DinosaursandMeteorsTheUSCarIndustryFallandForeignCarConquest

Introduction

Theautomobileindustrybeganaslittlemorethanasmallexperiment.An“official”startdatecanbetracedbacktotheChicagoTimes‐HeraldThanksgivingDayraceof1895(1).CharlesandJ.FrankDuryeawontheraceonawinteryweatherday,whenjusttwocarscrossedthefinishline.Yetthisracechangedthecourseofhistory.Withinadecade,numerousinventorsandmechanicstriedtheirluckatbuildingautomobilessuchasBuick,Oldsmobile,andFord.

ManyattemptedbutonlythemightythreesurvivedtheautomobileraceFord,GM,andChrysler.Foroverhalfacenturythesecompaniesdominatedtheglobalautomobilemarket.Yetinthemistofpride,thecommunicatedgoalshavegoneastray.ThisallowedtheforeignautomobilecompetitorstocompletelytransformtheU.S.automobilemarket.

U.S.AutomobileIndustryFall

Intheearly1970s,warbeganintheMiddleEast.WhentheUnitedStatesshowedalliance,Araboilexportingnationsplacedembargosonthesenations.TheArabnationsdecreaseproduction.Inresponsetothisdecreasedsupply,OPECraisedcrudeoilpricesfrom$3abarrelto$12abarrel(2).Thereasonfortheselargepriceincreaseswasduenotonlytoreducedsupply,buttotheUnitedStatesenergypoliciesthatallottedpricerestraintsondomesticallyoil.Thepricecontrolcauseda50%priceincreaseforimportedoil.ThepolicykeptoilpricesforU.S.consumersbelowworldmarketprices.Whilethiswasbeneficialintheshortrun,ithaddisastrousconsequenceseventuallydoublingoilprices.IftheUnitedStateshadnothadpricecontrols,theywouldhavefacedhigheroilprices,asaresult,oilconsumptionwouldhaveeventuallydeclined.Thiswouldhavelessenedthedependenceonforeignoilandtheimpactofprice.Inactuality,becausepricecontrolsallowedconsumerstocontinuebuyinggasolineatnormalpricesconsumersdidlittletodecreasetheirdemandforoil(3).U.S.automobilecompaniesdidnotindustrydidnottakeheedtotheoildilemma.Theycontinuedtoproducelargegas‐consumingvehiclesforyears.

TopforeigncompetitorslikeToyota,Honda,andNissanmadestepstoproducevehiclesinanalternativenichemarket,compactenergyefficientautomobilesthroughoutthelate1980sand1990s.ManyAmericansembracedthesecompanies.Theybecamepopularfortheirefficiency,enginequality,design,andmileage.

Alternatives

ElectricElectriccarhavebeenaroundsincethebeginningofcars.Atoneperiod

electriccarsweresellingfasterthansteamandgasengineautomobliesintheearlytwentiethcentury.Howeverintheracetomass‐produceithasnevermadethecut.Asmallselectionofall‐electriccarsinthelate1990sfromthepopularautomakers—includingHonda’sEVPlus,GM’sEV1andS‐10electricpickup,aFordRangerpickup,andToyota’sRAV4EV—wereintroducedinCalifornia(4).Despitetheenthusiasmofearlyadopters,theelectricsfailedtoreachbeyondafewhundreddriversforeachmodel.Withinafewyears,theall‐electricprogramsweredropped.

Hybrid

Hybridsworkfromtwoenergysources.Thefirstisapropulsionsystemthatrunswithrechargeableenergystorageandthesecondiselectricwhichrequiresthebatterytobechargedoccasionally.ToyotaMotorCorporationannouncedthe"EarthCharter,"adocumentoutlininggoalstodevelopandmarketvehicleswiththelowestemissionspossibleintheearly1990s.TheClintonAdministrationannouncedagovernmentinitiativecalledthePartnershipforaNewGenerationofVehicles(PNGV).Intheprogram,thegovernmentworkedwiththeAmericanautoindustrytodevelopacleancarthatcouldoperateatupto80milespergallon.Severalyearsandabilliondollarslater,thePNGVemergedwiththreeprototypesfortheir80mpgcar.Everyprototypewasahybrid.Toyota'sexclusionfromPNGVpromptedChairmanEijiToyodatocreateasecretprojectcalledG21,GlobalCarforthe21stCentury(5).Thefollowingyear,Toyotadoubleditsoriginalgoalofimprovingfuelefficiency.Hondareleasedthetwo‐doorInsight,thefirsthybridcartohitthemassmarketintheUnitedStates.TheInsightwonnumerousawardsandreceivedEPAmileageratingsof61‐MPGcityand70MPGhighway.In2000,ToyotareleasedtheToyotaPrius,thefirsthybridfour‐doorsedanavailableintheUnitedStates.TheToyotaPriusIIwon2004CaroftheYearAwardsfromMotorTrendMagazineandtheNorthAmericanAutoShow.Toyotawassurprisedbythedemandandpumpedupits

productionfrom36,000to47,000fortheU.S.market(6).Interestedbuyerswaiteduptosixmonthstopurchasethe2004Prius.ToyotaMotorSalesU.S.A.PresidentJimPresscalledit"thehottestcarwe'veeverhad."InSeptember2008,FordreleasedtheEscapeHybrid,thefirstAmericanhybridandthefirstSUVhybrid(5).

FuelOptionsHydrogen

Hydrogen‐fuelledcarsaresaidtobethecarofthefuture.Theyare

poweredbyfuelcells‐‐electrochemicaldevicesthatcombinestoredhydrogenwithatmosphericoxygentogenerateelectricityandwatervapor(6).ThismeansthecarproducesnoCO2emissionsdirectly.Butwhetheritisemission‐freeoveralldependsonthesourceoftheenergyusedtoproducethehydrogen.Thehydrogenismoreofatemporarystoreofenergyfromothersourcesthanafuel.

Butthepromiseofhydrogen‐poweredpersonaltransportseemsas

elusiveasever.Thenon‐emergenceofhydrogencarsoverthepastdecadeisparticularlynotablesincehydrogenpowerhasbeenadarlingofgovernmentsworldwide,whichhavespentbillionsofdollarsinsubsidiesandincentivestomakehydrogencarsareality(6).

EthanolEthanolisatypeofgrainalcohol,itsveryeconomictocreatebecauseit

involvesthefermentingstarchorsugarcrops.Asafuel,itsenergyisdenseandlessthan2/3ofgasolineandtheethanoltankmustbe1½thevolumeofaregulargastank(7).Theexchangefromgasolinetoethanolhasbeensubjecttonegativereviewbecauseitrequiresusingcropsfortheproductionofmotorfuel.TheU.S.OfficeofTechnologicalAssessmenthasestimatedthatgrainandcorntomass‐producethefuelwouldmakethenation’sfoodbillincreasebybillions(7).Developmentforbiomassethanolcouldbecomemoreeconomicallysoundthroughmoreintensiveresearchinthefuture.

EnvironmentalImpactsofagriculturalEthanol(alternativecars:USOfficeofTechnologicalAssessment1980)

• Water:WaterUse(irrigationonly)thatcanconflictwithotherusesandcausegroundwatermining

o Leachingofsaltsandnutrientsintothesurfaceandgroundwaters,whichcancausepollutionofdrinkingwatersuppliesforanimalsandhumans,excessivealgaegrowthinstreamsandponds,damagetoaquatichabitats,andodors.

o Flowofsedimentsintosurfacewaters,causingincreasedturbidly,obstructionofstreams,fillingofreservoirs,increasefloodpotential

o Flowofpestisidesintosurfacewaters,potentialbuild‐upinfoodchaincausingbothaquaticandterrestrialeffectssuchasthinningofbirds’eggshells.

o Thermalpollutionofstreamcausedbylandclearingonstreambanks,lossofshade,andthusgreatersolarheating.

• Air:Dustfromdecreasedcoveronland,operation/heavyexhaustofheavyfarmmachinery.

o Pesticidesfromaerialspraying

o Changedpollencount,humanhealtheffects

• Land:Erosionandlossoftopsoil,decreasedcover,andplowing,increasedwaterflowbecauseoflowerretention:degradationofproductivity.

o Displacementofalternativelandusessuchaswilderness,wildlife,aesthetics,etc.

o Changeinwaterretentioncapabilitiesofland

o Potentialdamagetosoilmicrobialpopulations

o Increasedsoilsalinity

o Depletionofnutrientsandorganicmatter

• Other:Promotionofplantdiseasesbymonoculturecroppingpractices

Occupationalhealthandsafetyproblemsassociatedwithpesticideresiduesandinvolvementinsprayingoperations(5)

MethanolMethanolcanbeproducedthroughcoalorwoodbyabundantnatural

gas.Toobtainthesematerialstheymustneedtorelyonthesamecountriesthatproducegasolinetoobtainnaturalgas.It’ssimilartoethanolgashoweveritisalsoveryexpensivetomanufactoriesformassproductuse.Researchhasprovenitwouldbedifficulttostartvehiclesundercoldweatherconditionswiththistypeofgas.Italsowouldproducemoregasemissionsintotheearth’satmosphere(8).

SavingtheUSIndustry

TheyFailedTheU.S.carindustrybecamelostinhighsalespercentages.Theywere

infatuatedbythefactthatthelargertheymadethecarsthemoretheysold.TheysoldarmymodeltruckscalledHummerstoconsumers.Theyproducedcarsthatwerenotinnovativeintechnologyorenergy.BythetimethewarinIraqhadbecomematuregaspriceshadjumpedto$4.00andashighas$7.00incertainareasoftheUnitedStates.Consumerswerealsomovingtowardthe“GoGreen”trend.Consumersweremoreconcernedaboutsavingnaturalresourcesandreuseofmaterials.Theeconomyalsomovedintoarecessioncausingconsumerstoseekcompactandevenmoreefficientvehicles.

Government

Initially,thegovernmentoftensetsuppoliciestoprotecttheindustry,buteventuallytheindustrymustfaceglobalcompetition.ThispastyeartheU.S.autoindustryhassunkenintotheeconomy’srecession.GMandChryslerhavereceiveda$17.4billiongovernmentbailoutinDecember.FordMotorisalsostrugglingbutoptedagainstseekingrescuefunds.TheObamaadministrationwillmakeabout$500millionavailabletoChryslerthroughtheendofApril2009asitseekstoreachanalliancewithFiat,andupto$5billionthroughMaytohelpGeneralMotorsrestructureoutsideofbankruptcy,anindependentoversightreport(9).

ConclusionTheU.S.carindustryhashadmanyopportunitiestoseekinnovativefuel

technology.Theyhavebeenhitwithtwolargeoilcrisesandchosetocontinuetheirlargedinosaurmentality(salesoverofpracticalalternativefueloptions).WhiletheyrefusedtochangetheirwaysforeigncarindustrycompaniessuchasToyota,Honda,andNissanhavefilledthevoidthatAmericanconsumershaveneeded.Theycompletelyhitthedinosaursoffcourselikethemeteorintheory.IftheUnitedStatescarindustrywantstoresurfaceasleaderstheymustmayattentiontotrends,technology,andconsumerneedsnotjustsalesnumbers.

References

1. PictorialTimelineofAutomobiles,MaryBells,2009 http://inventors.about.com.od/astartinventions/ss/Auto_Timeline.htm2. WhatWasTheFirstCar?AQuickHistoryoftheAutomobileforYoungPeople,William

W.Bottorff,pg.13. Trustandpower:consumers,themoderncorporation,andthemakingoftheUnited

Statesautomobilemarket/SallyH.Clarke.Cambridge;NewYork:CambridgeUniversityPress,2007.

4. Electricvehicles:socio‐economicprospectsandtechnologicalchallenges.RobinCowan,StaffanHultén.Aldershot;Burlington,VT:Ashgate,2000.

5. HistoryofHybridVehicles,2006http://www.hybridcars.com/history/history‐of‐hybrid‐vehicles.html

6. Alternativecarsinthe21stcentury:anewpersonaltransportationparadigm/RobertQ.Riley.Warrendale,Pa.,U.S.A.:SocietyofAutomotiveEngineers,c1994.

7. Oilinthe21stcentury:issues,challengesandopportunities,RobertMabro,Oxford;NewYork:PublishedbytheOxfordUniversityPressfortheOrganizationofthePetroleumExportingCountries,2006.

8. TheJapaneseautomobileindustry:abusinesshistory/KoichiShimokawa.London;AtlanticHighlands,NJ:AthlonePress,1994.

9. Chrysler,GMtoGetMoreGovernmentAidhttp://www.foxbusiness.com/story/markets/industries/transportation/chrysler‐gm‐government‐aid/