fuel efficiency

When the congressional enablers of the Big Three automakers proposed a bailout for Detroit, I got to thinking about a friend of mine.

He took pity on a female acquaintance with a somewhat chaotic lifestyle and loaned her $200. I told him that he would never see that $200 again.

I was right.

Call me cynical, but I am not sanguine about handing over large gobs of public money to manufacturers with a rotten business model that has exacerbated U.S. dependence on a fossil fuel supplied by assorted crooks, cartels, and despots.

Call me someone who dwells on the past, but it’s difficult to forget that Detroit and its unions spent years stonewalling and stomping on reasonable legislation to boost fuel economy standards – until public outrage at high gasoline prices in 2007 finally shouted down the Big Three and their can’t-do culture of complaining.

Call me hard-hearted, but when companies are run into the ground by sclerotic executive bureaucracies that failed to anticipate oil price risks, failed to fix their product development systems, failed to sharpen their brands, and failed to bargain hard enough over labor costs, they deserve to die. ...

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The advertising slogan for the Hummer is: "Like Nothing Else."

Which is also an apt description for the fuel price surge that has crashed the market for extra-heavy consumer vehicles. The physics and economics are simple. Lugging around a lot of iron requires a lot of fuel. At $4 per gallon, the fuel bills start to pinch hard and household solvency trumps a cool image every day of the week.

The Hummer was the most extravagant manifestation of Detroit's most recent business model, which was to turn dowdy trucks into ultra-hip, must-have wheels. Car guys know that people don't buy cars, they buy image. Detroit's car guys ingeniously pushed a lot of emotional buttons when they marketed Hummers and other slick SUVs, which convey an aura of dominance and allow their owners to show the world who's the toughest and coolest of them all.

Throughout most of the 1990s and the first part of this decade, the model worked great. Sales of flashy SUVs and pickups returned handsome profits. Economy car product lines were largely a nuisance to the Big Three, which built them largely to keep the companies in compliance with CAFE standards.

Unfortunately for Detroit, its business model was based on a premise that cheap oil would be available indefinitely. Detroit was slow off the mark when warning signals began flashing yellow, then red, that the era of cheap oil was drawing to a close.

Reality has arrived in the Motor City. ...

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