits from? http://www.generationim.com/about/team.html

    Um, no, Al Gore does NOT own said company. He is one of the founders. There’s a really big difference there. Not a good idea to link to it when it clearly states he was one 6 founding partners and then claim he owns it.

  • avatar

    Please note that GM products that have traditionally sold well in America do not sell well in Europe and Asia because they’re too thirsty and too big. This is a result of having cheap gas (which is changing) and a country that is huge compared to most Asian and European equivalents (which is probably not going to change).

    So the “genius” of Toyota, Nissan, Honda, et. al. is an ability to move a small country/expensive gas model to American, while the American company has to start from scratch. And yeah, when they did design a small car, it was usually second-rate, mainly because they knew that any demand for that vehicle would be short-lived until the conditions that made it worth considering had gone away, at which time most of their clientèle would go back to the usual big stuff.

    Short sighted? Probably. But hindsight (especially in our cases) is twenty-twenty and incredibly cheap. Now, if any of us could have predicted $3-4.00/gallon gas, and managed to sell it to the American companies, well, said people would certainly be taking a nice early retirement.

    Of course, before we could sell that idea to the dunder-headed big 2.8, we’d first have to have convincingly come up with it ourselves, and be able to conclusively prove it.

    Keep in mind one bad shortcoming of the American car companies that ISN’T necessarily the fault of those idiots in the top offices: They report to the stockholders. Those same people who want this quarter’s dividend to be up, and aren’t about to listen to any talk about long term strategies, etc. To them, 90 days is a long term strategy. And management responds accordingly.

    So no, they don’t think to the far future because it could be financially disastrous in the short term. And there’s a basic cancer in the whole system. This is why I’m watching the Ceberus takeover so closely. Finally one of the three will have a chance to break the mold.

  • avatar
    mrdweeb

    Photo: Larry, Curly, Moe (and Ron)
    http://www.washingtonpost.com/wp-dyn/content/article/2007/06/06/AR2007060602492.html

  • avatar
    labrat

    To those of you that are basing your opinions on the movie “Who Killed the Electric Car”, please be informed that after the message was out and the money was made, the producer came forth and admitted that he was unduly harsh on GM and that he is now fully backing their efforts to get the Volt to market. Sounds to me that the contents of the movie are maybe 40% fact, 60% spin. I find it incomprehensible that a company will spend upwards of $1b on something and actually want it to fail.

    I can’t wait for the Volt, if only for it to silence the critics. It will be real, and it will be spectacular.

  • avatar
    LAcommuter

    They each drove up in separate cars?? How much fuel did that use?. If the statement was really about personal responsibility, then they all should have shared a full-size van with room for 3 CEO’s, plus underlings. This was a marketing gimmic. The problem about domestic vs. foreign is one of perception – something that has appeared before in TTAC. Currently, for most people foreign = better/greener; domestic = shoddy/non-environmental.

    AS for electric vehicles, they have to get their power from something and that might well be a fossil-fuel fired power plant since the charging outlet on the wall doesn’t really care where the power comes from.

  • avatar
    oboylepr

    Excellent well reasoned article Frank, as always. Thanks. The fact that none of these guys had enough sense to distance themselves from such a pathetic PR stunt just shows how out of touch they are with the realities of their industry. I wonder if Alan misses Boeing yet? Now there’s an American Company that knows it’s business, it’s market and it’s customers. The new 787 is taking the world by storm. It can be done.

  • avatar
    windswords

    Orian:
    June 7th, 2007 at 12:16 pm

    “Um, no, Al Gore does NOT own said company. He is one of the founders. There’s a really big difference there. Not a good idea to link to it when it clearly states he was one 6 founding partners and then claim he owns it. ”

    Um, yes, according to these definitions of “partner” (founding partner just means you were a partner from the beginning of the business):

    Definitions of Business Partner on the Web:
    means an individual who is involved, as a partner, with you in a legal general partnership and shares in the management of the business

    http://www.insuremytrip.com/popup/bus_part_def.html
    Who is a Business Partner?

    A partner who ordinarily takes part in the daily operations of the business, shares in the profits and loses, and is personally responsible for the partnership’s debts and liabilities.

    © 2000-2007 IMT Services Corporation

    http://www.investorwords.com/3609/partnership.html
    …in a partnership the partners share equal responsibility for the company’s profits and losses, and its debts and liabilities.

    Partnership
    Contract between two or more people in a joint business who agree to pool their funds and talent and share in the profits and losses of the enterprise.

  • avatar
    Luther

    In a sane/adult society, Hargrove would be in jail for his threats of violence…And NO doubt Mulally regrets his move to Ford. He does not want to be CEO when Ford goes Chapter 11…Who would?

    GM’s best effort to date are the new Lambda vehicles which are the most fuel efficient 8-passenger gasoline-powered vehicles on planet earth. Tell me, how would you all make them more fuel efficient at a price the consumer is willing to pay? Keep in mind emissions laws, crash safety laws, performance issues, (people are already complaining about under-power and transmission shift quality) and physical reality. A $15K hybrid system to gain 4 MPG is not realistic and diesel, as much as I like them, most people don’t because of the smell (washing diesel-stink off your hands/shoes/carpet/clothes kinda sucks)

  • avatar

    “I can’t wait for the Volt, if only for it to silence the critics. It will be real, and it will be spectacular.”

    Come on until it gets here its not real. It may or may not be spectacular. By the time it get here how much of Toyota’s fleet will have hybrid models. Will Honda have their fuel cell car in a working form by then. Who will have diesel models available in passenger cars in the US first Honda or GM? People are critical for GM for a reason. For a huge company they sure do seem to get caught off guard all the time.

    Luther this critic has witnessed the “it can’t be done” pronouncements from GM for decades. Remember when Honda put their cylinder heads on a GM engine before congress and it passed the proposed emissions requirements without a catalytic converter.

    I am going to watch Toyota put hybrids across their model line up and it won’t be no 15 k premium. The reason is they don’t give up and blame the government or consumers. You come up with the technology, you perfect the technology and you work the costs down through actual production over time.

  • avatar
    KixStart

    GM put a $billion in the EV-1? C’mon… it was a cheesy little car filled with K-Mart lead-acid batteries. They blew a $billion on that?

    I doubt it. They may have written off a $billion but they probably pulled in expenses from all over the company that had little or nothing to do with the EV-1.

    They also sucked in money from the Clinton Administration’s Partnership for a New Generation of Vehicles and the United States Advanced Battery Consortium (source: Wiki).

  • avatar
    tms1999

    Let the market fix the fuel efficiency problem. It’s pretty obvious that people do what they want, sometimes regardless of the law (and in this case, the law does not apply to people). Let the price of gas go up, and then magically fuel efficiency will go up.

    In a country where most people run credit card debt, sensitivity to gas prices are mostly psychological (when your morning coffee costs more than the gas for your daily commute…) and that’s the best way to scare people into more fuel efficient cars, fueling demand (pun intended?) for those fuel efficient cars.

    The current price structure of the automotive market clearly shows people’s priorities. It’s not the fuel efficient cars that cost more. Actually, it’s the gas guzzlers.

    Keep pushing the price of gas up (we need sustained $4.5+/gal) and the trend will reverse. Fuel efficient cars will demand more money. Look at the Prius, econos*** box, 23+ grands.

  • avatar
    Luther

    Opps. Your right…My calculation was off by a factor of two. $7.5K not $15K.

    But still. Payback at $3.00 per gallon is about 10 years.

  • avatar
    windswords

    whitenose:
    June 7th, 2007 at 9:36 am

    “Oh, please. Don’t scapegoat the treehuggers — the Dems have been reliably supportive of the big 3 in the past. Michigan is Dem tetrritory.”…

    Apparently, not Dem enough…

    From http://www.autoextremist.com:
    “House Speaker Nancy Pelosi will not meet with the head honchos from Chrysler, Ford and GM in Washington, D.C., today due to a “scheduling conflict” according to The Detroit News. Pelosi, who has just returned from a field trip to see melting glaciers in Greenland, couldn’t be bothered, apparently. The car company leaders and their PR staffs shouldn’t be surprised by this, of course, because if it were up to Pelosi we’d all be driving rolling balsa wood gliders powered by a big propeller, rubber bands – and a smile.”

    …”A Dem congress + Dem President bailed out Chrysler. Had they been a year later, during the Reagan Administration, Chrysler would have gone bankrupt and the Big 3 situation would be very different today. (Better or worse, I don’t know, but certainly different.) ”

    We will never know for certain what would have happened. For one congress was still under Democratic control. But this is a common misconception that the US government “bailed out” Chrysler. What the government did was guarantee the loans from private banks to Chrysler, which paid the loans off early with interest.

    Bailout:
    A rescue from financial difficulties: corporate bailouts.

    A rescue, usually of a financial nature.
    A “bailout” is an emergency rescue, while to “bail out” is to provide emergency relief.

    The S&L bailout was a bailout – the taxpyers ponied up the money to make the accounts solvent.

    Loan guarantee:
    A statutory commitment by the federal government to pay part or all of a loan’s principal and interest to a lender or the holder of a security in case the borrower defaults.

    Any Guarantee, insurance, or other pledge with respect to the payment of all or part of the principal or interest on any debt obligation of a non-Federal borrower to a non-Federal lender, except for the insurance of deposits, shares, or other withdrawable accounts in financial institutions.

    The key phrase is “in case the borrower defaults”. Had Chrysler defaulted then the American taxpayer would have been on the hook, but not for the full amount of the loan, because the assets would have been liquidated. Back then (early 80’s) only Honda had a manufacturing presence in the US and Canada as far as I remember so some of these assets might have been picked up by Toyota or Nissan, maybe Honda too.

    Today if the same guarantees were provided to any of domestic 2.8 and they defaulted I don’t think selling the production facilities would be easy unless the Chinese or Koreans would step up.

  • avatar
    shaker

    Regardless if the movie “Who Killed The Electric Car?” is 40% true, the fact remains that if GM had stuck with the EV-1, there’d be a Volt sitting in my driveway if I could in any way afford it. Of course, it would have to be powered mostly by coal/nuclear energy (i.e. plug-in), which would not make the oil companies too happy, either.

  • avatar
    Robbie

    This article is unnecessarily negative. These guys are doing what they should be doing in a bizarrely distorted marketplace; and the Prius is largely a PR stunt type vehicle.

    The car manufacturing market and the environmental
    dimension are not handled in the realm of the sensible by politicians. Any economist will tell you that if environment was a real concern, then there would simply be a 1 dollar gas surcharge, without the CAFE communist-style guidelines, and without fashion-conscious Prius drivers. However, this would not be liked by the general public, or by the big 2.8 car makers, as the gas guzzlers are what keeps them afloat. Therefore, their only course of action is to try squeeze the maximum out of Washington, and cannot be blamed for trying.

    In a rational world, the Prius would be a silly vehicle, which is why the Prius IS a PR stunt to a large extent. If we had the 1 dollar gas surcharge, we’d all drive European style cars (small cars with small, tricked out engines).

    Instead of that 1 dollar surcharge, taxpayers are now paying a multiple for bizarre economic outcomes involving (implicit or explicit) subsidies for economically senseless activities such as ethanol growing, Priusses, overpaid Detroit UAW workers, and CAFE requirements.

  • avatar
    KixStart

    Robbie: “… the Prius is largely a PR stunt …

    Toyota sells 24K Priuses/month. GM sells 4 or 5K Auras/month, 3 or 4K Corvettes/month, 1.8K Sky/Solstii/month, used to sell something like point-4K SSRs/month, Buick, Saab and Hummer all put together sell something like 22K/month…

    Apparently, in addition to their other failings, Toyota doesn’t know how to do a PR stunt correctly.

  • avatar
    quasimondo

    Meanwhile, nobody seems to lament the passing of the Insight.

    Who killed the Honda Insight?

  • avatar
    nayrb5

    I’m perpetually amused by all of the calls for gasoline surcharges / price floors / tax increases as a way of decreasing demand and forcing people to buy fuel efficient cars. Somehow, the advocates of such a scheme seem to ignore a few key factors:

    -Higher gas prices lead to decreased disposable income. It’s difficult to justify trading in a nearly paid-off car that gets 15 mpg to buy a new car that gets 40 mpg if you’re suddenly faced with making huge car payments

    -Our entire infrastructure is based on private automobiles. We can debate whether that’s good or bad indefinitely, but our society can’t and won’t suddenly shift to mass transit at the drop of a hat. Nor is it always feasible to “move closer to work” or “bike everywhere.” We’re a big country and most of our urban areas have already been planned in an autocentric way.

    -Restrictions leading to an increase of necessary goods (and I do count automobiles and gasoline in this category for the vast majority of Americans) punish the middle class most of all. The lower class usually receives some form of government relief and the upper class will be generally unaffected by the increased costs (and can purchase “feel-good” carbon offsets). But at the end of the day, people in the middle class will suddenly have to find $30 more (or so) every time they fill up their tank. Ultimately, this means fewer discretionary purchases. The economic effects of that should be obvious.

    Hybrids may not always be the most effective option, but at least they’re a step in the right direction. So’s biodiesel and ethanol. Same with better public transportation, fuel cell technology, etc. But anyone looking for a panacea is greatly mistaken.

  • avatar
    jthorner

    Keep in mind one bad shortcoming of the American car companies that ISN’T necessarily the fault of those idiots in the top offices: They report to the stockholders.

    In reality they do not report to the stockholders. Management selects the board of directors and the stockholders get to “approve” that selection or not. In practice it is almost impossible for the stockholders to directly influence the behavior of a large corporation.

    People use the impatient stockholders argument all the time, but it is mostly a lie. Yes, some wall street analysts are impatient, but a company can choose to ignore them or slavishly pander to them. Warren Buffet’s Berkshire Hathaway is one of the most successful companies in modern history and he doesn’t give a hoot what the analysts say and he doesn’t worry about or micromanage quaterly results.

    The failures of modern US businesses where they are happening are completely on the shoulders of their management. Notice that when things go well management takes all the credit, but when things go badly the scapegoats are everywhere.

    Finally, Toyota has by far the highest automotive company stock market valuation in the world. Somehow Toyota’s stockholders are not keeping the company from doing what it takes to suceed.

  • avatar

    The Volt is a PR stunt.

  • avatar
    labrat

    Stein X writes:

    “The Volt is a PR stunt.”

    From what I’ve read in the last few days, GM is actively working hard on this project. Battery suppliers have been chosen. The car has been greenlighted as an official project. GM knows that their credibility is on the line with this one, and I believe they will do whatever it takes to make this a go. At this point, they have to. I agree that not all hurdles have been cleared, and I understand your (and other posters’) skepticism, but I fully believe that they will pull this one off.

  • avatar
    KixStart

    Quasimodo: “Who killed the Honda Insight?”

    The market. Honda put it out there, available to all comers, no waiting list, lease restrictions, etc., just show up with cash or credit and we’ll give you one.

    After 4 to 6 years, few had taken the bait. Plug pulled.

    The market for tiny two-seaters is limited. The car makes sense in a lot of ways but my wife is against getting a two-seat car (actually, the Miata was the one under discussion) because “they’re not practical.” Even if you already have 3 other cars? Even if 95% of your trips carry no more than driver and passenger (and most are just driver)?

  • avatar

    @labrat

    I would actually love for GM to come out with a solidly engineered, well thought out car in accordance with the Volt spec’s. So get me right on this one — it’s just that knowing what I do about concept cars and their disconnect from reality, I remain sceptical until I see the tangibles on this one!

    Let’s hope for the best.

  • avatar
    tonycd

    “Senator (Obama) duly ditched his Hemified whip for a Ford Escape Hybrid…. When she’s not being ferried about in an armored Cadillac or Chevy Suburban, Hillary Clinton (well, actually, hubby Bill) drives a refrigerator-equipped Mariner Hybrid. John Edwards and Al Gore both keep the planet cool (warm?) with their Escape Hybrids. At least that’s what their PR folks say.”

    So tell me, what do Republicans drive?

    Careful, your agenda is showing.

  • avatar
    KixStart

    The Volt is an interesting idea; I do not heap scorn upon GM for the concept, I heap scorn upon GM because it’s ALL concept. They’ve been showing whizz-bang vehicles at auto shows for decades and nothing whatever comes of it. The vehicle they were showing off in 2000 was truly nifty – where is it today?

    The Volt is bold, it’s simpler and, maybe, more flexible than the Prius. I might be interested in one. But it doesn’t exist.

  • avatar

    So tell me, what do Republicans drive?

    You mean besides their Hummers and Suburbans and jacked up 4×4’s and 20 year old Camaros?

    I wondered the same thing. So I sent a letter to every Senator asking what they normally travel in, what vehicles they own (are registered in their or their spouse’s names), and about how many miles they travel in them a year.

    The letters went out earlier this week. I’ll keep track of who answers (and who doesn’t) and let everyone know what I find out.

  • avatar
    quasimondo

    This then leads to my second question, KixStart. What about the Civic Hybrid?

    Toyota sold 28,000 Prius’ in a month. Honda expects to sell that many Civic Hybrids for the entire year. The Civic hybrid only gives up 5 mpg to the Prius in combined EPA estimates (yeah I know the EPA’s estimates are unrealistic, but the test methods are controlled so it makes for a accurate apples-to-apples comparison).

    People were waiting months for a Prius when they could’ve easily walked two blocks down to the Honda dealership and drive off the lot with a Civic hybrid faster than it takes the ink to dry on the sales contract. Why the neglect for the Civic Hybrid while the Prius becomes a poster child for the Green Movement?

    Honda sales:
    http://corporate.honda.com/press/article.aspx?id=200705013973

    Toyota sales:
    http://www.greencarcongress.com/2007/04/toyotas_us_sale.html

  • avatar
    windswords

    KixStart:
    June 7th, 2007 at 10:21 pm

    “Toyota sells 24K Priuses/month…”

    Are you sure of this figure? That’s 288,000 cars a year. Do you mean worldwide or in the US or US/Canada? If worldwide I would like to know the US only sales figures.

    tonycd:
    June 8th, 2007 at 12:05 pm

    “So tell me, what do Republicans drive?

    Careful, your agenda is showing. ”

    Doesn’t matter because Rebublicans in general are not pushing this as their “cause celeb”, especially the global warming aspect of it. If you are preaching one thing and doing another it’s called hypocrisy. So if the shoe fits… If a politician spoke out against legalized gambling and then was seen patronizing a casino or taking money from the gaming industry I would expect him/her to get the same treatment as Obama or Clinton.

  • avatar
    Slow_Joe_Crow

    The Prius outsells the Civic Hybrid because it is a distinctive model that is easily recognized as a hybrid, while the Civic look like any other Civic. The whole point of buying a hybrid is to “be seen to be green” so the sheeple flock to Toyota. As for the Insight, well the Prius was a much more comfortable and “practical” symbol of greenness. In a similar situation I see a number of Smarts in my area now that they are legal grey imports, even though a Fit is just as fuel efficient and can carry more than 1 passenger and 2 laptops.

  • avatar

    The Prius outsells other hybrids because of the silent start. It’s a talking point that people go for. Other hybrids initiate the gasoline engine at start-up — you don’t get the same sensation of using a disruptive technology, quite simply.

  • avatar
    jurisb

    nice, one top dog arrives in D.c. with a rebdged japanese negineered mazda tribute with japanese hybrid technologies constructed by another japanese company to show that american car manufacturers CARE about DOMESTIC car mileages. Another top dog arrives with a german engineered opel vectra with japanese hybrid technology showing that his represented company cares about DOMESTIC car`s fuel economy and mileage. the third top dog arrives in a domestic van( Ripley`s believe it or not- an american minivan built on an american platform), still using japanese built hybrid technology. yepp, an american revolution…… with a revolution limiter by 5000 revolutions per minute…..( so much for pathos)

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