Detroit City, Part Deaux

There is a bit of wisdom expressed by the philosopher, George Santayana that seems to elude those in power in this country. That sentiment whose meaning has so far escaped political leaders and captains of industry alike states simply that if you cannot remember the past, you are condemned to repeat it, a situation not unlike the scenario in the movie “Groundhog Day.” Unfortunately our leaders aren’t having the epiphany that Bill Murray’s character eventually realizes in Hollywood’s version of this nightmare, and so are subject to recurrent bad dreams.

One particular group that keeps getting caught up in this vicious cycle is the American automobile industry. They are becoming a victim yet again to their inability, or their unwillingness, to adapt quickly to a changing market that once again finds them manufacturing gas-guzzling behemoths at a time when the price of fuel is skyrocketing.

Yes, this is the same situation that played itself out in the 1970’s, during the Arab oil embargos, when American car makers, who had surrendered the compact market to the Japanese during the previous decade, found themselves on the outside looking in, with an inventory that wouldn’t sell, and an inability to produce a product that had the quality the public demanded. As a result, they began to lose market share to companies like Toyota, a process that has begun to pick up momentum yet again.

And once again, the reaction to declining sales is questionable. That bastion of American know-how, General Motors, for example, has chosen to retrench. It has announced plant closings, and massive job cuts to help it offset what can only be described as a horrible year, fiscally speaking.

What G. M. is doing is not unlike a retreat on the battlefield in the face of a superior force. And when one army retreats, what happens? That’s right! The foe advances. And Toyota now sees its chance to occupy a spot it has coveted for many years, that of the world’s largest carmaker. G. M. had no sooner declared its intentions than Toyota declared its. Within days of the announced plant closings, Toyota announced that it would increase its manufacturing ability in this country by using rival Suburu’s plant in Indiana to produce up to an additional 100,000 vehicles a year. Now who would have seen that coming?

So where have the American car manufacturers gone wrong? Maybe this time it was in taking the easy way out. Both the American public and the domestic car industry were lulled to sleep by the relatively cheap gas prices of the late ‘90’s and the early years of the Bush presidency. So it was easier for G. M., Ford, and Chrysler to build the big SUV’s that were all the rage while fuel was relatively cheap. There was, after all, a much bigger profit margin in these vehicles.

But this was true only while fuel was cheap. There is no need to rehash the events of this last year. Everyone knows how gas pushed first past $2.00 a gallon, and then, in the aftermath of Katrina, past $3.00 a gallon. And had Rita been as severe as Katrina, there was talk of gas going as high as $6.00 a gallon.

Of course, that didn’t happen, but there is always next hurricane season. And anyway, once gas prices got to a certain point, the romance of driving a big SUV was suddenly gone. And as was the case in the ‘70’s, American manufacturers are left with few viable products.

So, is the answer to retrench, as G. M. has done, and as Ford may do, as well? The answer is obviously, no. Americans have always been ready to answer a challenge. And though the advantage the Japanese have now is huge, it is not so huge that it cannot be overcome. American car companies have come up with great innovations in their history. Ford, for instance, was the first company to use the assembly line, and so is as responsible as any company for making cars affordable for the average American.

But what the domestic companies cannot afford to do is to be so myopic as they have been in the last decade or so. What was lost in the love affair with the gas guzzlers of late was the commitment to that average American family. Where there was once a Model T, or an Impala, there are now Corollas, and Camry’s.

So, what will it take to make up all that lost ground? Somewhere in these companies is a product that has yet to make its debut, and which will start them on the road to recovery. These are the same companies that brought us the Corvette, the Mustang and the mini van, among other innovations. Surely these same companies, can, with whatever amount of effort it takes, win back the confidence of the American public, and bring themselves back from the brink of extinction, a destination to which, through inept management, they seem to have driven themselves.