"The Green Machine That Could Be Detroit"

[DeepModem Mom]

New York Times:
The Green Machine That Could Be Detroit
By DANIEL AKST
Published: July 24, 2005

IMAGINE that you are running a domestic automaker. Rising gasoline prices threaten your lucrative S.U.V. sales, a glut of car-making capacity promises ever more competition, and burdensome union contracts limit your ability to cut costs. Then there are the Chinese. They're beginning to put together the parts they've been making for years, and sooner rather than later, whole cars from China will arrive at scarily low prices.

What do you do? The easy answer is to follow the path that Detroit has taken for years. Grind out well-made but ho-hum vehicles and offer them at huge discounts. Let your debt rating fall below investment grade. And when California tries to impose mandatory reductions in greenhouse gases, you sue, even if some other states want the same stricter standards - and even if some consumers are lining up to pay hefty premiums for energy-saving hybrid vehicles that run on both gasoline and electricity....(I)sn't it possible that Ford and General Motors are on the wrong path?

What if one of them decided to break from the pack? What if a major automaker decided to reinvent itself as the world's first and only green car company, producing only hybrid, clean-diesel and other high-efficiency vehicles? Not Birkenstocks on wheels, mind you, but enjoyable, functional cars that get great mileage.

Consider the advantages. Such a company could drive down the cost of producing hybrids by attaining economies of scale. It would be ready - nay, eager - to comply with stringent clean-air rules wherever they were imposed. It would be positioned to exploit the federal mandate for low-sulfur diesel fuel, which will open the door next year to cleaner-burning diesel engines. And it would no longer have to compete as much on price, because consumers have shown a willingness to pay more for more efficient cars....

http://www.nytimes.com/2005/07/24/business/yourmoney/24cont.html

[NEOBuckeye]

1. I'll believe it when I see it.

Motor City's executives are too stubborn and stuck in their old ways to change. It's all they know. They'd rather push more Hummer-esque, gas-guzzling land barges than invest in producting 2 seater Euro-style green vehicles that might actually save themselves.

[Ready4Change]

2. It would be a smart move. Hence, it won't happen.

Detroit hasn't used foresight in 40 years. Since the mid '60s everything Detroit has done has been because some other countries car makers saw something obvious and took advantage of it. 5 years later Detroit says "me too," and with a mediocre product at that.

Fuel efficient economy cars. Small trucks. Compact sports cars. Premium compact GTs. Modern SUVs (Triggered by Nissans Pathfinder, imo.) Performance engines that AREN'T V8s.

The only reason Detroit hasn't been an also-ran in the last 4 decades is because it became such a giant in the 50's and 60's. That momentum is finally running out.

[whistle]

3. "What we've got here is... failure to communicate....

... Some men you just can't reach. So you get what we had here last week, which is the way he wants it... well, he gets it. I don't like it any more than you men." - - from the movie "Cool hand Luke", Captain, Road Prison 36.

When have established corporate institutions every totally remade themselves for the good of the consumers. Corporations function for the good of stock holders who want to see maximum returns on their financial investments, or bail out. Let the dinosaurs die and back the next evolutionary brainchild that comes out.

[mn723]

4. I think it's interesting that....

the automakers from Detroit are all offering "employee discounts" this summer while Toyota is considering raising their prices in America. That just tells you who is making a superior product.

My 2004 Ford quit at 13,000 miles.....now I will only drive Toyota

[Kolesar]

5. Detroit cannot compete in the small-mid size range

That leaves them with products in the truck-size to sell. Those don't get good fuel economy.