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Auto-Sales Honesty in the NYT



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ICYMI in today’s Web Briefing, this op-ed by Edward Niedermeyer titled, “A Green Detroit? No, a Guzzling One” is a must read. The opener:

WHEN President Obama announced in March 2009 that his administration would guide General Motors and Chrysler through a government-financed bankruptcy, he made it clear that the taxpayers’ $80 billion would buy nothing less than a sweeping transformation of the entire auto industry.

“This restructuring, as painful as it will be in the short term, will mark not an end, but a new beginning for a great American industry,” he said, “an auto industry that is once more outcompeting the world; a 21st-century auto industry that is creating new jobs, unleashing new prosperity and manufacturing the fuel-efficient cars and trucks that will carry us toward an energy-independent future.”

Now, nearly a year and a half after the two automakers exited bankruptcy, the administration has defined down the goals of the bailout, focusing on G.M.’s and Chrysler’s return to profitability and job creation. Though these are promising developments that show the bailout has not been an unmitigated short-term failure, the new emphasis shows just how far the industry is from the kind of transformation we were promised.

In particular, what Mr. Obama called his “one goal” — having Detroit “lead the world in building the next generation of clean cars” — is nowhere near being achieved. While the idea of improving G.M.’s and Chrysler’s fuel efficiency was doubtless a politically popular justification for the bailout, American consumers have not embraced the goal with equal fervor. Sales of fuel-sipping compact and subcompact cars have actually dropped this year, while pickup and sport utility vehicle sales grew by double-digit percentages.

This dynamic is not limited to Detroit, as Honda and other foreign producers have seen their sales this year grow largely on the backs of light trucks. But, as the king of S.U.V. and pickup sales, Detroit has been the main beneficiary of the market’s continued preference for less-efficient offerings.

The rest here. With gas prices creeping up, however, I wonder how long Detroit’s SUV-based fortune will last.



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