When Henry Ford started using the assembly line for automotive production in the early 1900s, the goal was efficiency. Almost a century later, the talk of the industry is still efficiency, but a different type: fuel efficiency. If the new cars the Big Three – General Motors, Ford and Chrysler – are showcasing at the North American International Auto Show are any indication, these automakers still haven’t got the hint. This isn’t the 20th century anymore: For Michigan’s automotive dinosaurs to stave off extinction, they must adapt to changing markets that value eco-friendly cars.
Although the auto show doesn’t open to the public until this weekend, in the past few days the Big Three have strutted their steel stuff to the press and the industry insiders. And it’s been a lesson in what not to do. In the most dramatic event of the week, Chrysler opened the show by parading 130 cattle down Washington Boulevard in downtown Detroit, hoping the Dodge Ram pickup in the middle of the herd would get some attention. But advertising trucks and SUVs isn’t going to improve the Big Three’s sales any more than cattle roundups will.
The Big Three are still living in the age of the SUV and don’t want it to end. Because larger vehicles make higher profit margins than mid-sized and small cars, Michigan’s automakers are trying to shove trucks and SUVs down Americans’ throats. Recent consumer studies have shown that the American people are demanding more fuel-efficient, safe and quality vehicles. The only way the Big Three will improve sales is if they start producing them like consumers want.
In the past year, Toyota, a more environmentally friendly car company, overcame GM to claim the title of the world’s top selling automaker, the price of oil topped $100 per barrel and experts finally reached the closest thing possible to a consensus that humans are contributing to global warming. These are related. Instead of mass-producing novel, eco-friendly vehicles with innovative technology, they continue to put out newer versions of existing models of trucks and SUVs and absurd hybrid SUVs. The Big Three are ignoring the big picture.
This resistance to fuel-efficient vehicles has led the Big Three to fight legislation that could ease them into regulatory standards on par with the rest of the world. Last month, Congress passed the Energy Independence and Security Act, which mandates that companies raise fuel economy standards to an average of 35 miles per gallon by 2020 for their entire fleet. Experts from a number of groups, including the University’s Transportation Research Institute, have said that the law may end up helping the Big Three make money again.
But if that’s going to happen, the Big Three will need to change.