A Tale of Two Countries
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"Roused to action by the first Gulf War and memories of the destructive impacts of the oil shocks of 1973 and 1979, both the Japanese and American governments made a major reduction in oil imports a matter of national security and national urgency. Both launched major initiatives to accomplish this goal. Both focused on the transportation sector, by far the largest consumer of petroleum. And there the similarities end. For although the public sector in both countries formulated similar strategies and supported them with comparable levels of funding, the private sectors responded in starkly different fashion to their respective governments' challenge.
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In 1997 Toyota launched its money-losing hybrid with a production capacity of 1,000 per month. In December 1997 Business Week sorrowfully surveyed the entries in a recent car show. "While Toyota launched the world's first production hybrid gasoline and electric car, General Motors countered with a big new Cadillac and Chrysler showed off its gas-guzzling Dodge Viper muscle car." Detroit pooh-poohed the Japanese companies' achievements. "I don't see six months difference in anything that's being done," harrumphed GM Chairman John F. Smith Jr. As Business Week reported, "the only difference, say the Big Three, is that Japanese manufacturers are willing to accept huge losses."
Despite its losses, in 1999 Toyota announced it would introduce the Prius to the North American market in mid-2000, "shocking the domestic auto industry" according to industry observer David Chao. More than 35,000 Honda and Toyota hybrids were sold in 2002. Customer satisfaction was high. In September 2003 Toyota introduced the second-generation Prius. The sales price is the same as the previous Prius. Yet the new Prius boasts 15 percent more interior space (making it comparable to a Camry rather than a Corolla). It also gets better mileage, achieving a remarkable 50 miles per gallon. That is about 50 percent more than a comparable American model.
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American car manufacturers are scrambling to catch up with the Japanese. They've discovered they are years, not months behind. In late 2002 Ford announced it would be introducing a hybrid in the fall of 2003. In late 2003 Ford announced it was postponing introduction until late 2004. GM declared it would introduce a hybrid pickup in 2004. In late 2003 it announced it was delaying introduction of a full hybrid until 2007. Dodge had said it would introduce a hybrid Ram Contractor in 2005. In late 2003 Daimler/Chrysler canceled its plans to build a hybrid SUV. This is all very embarrassing to this native-born American. I'm convinced that American engineers are the equals of their Japanese counterparts. It is American CEOs who are not the equal of their Japanese equivalents."
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Part 2 next week
http://www.alternet.org/story.html?StoryID=17333