Folly of Automakers
Published on Saturday, September 2, 2006 by the Boston Globe
Folly of Automakers
by Derrick Z. Jackson
 

Everything you need to know about American automakers was in four recent newspaper clippings. In the Aug. 25 USA Today, a review of the 2007 Cadillac Escalade and GMC Yukon Denali said they had ``many improvements, lavish presentation, but seating and space utilization are compromised despite large overall size."

Hit the brakes! How could it be that General Motors makes two metallic mastodons that are each over 5,600 pounds, nearly 17 feet long, 6 feet tall, and 6 feet wide, and still do not have enough space?

On the same day, The Wall Street Journal reviewed the Chevrolet Suburban and 3-ton Ford Expedition Extended Length. ``With their big gas tanks, a fuel stop can be jarring," the Journal said. ``It cost $97 to fill the Suburban, making it necessary to fish out a second AmEx card when we exceeded a station's $75 charge limit per credit card."

You must be kidding. For the fourth straight Labor Day, American soldiers are dying in a botched war in an oil-rich land. Big oil is exploiting wartime uncertainty by gouging Americans at the pump for record profits. Real wages for Americans have dropped since the invasion of Iraq.

What is Detroit's response? Cars that get 17 miles per gallon on the highway and cost nearly $100 to fill.

The third item came a week earlier. In a year where Toyota passed Ford in US market sales and could pass GM globally by its end, what was the concept car for 2009 that GM CEO Rick Wagoner drove, claiming it ``talks profoundly about a new way of doing business at GM?" Surely it was a competitor to Toyota's 40-50 miles-per-gallon Prius. No, it was a muscle-bound Camaro.

The fourth item is near the end of this column. The first three prompt one to wonder why Ford just announced its biggest production cut since 1982, slashing fourth-quarter manufacturing of sport-utility vehicles and pickup trucks by 21 percent. Ford and GM had already announced staffing cuts totaling 60,000 US jobs.

Lately, they cannot even appeal directly to President Bush for relief, even though auto manufacturers and the National Auto Dealers Association gave more than two-thirds of their combined $5.3 million in 2004 election campaign contributions to Republican causes, according to the Center for Responsive Politics.

White House Press Secretary Tony Snow was recently asked if Bush would meet this year with the CEOs of General Motors, Ford, and DaimlerChrysler. This year, Bush had canceled meetings with the Big Three, once in May to run down to Yuma, Ariz., to declare that ``we're going to secure our borders."

Despite describing the auto industry as ``an important part of the American economy," Snow said, ``I have no earthly idea" when a meeting would take place. As Bush was in Yuma supposedly safeguarding us against Mexicans, GM behaved like an immigrant crawling through a sewer in the night, issuing virtually no publicity as it hired workers for a new plant in Mexico. Ford, according to leaked internal memos, is also planning expansions in Mexico.

Even if Bush met with the shriveling Big Three, the session probably would not amount to much more than extra CO{-2}. If Bush is still looking for weapons of mass destruction, the Big Three keep producing them. Ford and GM have bled tens of thousands of manufacturing jobs. Bush has bled 3 million of them. Bush keeps saying he will stay the course. The Big Three never veer off course. Bush says we're addicted to oil. The Big Three remain hooked on gas guzzlers.

None of them have an earthly idea why this year, for the first time, all top 10 cars and trucks selected by Consumer Reports were made by Japanese carmakers and why foreign automakers now provide a quarter of US auto jobs at plants here. That gets us to the fourth item.

Toyota announced last week that it would delay rolling out some new models for a few months. A spike in recalls and a Japanese investigation about recall practices have raised questions as to whether the soon-to-be top global automaker is sacrificing quality for growth. The problems compelled Toyota President Katsuaki Watanabe to bow to reporters in July and say, ``I take this seriously, and I see it as a crisis. I want to apologize deeply for the troubles we have caused."

You never see the CEOs of Detroit bow in apologia. All we see are more metallic mastodons. We all know what happened to the real mastodon.

Correction: In my previous column, I wrote that defense CEOs have been paid nearly $1 trillion since the Sept. 11, 2001, terrorist attacks. It was $1 billion.

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