Sunday, November 30, 2008

The Auto Industry: Will it Survive? + Car Lust

The news from Detroit has been grim, Willie Nelson is playing On the Road Again, Russia is being bellicose, and Elvis is still dead. Sound like 1977? Well, it's not. It's 2008. The auto industry, like Willie Nelson, has been on a downward spiral for the last thirty years; and the Wall Street turmoil has recently accelerated the decline of the three monolithic, neolithic companies known as the Big Three. This decline has led to forty-percent of Detroit being vacant, and to the great state of Michigan being reduced to an old, rusting hulk, resembling nothing more than an Edsel slowly decomposing in some hot, wasp-filled junkyard.

What are the roots of this decline? First of all, corporate monopolizing. The Big Three didn't have to make cars safe, or even very much better than the last models, because they had no competition except each other. That led to Ralph Nader's Unsafe at Any Speed and many other books. The Volkswagen Beetle notwithstanding, American cars had pretty much uncontested domination of the US market from World War II to about 1977. The gas crunch and embargo in the early parts of that decade made cheap, small imports chic. Detroit tried to adapt; and the consumer got some truly awful cars: the AMC Gremlin, the Chevette, and the later Novas come to mind. Then came Toyota, Honda, Nissan. Luxury buyers had BMWs and Mercedes-Benzes in their garage instead of Cadillacs. People still bought American cars, but sales were sliding.

Then came corporate regulation and CAFE standards for emissions and fuel-economy. But with cheap fuel, SUVs became big. Then gas went up, so did fuel standards, the companies spent years and billions retooling, trying to overcome the idiotic union rules and...here we stand. There are so many underpinning reasons to this decline, it would take a book to list them all. And no one can agree who to blame. My grandpa, an old auto worker who quit because, after a short period, he decided that he didn't want to do that for the rest of his life, blames the unions for driving up costs. I blame the government, for setting unreasonable (and inherently wrongheaded) emissions and economy goals. Many other people blame the companies themselves for their greed and response to the factors listed above. As usual, I'm sure the truth lies in the middle. But whatever the cause, the fact is that Detroit is in a mess.

Rick Wagoner, the CEO of GM, and someone I've always regarded as sensible, says that GM needs money from the gummint within the next two weeks; Chrysler needs it at the latest during 2009. Ford can make it till 2010--when sales are expected to pick back up. The three heads of these companies were unashamedly begging for money from congress as part of the bailout bill, which was originally supposed to be used to buy loans from banks. In desperation to qualify, GM has even turned its accounting arm, GMAC, into more of a conventional bank--laughable.

Should Congress give the Big Three this money? It's a tough question. Frankly, I LIKE American cars a lot. Ford and GM, at least, have been coming out with many apealling models in the last two years, with more expected. The sad thing about this financial crisis happening when it has is that, just when Ford and GM and Chrysler were making some advances to being 21st century car companies, the credit crisis comes in: they can't borrow money to innovate, and their cars don't sell because their customers can't get loans either. As Glenn Beck aptly pointed out, the government is part of the reason the B3 are in this mess--shouldn't they get them out of it? Ford may survive without a bailout or even outside investment. But GM and Chrysler, with less prudent business practices, will not. Either the government bails them out, they are bought by outside interests--who could merely liquidate them for profit--or they go bankrupt.

I support the second option: GM, Chrysler, put yourselves up for sale--I'm sure someone would be interested. Congress, after deliberations that looked like seabirds squabbling over fish scraps on some godforsaken, crap-festooned rock in the middle of the ocean, have decided for now to deny the B3's request. We'll see what this year holds. Will the economy come back up? Will Cerberus Capital Management, the owner of Chrysler, bail out of the sinking ship and put it for sale? Will self-owned GM and Ford be bought? Will Toyota and the other foreign brands profit at Detroit's expense, or go down with the economy? (The latter looks true right now.) These are the questions to ask throughout 2009, and hopefully the answers to them will lead to a 2010 with all three companies still intact, some way or another. But if that doesn't happen, it doesn't happen. I hope it does, because I love good old American iron, but we will see what the future holds.

I know more about cars and the car industry than I know about just about anything else. It comes from reading car magazines religiously since I was about five. To this, my Grandpa Gray is much to blame for passing on to me at that impressionable age his Motor Trend back issues. I was simply crazy about all kinds of cars. I say "was" because since I've started driving the enthusiasm has, oddly, deadened somewhat. I attribute some of this to the fact that I can't as yet drive a stick-shift, which car magazines generally swear is the only right way. Another factor might be our (American) car, which is a 4000-pound, prune-colored enigma. I'm grudgingly fond of it, but I'm the first to point out it's many faults, and it has perhaps taken some of the fun out of driving. The final deciding factor, however, is what a serious and dangerous business driving really is. There's a downside to the sporty roadsters I've lusted over in the past: they're death traps in an accident. There's a downside to the big muscle cars I looked at for hours years ago: they use way too much of an expensive and stinky fossil fuel. People drive around in steel missiles at high speeds; and when these missiles hit each other bad things happen. Put a drunk man behind the wheel of a 5000-pound SUV, and it can become a 65-mph missile, more deadly than a bullet. These serious facts of life have dimmed my childish enthusiasm...but not so much that I don't love cars. They can be fantastic works of designing art, and when they work right they can be immensely satisfying.

Case in point, the new Nissan 370Z. I am in lust with this beautiful hunk of metal. 330 horsepower, $30,000. And it's drop-dead beautiful to boot. I remember when the 350Z came out, I thought it was competent but ugly. The designers had the Porsche Boxster squarely in their sights when designing it, for 20k less, and by all accounts they made a good attempt. The new Z looks to supersede that. Here's a video...isn't it amazing? Listen to that engine note. Gorgeous.

2 Comments:

sweetggirl said...

Lol, it's so interesting, I've never heard the term lusting over a car,lol. But why would you waste your childhood away drooling over cars? Gosh, you could've at least played with GI-Joes!! And of course you were reading national geographic by the time you were 7. I hate to imagine what you'll be reading 50 years from now,lol. :p

Audrey said...

Where are your cartoons for this week?