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GM and Ford are national security risks
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The car makers are way behind when it comes to building fuel-efficient cars, and they're fighting rule changes for better gas mileage. This leaves U.S. consumers sending money to the Middle East for oil, or to Japan for hybrids.
By Scott Burns
Nearly 35 years ago, General Motors (GM, news, msgs) asked a consulting firm to examine a problem. Imported cars, mostly Japanese, had captured 25% of the California car market. GM management was worried. While the Big Three still had 90% of the national market, the top brass at GM saw California as the future.
So they had the problem studied.
Today, General Motor's market share is down to 25%. The Big Three have seen their share shrink to 57%. Our domestic carmakers (including Chrysler) have lacked foresight and innovation for so long they are now fighting to hold market share in the big categories essential for survival: midsize cars, SUVs and minivans.
Management will blame this on intractable labor costs. While labor costs are definitely a problem, it's time to consider a larger problem: intractable bonehead management.
The same Japanese managements that are derided for their conformity and slow decision-making are eating Detroit's breakfast, lunch and dinner. That's a management problem.Banks and insurers
check your credit.
So should you.
3 fatal flaws
Today, General Motors and Ford (F, news, msgs) are well-positioned to be dinosaurs. So is Chrysler. Worse, they are threats to national security.
How is this happening?
Here are three main thrusts:
The industry has consistently lobbied against any changes to the Corporate Average Fuel Efficiency (CAFE) rules, even as our dependence on imported energy has increased. The domestic car makers talk about a global industry but have acted as though the United States was peculiarly immune to rising energy costs. One side effect is that domestic cars are unsuited for foreign markets because foreign markets are geared to fuel efficiency.
The industry has focused its profitability on gas guzzlers that are either supersized -- like the Hummer H2 (10/13 mpg), the Lincoln Navigator (13/18 mpg), the Chevrolet Suburban (14/18 mpg) and the Cadillac Escalade ESV (13/17 mpg) --- or on an array of super-muscle cars that are remarkably fuel efficient relative to their forebears but still send plenty of money to bomb-throwers in the Middle East.
Rather than innovate and invest in hybrid technology, as Toyota and Honda have done, the industry has repeatedly labeled the most successful new car introduction in a decade as a "niche market" car. When fuel efficiency becomes crucial, American consumers will have two ugly choices: Send enormous amounts of money to the Middle East for oil, or send enormous amounts of money to Japan for efficient cars.
Detroit threatens our national security
The consequences of all this are neither good for the country nor pleasant. As some talk about $3 gasoline by summer, no remedies are available in auto dealer showrooms and lots. That's a pretty good reason to brand General Motors, Ford and Chrysler as major risks to national security.
Is there something we can do?
I believe there is. A recent survey showed that two out of three Americans, including NASCAR fans and conservatives, think buying more fuel-efficient cars is patriotic. Skeptics should check out 40mpg.org, a new organization devoted to convincing the other boneheads -- the ones in Congress -- that government-enforced, higher fuel-efficiency standards are essential.
Conservatives have regularly defeated efforts to raise the CAFE standards, arguing against government intrusion in the private economy. I consider myself a conservative, but it's time to recognize that our national security is being threatened by Detroit.
-----------------------------------------------
GM and Ford are national security risks
advertisement
The car makers are way behind when it comes to building fuel-efficient cars, and they're fighting rule changes for better gas mileage. This leaves U.S. consumers sending money to the Middle East for oil, or to Japan for hybrids.
By Scott Burns
Nearly 35 years ago, General Motors (GM, news, msgs) asked a consulting firm to examine a problem. Imported cars, mostly Japanese, had captured 25% of the California car market. GM management was worried. While the Big Three still had 90% of the national market, the top brass at GM saw California as the future.
So they had the problem studied.
Today, General Motor's market share is down to 25%. The Big Three have seen their share shrink to 57%. Our domestic carmakers (including Chrysler) have lacked foresight and innovation for so long they are now fighting to hold market share in the big categories essential for survival: midsize cars, SUVs and minivans.
Management will blame this on intractable labor costs. While labor costs are definitely a problem, it's time to consider a larger problem: intractable bonehead management.
The same Japanese managements that are derided for their conformity and slow decision-making are eating Detroit's breakfast, lunch and dinner. That's a management problem.Banks and insurers
check your credit.
So should you.
3 fatal flaws
Today, General Motors and Ford (F, news, msgs) are well-positioned to be dinosaurs. So is Chrysler. Worse, they are threats to national security.
How is this happening?
Here are three main thrusts:
The industry has consistently lobbied against any changes to the Corporate Average Fuel Efficiency (CAFE) rules, even as our dependence on imported energy has increased. The domestic car makers talk about a global industry but have acted as though the United States was peculiarly immune to rising energy costs. One side effect is that domestic cars are unsuited for foreign markets because foreign markets are geared to fuel efficiency.
The industry has focused its profitability on gas guzzlers that are either supersized -- like the Hummer H2 (10/13 mpg), the Lincoln Navigator (13/18 mpg), the Chevrolet Suburban (14/18 mpg) and the Cadillac Escalade ESV (13/17 mpg) --- or on an array of super-muscle cars that are remarkably fuel efficient relative to their forebears but still send plenty of money to bomb-throwers in the Middle East.
Rather than innovate and invest in hybrid technology, as Toyota and Honda have done, the industry has repeatedly labeled the most successful new car introduction in a decade as a "niche market" car. When fuel efficiency becomes crucial, American consumers will have two ugly choices: Send enormous amounts of money to the Middle East for oil, or send enormous amounts of money to Japan for efficient cars.
Detroit threatens our national security
The consequences of all this are neither good for the country nor pleasant. As some talk about $3 gasoline by summer, no remedies are available in auto dealer showrooms and lots. That's a pretty good reason to brand General Motors, Ford and Chrysler as major risks to national security.
Is there something we can do?
I believe there is. A recent survey showed that two out of three Americans, including NASCAR fans and conservatives, think buying more fuel-efficient cars is patriotic. Skeptics should check out 40mpg.org, a new organization devoted to convincing the other boneheads -- the ones in Congress -- that government-enforced, higher fuel-efficiency standards are essential.
Conservatives have regularly defeated efforts to raise the CAFE standards, arguing against government intrusion in the private economy. I consider myself a conservative, but it's time to recognize that our national security is being threatened by Detroit.
Approaching Legendary Status
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