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nAz
05-11-2005, 06:13 PM
Posted on Wed, May. 11, 2005

Someone honk in GM's ear

By Joseph J. Romm

Special to the Baltimore Sun

As gasoline prices surge to record highs, General Motors teeters on the verge of collapse, with a credit rating one step above junk. This is hardly coincidence.

GM has willfully ignored fundamental trends in technology and oil. To make matters worse, so has our government. U.S. security is threatened by rising dependence on oil and instability in the oil-rich Persian Gulf.

Our automakers and government have a brief window in which to adopt an aggressive strategy to push fuel-efficient vehicles, especially hybrids, or we risk yielding our destiny to outside forces.

Oil prices have risen sharply, yet GM stubbornly keeps making the wrong vehicles, losing market share to fuel-efficient, foreign-made vehicles that have caught the public imagination -- the identical predicament GM found itself in three decades ago.

GM had been warned in the early 1970s that oil prices would rise, but it refused to match the gas-sipping, high-quality competition from Toyota, Honda and other imports. GM fought the future and lost.

In the 1990s, when oil prices again were low, many predicted that prices would rise within a decade, threatening our security. OPEC nations simply had (and still have) much more oil production capacity and reserves than non-OPEC nations.

Population growth, industrialization and urbanization were, predictably, driving oil demand steadily up -- especially in China and India. Also, U.S. demand was again rising steadily as the political will for tighter fuel-efficiency standards had ended with the low oil prices.

Back then, the Energy Department partnered with GM, Ford and Chrysler to speed the introduction of hybrid gasoline-electric vehicles. Ironically, the main result was to motivate Japanese car companies to develop and introduce their own hybrids. GM walked away from hybrids as soon as it could -- when the Bush administration came in.

The result: GM, which had a technological lead in electric drives, let its No. 1 competitor, Toyota, achieve a stunning seven-year head start in what probably will be this century's primary drive train. GM was publicly criticizing hybrids as late as January 2004, and it only recently announced a half-hearted effort to match Toyota. This miscalculation will be regarded as one of the biggest blunders in auto industry history.

GM stubbornly pursues hydrogen cars as its vehicle of the future, but such cars require multiple scientific breakthroughs and massive government subsidies. They would reduce the freedom of American drivers by keeping them tethered to a small number of fueling stations dispensing expensive hydrogen fuel. Most independent analysts believe that these cars are decades away.

The future is easier to predict now than it was 10 years ago. Steadily rising demand and the risk of a terrorist attack on the Persian Gulf oil infrastructure mean that oil prices have more upside risk than downside. We also have the ever-growing evidence for global warming from man-made greenhouse-gas emissions.

The U.S. government should enact tougher but more flexible fuel economy standards now and use tax incentives to help U.S. carmakers switch to hybrids. It's not, as GM has argued, fuel economy standards that cost jobs and market share -- it's the lack of them.

If we don't take these actions soon, the consequences are easy to predict. GM will continue to lose market share and be surpassed by Toyota as the world's No. 1 automaker. Our trade deficit in oil will surpass a heart-stopping $200 billion a year, undermining our economic health. Our security position will be increasingly in the hands of Persian Gulf governments. Geopolitically, we will bump heads with China more and more in the race to secure the energy supplies of the 21st century.

It is predictable and preventable.

Cueless Joey
05-12-2005, 10:37 AM
If not for car rental companies buying GM cars, GM would probably be out of business now.
It's amazing some people still call Japanese cars as you-know-what crap cars.
But, I've only owned Nissans and Hondas. My last Honda had 226,000 miles on it and still ran great. I sold it to the first person who checked it.
Last year, more imports were sold than domestics.
GM, Ford and Chrysler need to get their act together. Who wants gas guzzlers and often-recalled cars except the blind fanatics?

catscradle
05-12-2005, 11:55 AM
<blockquote><font class="small">Quote Cueless Joey:</font><hr> If not for car rental companies buying GM cars, GM would probably be out of business now.
It's amazing some people still call Japanese cars as you-know-what crap cars.
But, I've only owned Nissans and Hondas. My last Honda had 226,000 miles on it and still ran great. I sold it to the first person who checked it.
Last year, more imports were sold than domestics.
GM, Ford and Chrysler need to get their act together. Who wants gas guzzlers and often-recalled cars except the blind fanatics?
<hr /></blockquote>

I don't know that it is really a gas guzzler issue, I think it is purely a quality issue. Plenty of gas-guzzling foreign SUVs are being sold and GM has models that get good mileage.
I also think American cars are perceived as being worse than they actually are. They have made great strides in quality since they were knocked on their butt in the 70's and 80's by foreign cars.
Personally I drive a '94 Altima because I got a good deal 9 years ago. It has 194K on it and I wish the SOB would quit so I could buy a car with enough interior room for a full size human being.

stickman
05-12-2005, 01:21 PM
I drive a 2004 full size Chevrolet Impala, and get an estimated 32 mpg highway fuel mileage. I have the 3.4 liter V-6. It still has power enough to pass, without leaving you hanging out in the passing lane. It's pretty good compared to a Nissan Sentra that's half it's size. A 2005 Sentra for instance with 2.5 liter, 4 cylinder, 4 speed automatic OD transmission is estimated at 28 mpg highway. /ccboard/images/graemlins/grin.gif I used to be a Nissan salesperson, and I know that they are a good car, but some of the GMs aren't so bad either.