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.

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  • Guest

    I believe that people want a “decent” sized vehicle
    and hope that it can get reasonable fuel mileage.
    Which it should-=- anti-pollution or not, especially with all the advances made in the last 60 years.
    Instead , somehow it is detuned to guzzle the gas..

  • Guest

    The difference between the American and Japanese automakers is time horizon. The Japanese take a very long view when deciding strategy. The Americans look only to the next few quarters. As a result, Toyota gives us hybrid cars and hybird SUVs while the Big Three gives us Instant Cash Back and 0% Financing.

    If you go to, click on cars,
    carmakers, and then toyota, you will see an eye opening history of Toyota’s long path to developing hybrid technology. Toyota began it’s journey way back in 1992. Year of the Earth Summit.

    At a time when the American automakers and there protectors in the Congress and White House (Bush I) were crusading againsts scientists who were warning us about Global Warming, Toyota set itself on a path to be profitable in a future world of high gas prices.

    It seems to me that the Japanese automakers see the facts behind Global Warming for what they are: facts. It’s unfortunate that in America, the Conservative Political Culture and impotent media have created a “debate” about whether or not Global Warming is really gonna happen. When it has already (perhaps irreversibly) begun.

    That’s too bad for the American Auto Industry, America, and the Earth.

  • gman5541

    Whatever. When Ford & GM start losing enough of their shirts, they will start to get in line soon enough. Until then, make mine and yours Toyota & Nissan.

  • Guest

    People love to bust on the US car companies. But, a lot of Toyota’s growth in the US market came from introducing the Tundra. Nissan has the Armada. And subcompacts are routinely introduced to the US market, but are pulled soon after due to a lack of demand.

    I think the problems with the US companies are, yes, some structural problems due to pensions, health care costs, etc. But, I think by far their biggest problem is the length of time it takes for them to introduce new vehicles to the US market. GM regularly introduces new cars that are a hit. Look at the HHR, the new Tahoe, etc. But, those products will fade, and need refreshed.

    The Japanese companies are like the US companies in that they will sell whatever we will buy. I think the place to fix this system is to work on consumer demand. People still want to buy big trucks and big SUVs. Demand is softening, but it’s a few percentage points, not a tidal wave. As long as people want these vehicles, someone will build them.

  • Guest

    “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? “

    That’s the problem in a nutshell. They talk the talk while Toyota and Honda walk the walk.

    Bought a Honda minivan and didn’t even consider one from the Big 3. Now looking to replace a sedan and yet again, there is nothing out of Detroit that impresses me, let alone having decent gas mileage. Looks like the 2007 Camry Hybrid it is.

    It doesn’t help with the UAW holding them hostage either – at least now with seveal thousand layoffs they’re getting the hint.

    Sorry to say, but we NEED one of the Big 3 to go under to shake things up.