Doomed. The U.S. auto industry is doomed. That's the only conclusion one can come to after learning of comments made at the North American International Auto Show by General Motors Vice Chairman Robert Lutz on Tuesday morning. The Wall Street Journal summarized his comments:
Mr. Lutz also said that the regulatory environment for auto makers "has never been more challenging" and increases the costs of building cars. While he said he expects the new Democratic-controlled Congress will be more understanding on health care issues, he also said he expects it to be less understanding to GM's concerns about fuel economy regulations.
Let's clarify. By being "understanding" Lutz means the Democrats may support some kind of federal healthcare plan that would relieve General Motors of the great burden of providing health benefits to its own workers. But by being "less understanding" he means that they also may make life tougher for General Motors by requiring more stringent fuel economy standards.
For years, Lutz has been one of Detroit's most vocal critics of mandated fuel economy standards. He is notorious for saying that any attempt to increase such standards would be "like solving the nation's obesity problem by telling the clothing manufacturers they are no longer allowed to manufacture large sizes."
Translation: The only way for American automakers to meet tighter requirements would be to abandon making all big SUVs and trucks, and focus only on selling tiny little cars that would inevitably castrate the flower of American driver-hood.
But what about vaunted American ingenuity and technological knowhow? No dice, said Lutz in December. We're maxed out: We've done everything we can do to get the best mileage out of our cars.
"There is no technological bag of tricks that enables much better fuel economy than we have today. We already have maximum aerodynamics, active fuel management, six-speed transmissions, electric power steering, direct injection, and hundreds of dollars (per vehicle) of other technology that saves a tenth of a mile per gallon here, two-tenths there. Despite what alarmists may think, we don't have any magic 100-mpg carburetor that we're holding back because we're in bed with the oil companies."
The National Academy of Sciences and the Union of Concerned Scientists disagree. For a complete accounting of Detroit's mostly successful 30-year effort to fend off or emasculate every congressional attempt to institute tougher standards, check out the Union of Concerned Scientists' report "Life in the Slow Lane: Tracking Decades of Automaker Roadblocks to Fuel Economy." Read that, and then review Robert Lutz's comments again.
You may, like me, find the most poignant part to be Detroit's theory that tougher fuel economy standards will hand even more market share to the Japanese, resulting in closed plants and the loss of good American jobs. Detroit automaker executives have been making that particular argument for decades. And Congress has buckled repeatedly under their pressure.
But as anyone who has followed the auto industry news for the last year knows, GM and Ford could not compete anyway and ended up closing scores of plants and laying off thousands of workers.
Did it ever occur to Mr. Lutz and his brethren that if Congress had forced Detroit to build more fuel-efficient cars, those jobs might have been saved, instead of lost?
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