Big three
Why should we spend our hard-earned tax dollars on Detroit? Well, first of all, to steal a line from the past, what's good for GM is good for the country. We may be able to survive as a nation if we produce only search engines, cheeseburgers and insurance policies, but we will not thrive.
The Big Three, despite all the blather to the contrary, have done a remarkable job of closing the quality gap with the likes of Toyota and Honda, and have regularly beaten Mazda, Mitsubishi, Nissan and Suzuki in quality metrics. The Ford F-150 has been the best-selling vehicle in the U.S. for more than 30 years with the Chevy Silverado nipping at its heels. And, yes, Ford also invented the modern SUV with the introduction of the Explorer almost two decades ago. Chrysler invented the other most-successful concept in the market 25 years ago with the original Dodge Caravan/Plymouth Voyager minivans.
So just in terms of providing what consumers want, which is the definition of capitalism, the Big Three have done so. Right now, today, GM offers hybrid vehicles in more classes than any other manufacturer in the world. However, until the Chevy Volt rolls out in the next year or so, the Big Three have no competition for the hands-down most popular hybrid on the planet: the Toyota Prius. I would like to compete with the rest of the world's automakers for this ultimately huge market. Wouldn't you?
So the question is not whether the Big Three are capable of supplying cars (and trucks) that Americans want, but rather what happened to turn them upside down so quickly? Two reasons, neither of which they created:
1. The "Credit Crunch." This is the ogre in the closet, the alligator under the bed. When banks start to go bankrupt, other banks lose their confidence in lending money for fear that they might be the next to fail. This is what the TARP is supposed to do: restore confidence and liquidity. The actual implementation of it is open to interpretation and beyond the scope of this article. Let me just state for now that when the banks quit lending money, the economy gets squeezed, businesses that depend on credit lines get squeezed even more, people lost their jobs and those who don't slow their spending way down. Ergo, sales of big-ticket non-essentials, like new cars and trucks, fall as well.
2. As if the Credit Crunch weren't/isn't bad enough, at the same time it really got rolling, so did the price of crude oil. Rolling, hell, crude went through the roof like a Titan missile, hitting $147 per barrel, and sending the price of a gallon of gas to $4.25 a gallon and a gallon of diesel to $4.80 where I live. Your prices may vary. There is substantial evidence that rampant speculation, i.e., what most of us would call "gambling," inflated oil prices by as much as 60 percent. Subtract 60 percent of $147 and you get $59. The price of oil right now is $45. Hmmm, maybe it was more like 70 percent. Anyway, the Big Three weren't the profiteers/pirates speculating in the oil-futures market. But baby, they weren't the only ones to be hurt by it. Toyota, Honda and Nissan sales were hit just as hard as GM, Ford and Chrysler.
Now, make no mistake about it, we Americans love our big vehicles. We loved our woodie-style Country Squire and Town and Country station wagons in the 1940s, '50s, '60s and even into the '70s because they were the only vehicles big enough to put the whole family in whether we were going to church a few blocks away or to Grandma's a few states away. Or picking up the Little League team, or hauling plywood home. Not much has changed since other than more activities to haul kids of both genders to. But, like Studebaker, DeSoto, Plymouth, Oldsmobile and scores of other great American marques now relegated to museums, the station wagon was pretty much killed by the oil embargoes of 1973 and 1977. The demand, however, never died, although it was tempered severely by their 8-12mpg fuelishness when the price of a tank of petrol quadrupled. But when the price of gas stabilized for long enough, SUVs, with their roominess, and the one thing a station wagon never had, increased visibility due to their higher stance, emerged as the peoples' choice. Especially when they were (under)powered by V-6s that got double the mileage of their ancestors. Everybody, including the Japanese and Germans, jumped to cash in on the success of the Ford Explorer. Why? Large people movers (not to mention large-people movers) will always be around. They are just too useful.
Furthermore, the U.S. is not Asia or Europe. For better or worse, we have geography - and lots of it. Our cities, especially in the West, are new and designed to be car-friendly. Do you like to fly anymore if you don't have to? I don't. Have you ever gone grocery shopping and tried to get frozen food home before it thaws using public transportation? In the summertime? In the desert? Or had to grab an overcrowded bus that takes an hour and a half to make the same trip that is less than half that in a car? Public transit, like the poor, will always be with us, even though it makes very little sense compared to subsidizing electric/hybrid taxis in most, if not all western cities. Plus, there hasn't been a car built in the last 30 years capable of pulling a horse trailer. At least not one with a horse or two in it.
Then there are the jobs at stake. Creative ones in design and engineering. Laborious ones in production, repair and maintenance. Worthless ones in sales (kidding, sort of). Plus the jobs from the myriad suppliers, from glass and rubber to electronics and steel. With the economy shedding jobs like a truck full of Christmas trees headed to the recycling chipper, how many jobs do we want, or can we afford, to lose? Do you want to take the gamble on a new Depression? I don't.
Let's face it, folks. We need a new generation of greener cars and trucks. We can do it. We must do it. The market for cars and trucks worldwide is only going to grow. Think of it as "Car Wars" instead of "Star Wars." We need a Manhattan Project to develop the new technologies, whether they are electric batteries or carbon-neutral sustainable biofuels. If we don't do this, rest assured someone else will and we will then be forced to buy it from them at their price. Haven't we learned this lesson yet? Wouldn't you rather have us selling it to them?
Finally, I don't see bank CEOs who have their hands out for money willing to work for $1/year like the Big Three chiefs have promised to do to save their companies. This is passion, folks. You have to have it in your job if you want to succeed. Especially when you produce a product that packs a lot of emotional appeal, like cars and trucks. Henry Ford had it. So did Walter P. Chrysler, and Soichiro Honda. Let's get this done and let's do it now.
