The Detroit Three --- Making Any Relevant Cars or Trucks?

Early word on GM's expected big announcement Tuesday, July 15, has it that the plan will entail thousands of white-collar job losses, a sharp reduction in spending, including cuts in executive compensation, and a broad realignment of the automaker's North American truck capacity to build more cars and fewer light trucks. GM's board of directors met Monday to approve the plan, which took weeks to prepare. We shall see; check this space Tuesday night for our take on the announcements.

On Monday, President Bush lifted a presidential ban on offshore oil drilling on the Outer Continental Shelf that was implemented by his father in 1981. His action has no immediate effect because Congress has enacted prohibitions on offshore drilling annually since the 1980s. But it let Bush blame Congress for not taking action to keep us addicted to oil.

US VP Dick Cheney is said to have created the country's energy policy in secret meetings with Big Oil execs

So this is an opportune time to review where the Detroit Three stand when it comes to building vehicles relevant now and in the future that Americans will want to buy.

General Motors is working on a plug-in hybrid family-sized sedan called Volt for Chevrolet. GM said last year Volt would get 600 miles per 12 gallon tankful of gasoline (Volt uses a gasoline generator to recharge its batteries; Volt's wheels are driven by electric motors). Also, GM said Volt could be recharged with a standard 110-volt household plug.

But GM is already backing away from that 600-mile range. Reports say GM thinks Volt's gasoline tank is too large, so the new goal is a range of around 360 miles.

Bob Lutz, the 76-year old GM VP, a former Marine whose hobby is collecting, restoring and flying fighter jets, introduced the Volt at the Detroit Auto Show

Last week, GM told the National Highway Traffic Safety Administration, "for the purposes of the NHTSA rulemaking, GM's game-changing EREV technology should be treated as a low-volume application during the time period under consideration. We strongly discourage NHTSA from applying either PHEV or EREV technology in any significant volume in its ... model during the 2011-2015 timeframe."

To translate, that means, 1) GM doesn't expect to sell Volt in large numbers, and, 2) The General doesn't want NHTSA to use Volt in determining GM's CAFÉ ratings (corporate average fuel economy).

Some say GM will build just 200,000 Volts over five years, about 40,000 cars a year. Chevrolet sells about that many Corvettes every year. The amount is next-to-nothing in a near-16 million vehicle marketplace.

Will Volt become another EV1? GM's full-electric EV1 was leased through Saturn dealers. Skeptics say GM built EV1 to fail, to prove the non-viability of an all-electric car. But when GM sent flatbed trucks to pick up every EV1, some people hid their cars or locked them up, not wanting to lose them.

EV1s in a parking lot at a GM facility in Burbank, CA, waiting to meet their crusher

The company has had some success with their new Chevy Malibu gas/electric hybrid, but the company needs a lot more models like that, and fast. Some GM full-size trucks and SUVs are now available with a "dual mode hybrid" system, a complicated package based around a new automatic transmission with electric motors developed by GM, Daimler and BMW. Highway mileage is almost doubled on some models. People are going to buy big trucks for work, towing or carrying a soccer team, and with this system maybe they'll do so in a tad more greener way. But this particular system will not win the Nobel Prize.

At Ford, the former head of Boeing, Alan Mulally, replaced Bill Ford as president and CEO in September, 2007. Ford remained "executive chairman," but stepped down from his other jobs after vowing to be a green supporter, but accomplishing next to nothing.

After Ford showed a surprising US profit in the year's first quarter, Mulally was hailed as a savior.

But with skyrocketing gas prices, Mulally says he can't predict when or even if the company will show a profit again in America. Apart from the gas/electric hybrid Escape small SUV (twin of the Mercury Mariner), the future is cloudy (or smoggy) at Ford when it comes to alternative fuels and developing cars and trucks to use them.

Ford's new Flex wagon was displayed as the Fairlane concept at auto shows across the country the past two years; its relatively low fuel mileage from a V6, with no 4-cylinder available, might keep it from doing as well as Ford hopes

The company's website heavily promotes ethanol and says Ford is investigating hydrogen fuel cell vehicles and plans on more new gas/electric hybrids. Ford has produced 1.6 million cars and trucks which are Flex Fuel Vehicles, running on a combination of ethanol and gasoline.

And then there's ... Chrysler.

In 1998, Germany's Daimler (parent of Mercedes-Benz) bought Chrysler for over $36 billion. Daimler wanted Chrysler's skills in building small cars and Chrysler wanted entrée into Daimler's dealers worldwide. In August, 2007, Wall Street investment firm Cerberus took Chrysler off Daimler's hands for $7.4 billion, an unprecedented reversal of corporate fortunes. Daimler kept a near-20% stake in the new, private Chrysler.

Chrysler has put together a gas/electric hybrid package for their biggest vehicles. The problem? The gasoline engine in these big vehicles is a Hemi V8, Chrysler having dredged-up the Hemi name to sex-up a boring product line-up. Now, what the heck is a Hemi Hybrid? Chrysler didn't learn from Honda, which failed in trying to sell their gas/electric hybrid Accord both as a fuel-sipper and as "the most powerful Accord ever." Schizophrenic advertising never works.

Bob Nardelli, the guy on the left who looks like every car salesman you've ever seen, hands the keys to the 25,000th Dodge Viper to Kurt Busch, driver of the #2 Penske Dodge in NASCAR; Busch is no doubt thinking about how much gas is going to cost for his new car

Chrysler is running a cynical promotion called "Let's Refuel America!," guaranteeing some buyers a locked-in gas/diesel price of $2.99 a gallon for three years. On their website, Chrysler says that it applies to, "new and unused eligible 2008 or 2009 model year Chrysler, Dodge or Jeep vehicle (excludes all SRTs, Dodge Sprinter, Dodge Viper, Dodge Ram Chassis Cab, Dodge Challenger, Chrysler Crossfire, Jeep Wrangler and Jeep Wrangler Unlimited) between May 7, 2008, and July 7, 2008. In addition, you will need to have an active Visa or MasterCard credit card account."

It seems some of the people the lower fuel price would benefit are those suffering financially and having a credit card might not be an option. Why not offer a simple debit card?

Instead of gimmicks, Chrysler must follow what we said in this posting's open: That the Detroit Three have to build cars and trucks which make sense now and in the future, and which Americans want to buy.

So, what do you think of Detroit's efforts so far in the 21st century? What North American-made car or truck would you buy, or have bought recently, and why? One group of buyers is well-known within the industry as "Honda-only." Have you bought an import? Which one and why? How do you compare the service you get at a domestic dealer and from an import?

Or, does the concept of "domestic/imported" have any meaning at all today?

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Comments

[dctackett]

foreign or domestic, I won't be buying a car for years to come... and the year I do will depend on what's available.­.. is it affordable to purchase, use and maintain? is it dependable? I'll probably wait a few years after new models are released..­. but really... I'm waiting for something new, something groundbrea­king... I don't want some hybrid BS, I don't want gas at all... and I don't want to have to deal with some battery that's going to die out in a few years...

and if the "Big 3" die out... so be it... I'm sure some other companies with better technology will take their places...

[Steve Parker - Huffpost Blogger]

Thanks for the comment. I'm pretty sure you're not the only one who feels that way ...

Hybrids are going to be here for quite awhile, but the most interesting ones are yet to come, and those'll be diesel hybrids. Same basic system which submarines have used for almost a century (excluding the nuclear-powered ones). The new generation of 'clean diesels' coming from Europe later this year would be perfect for hybrid applications, and I'm sure one of them, VW, Audi or Mercedes will have a diesel/electric hybrid here within a year.

One thing which people usually never mention when talking about the gas/electric hybrids ... that they are extraordinarily clean; I think all of of the ones sold in the US are Partial Zero Emissions Vehicles, PZEVs.

One reason it doesn't get mentioned too often is because the car-makers who don't yet have hybrids want to keep harping on about the 'lie of the gas/electric hybrids.' They want the talking points on these cars to be about high costs and not delivering the promised mileage. But the emissions story is a good, positive one.

[Cathexis]

This is what happens when a company ignores a looming transformational crisis in order to continue milking the current Cash Cow until it is dry.

Now, the crisis date is upon them. And only now do they start to react, after having ignored the portends for decades.

Look at this and learn, because if Republicans remain in power, this will be the storyline againa nd again in the future: Economy, Healthcare, Climate Change, etc.

[Steve Parker - Huffpost Blogger]

Thanks for your comment. Remember that during Clinton's two administrations, there was essentially nothing done to raise the CAFE limits, lower emissions and encourage car-makers and car-buyers with at least some reasonable incentives to move into the 21st century. W and Cheney, with their deep connections to Big Oil, took it all a big step further. They made certain that nothing of value was done for the country when it came to cars, trucks and their mileage and emissions levels. W's chief of staff for 6 years was Andrew Card, the chief lobbyist at one time for the Detroit Three and for GM after the Detroit Three group split up. He was Secretary of Transportation for HW Bush. Big Oil couldn't have had a better, more loyal friend as the gatekeeper for W. Between the three of them, W, Cheney and Card, you might as well have been talking about the ExxonMobil annual board meeting.

[robin50]

I wonder what the reliability of these new type of cars will be over the long haul. I guess if it is setting in a shop most of the time would be very fuel efficient.

How about in the mean time they offer a small affordable and reliable car that does what a car is suppose to do, get you from point A to point B safely. And now a function of that car should also get you there while using the smallest amount of non-renewable resources. Do away with anything on the car that adds to the cost, adds to the weight and just really isn't needed. It would not have to have all the latest bells and whistles. Most cars could stand to use a few less cup holders. And most people have more than enough insulation now, they don't need something to warm up their ample behinds. These type of autos have been available for decades in Europe, now why not here?

[Steve Parker - Huffpost Blogger]

Thanks for the comment. Too bad you weren't working for one of the Detroit Three in about 1974, when Detroit simply went to sleep in the face of higher-quality, smaller, cheaper to run Asian and Euro imports. Actually, there are vehicles just ike the ones you describe ... but they're not cars, they're motorcycles.
Do you know about the car from India's Tata? It's called the Nano (great name) and sells for under $3,000. You should Google it ... there are a million stories on it. It was introduced just a few months ago, and I think it fits the bill for the car you're hoping to someday see.

[Biofuelsimon]

Looks to me like US car makers are missing a trick. There is lots of technology in models produced for the European market that could be transported into US models. This includes higher compression engines which are more fuel efficient than the big clunkers that go into many US models for instance, and are very powerful for their weight.
Trouble is US vehicle makers are obsessed with making technologically out dated vehicles, which handle badly and drink like fish. If the US were to mandate a 10% increase in fuel efficiency over 10 years for CAFE and extend it to all the vehicles on the road, then dependence on oil could be considerably reduced. But that won't happen.

[Egalitare]

For too long, US automakers went "all in" on heavy advertising and financial gimmickry. There are plenty of inventive minds out there creating promising innovation that could (with some pain and effort) be pushed into existing production lines, but the heads of each firm pulled out the quarterly profits yardsticks and decided to stay the course.

Right off the cliff.

[Archie1955]

I would never purchase another U.S. made vehicle. I've had Lincolns, Buicks, Oldsmobiles, Mustangs, Jeeps and Chryslers in the past but now my family drives four cars, a BMW 3 Series cabriolet, a Porsche Boxster, a Jaguar X Type and a Range Rover. These cars outclass anything I have ever driven made in America. Although the Range Rover is not easy on gas, it has to be the finest SUV made anywhere and from a family overall basis the other three cars are quite easy on gas as they are smaller, lighter vehicles than most cars made in America. Therefore my average family fuel costs per month are probably no greater than any American family with one SUV and one large American made sedan. I feel the U.S. car manufacturers have been mollycoddled by the Congress and the US Administration for so long that they no longer know how to compete, if they ever did. If Congress had forced them to meet higher fuel standards in the past they would not be in the current situation.

[BBackSoon]

You know I don’t want to dissuade you from your story of fuel efficiency and overall quality of they cars in your stable but with 4 cars that all cost over 30k and that is a low ball figure, do you really think that this was what the article was about? I personally would love to have the Jag but the realities of my life are that unless I can get a good deal on a project car I will never own one.

While I am not that impressed with anything Detroit has made in years I am also not looking in the Luxury car market. I am looking at the standard market with 4 doors, auto, air and a radio that doesn’t make me want to short it out with a hammer. In fact I have not bought a new car in the past 10 years, both out of budget constraints as well as not wanting another payment.

My last two personal vehicles have been Japanese but my wife still likes big American SUV’s. Needles to say we take my car most places because of gas prices. Since I can spin my own wrenches I can keep these cars going but I must say from my view of the auto market, near the bottom, it is hard to beat Japanese efficiency when it comes to old cars.