Detroit Discovers Fuel Economy?
It’s about walking the talk.
The automakers are certainly talking the talk of fuel efficiency. Last week Bob Lutz talked to GM engineers and ordered them to focus on fuel efficiency. Good call. Fuel prices (and consumer incentives to offset them) have only been rising for five years; you don’t want to rush into responding to a new reality.
Bill Ford started talking the talk years ago, but his company kept on building gas-guzzling SUVs—profitable at $1.50 a gallon gasoline, not so profitable at $3.00 a gallon gasoline. If Ford had walked Ford’s talk, would Ford need a new way forward?
And now the way forward appears to be the way backward for American workers. As the Big Two are racing to eliminate jobs in the U.S., they are expanding overseas. Ford just announced a billion dollar fuel efficiency investment in the UK And Mexico seems to be the new Mecca for automobile production.
Perhaps I am not giving Detroit automakers the credit they deserve. It’s hard out here for a multinational.
Innovation and advanced technologies are key contributors to America’s global competitiveness. How can the Big Two anticipate future realities when they can’t (or won’t) even respond to the current one?
Do Detroit auto executives really believe that people don’t care about fuel economy? That a driver who paid $35,000 for a large SUV would not rethink his next vehicle choice when his monthly gasoline cost increased by “only” $60?
Detroit got religion this month. Or is it just talk?
Walter is the Director of the Automotive Analysis Division of the University of Michigan Transportation Research Institute (UMTRI). He studies the adoption by consumers and automakers of new powertrain (electric, hybrid, clean diesel, fuel cell, alternative fuels), safety, and telematics technologies. Walter worked for General Motors for 9 years in sales forecasting, product development, marketing, and manufacturing (1993 found him on the floor of one of GM’s component factories). Prior to joining the University, he was Executive Director of Forecasting and Analytics for J.D. Power and Associates. He earned his doctorate in Economics from UCLA in 1983.