Dude, Where's My Car?

It was reported awhile back that American car manufacturers, particularly GM, will be discontinuing the manufacture of cars to concentrate on SUV's. The reason, they say, is because there just isn't enough of a market for small cars. Fuel prices are low, and consumers simply want pickups and SUV's instead.

Bullshit. The executives are looking at projections based on stability. And historically, that has never, ever been the case. Sooner or later, something disrupts the oil supply, and gas prices shoot up. It's happened once or twice every decade in my lifetime. Apparently, being in a boardroom wipes an executive's memory.

We all remember what happened when Hurricane Katrina hit New Orleans in 2005. Fuel prices shot up. General Motors and other American vehicle manufacturers had backed themselves into a corner regarding the SUV back then, too. The result? Well, because New Orleans was an oil hub, and much of that surrounding area was responsible for fuel refinery, the gasoline supply was disrupted and fuel prices went way up. Consumers later accused the oil industry of price-gouging because they recorded record profits, but that was no conspiracy on the industry's part. Low supply, high demand, prices shoot up, scarcity forces overhead into being low. It's basic economics.

Toyota made a killing on the disaster because it had come out with one of the first hybrid cars, the Toyota Prius. Almost overnight, consumers backlogged orders on these little cars, and the waiting list stretched to over a year or more. GM and Ford had gambled on SUV's ruling forever - and lost.

Adding insult to injury was the decimation of one of the best electric cars ever made at the time: the EV-1. Consumers who drove it raved about it when it debuted in 1996. By 1999, it had a loyal following of fans who loved it. But the oil industry and the auto industry conspired to destroy this little upstart competitor, and succeeded. They managed to get the car offered only for lease, so consumers couldn't buy one. Then they dared complain about lack of demand, as if leasing a vehicle wasn't always a scam. They fought California's emissions standards tooth and toenail. And they argued, then as now, that there isn't a market for such small cars.

Well, consumers revolted, protested, raised a hue and cry over their soon-to-be lost electric cars, and even staged a mock funeral as a publicity stunt. It all went ignored, and the EV-1 was taken off the market, and the entire model was repossessed and crushed for recycling. Only a few collectors were allowed to keep them, and then only if key components were removed, rendering their engines dead.

Fuck you, GM.

In the late 60's and early 70's, when OPEC choked off the oil supply to the U.S. over the political crisis in Israel, the company that made the biggest killing was Volkswagen. Why? Because it manufactured the Beetle, a little fuel-efficient car that suddenly consumers demanded. GM, Ford, Chevrolet and Chrysler were all building over-sized sedans as their smallest vehicles. A car with six or eight cylinders was the industry standard. They were totally unprepared for a market that suddenly demanded fuel efficiency, and basic vehicles with little or no trunk space.

How many times must we see this happen before companies learn?

The gasoline crisis caused by Hurricane Katrina was barely past its heyday when the housing bubble collapsed in 2008, and the mismanagement of GM nearly destroyed the entire company. Uncle Sam had to bail it out, and even then many free-market economists argued against doing so. Had it kept the EV-1 in production, it would have made a killing, and been the most powerful auto-maker in the country, possibly the world! Over and over it has been proven that manufacture of small, fuel-efficient cars provided a hedge against the inevitable times of economic hardship and high fuel prices. That's why it has always been so very critical to keep those cars in production, even during times when they are produced at a slight loss.

Because at the drop of a hat, gas prices can suddenly go up, and then those little cars save the company's ass!

Now we're seeing this same mistake all over again. The Chevy Volt, a car which I desperately covet, is going off the market soon. (Fuck you again, GM!) While other companies are improving their electric and hybrid vehicles, and Tesla is proving that there is (and was!) a sustainable market, GM, Ford and others are hanging up their production of cars.

Okay, Chinese tariffs aren't helping. The inability to sell as much oil overseas is causing a glut of oil here at home. But all that does is force more oil down our throats at a time when we ought to be selling what's left of our tar sands and oil shale abroad. Driving SUV's is literally burning tomorrow to pay for today.

If only I could be assured that the low-fuel product I and so many others demand will be met with the supply we deserve.


Eric

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