CNN Money has an article today that there is a possibility that the big three automakers could go bankrupt. Although I think this is just one of those attention getter headlines the possibility does exist. GM lost $15 billion dollars in the last quater and they probably can't afford to do that much longer. If it does happen will the upper management of GM, Ford or Chrysler be held accountable? After all I (and probably you) could see this oil crisis coming from 20 years away -and I'm no analyst. What was thier backup plan if oil prices increased and demand for gas guzzling SUV's disapeared? Did they think it would never happen? I'm pretty sure they knew it would happen but had limited options to deal with it. They have not been the most profitable of businesses for years and they were able to sell all the SUV's they could make at good prices. The only thing they couldn't sell were conservation ideas like smaller cars and hybrids. Very few people in the United States wanted a small car from the big three and even fewer wanted to pay a premium for a hybrid that would save them a few miles per gallon.
Some part of me thinks that the big three were shortsighted and greedy and wanted no part of products like fuel efficient cars and trucks. I could believe in a conspiracy theory between big oil and the big three. They might have conspired to only produce vehicles that used lots of gas - but they really didn't have to. The big problem was us. We kept buying those SUVs because we liked them. We kept buying gas because we liked driving our big SUVs. Driving the biggest vehicle possible is fun! On some level though I think they are negligent for not confronting the issue years ago. They run all kinds of information and dis-information campains why not one more on how we ought to be responsible and conserve a valuable resource? They have enough influence they could have developed not just the market for a conservation product but a product itself that could have been in place now to protect them from this eventuality. I know ove the past few years they have begun to address this shortcoming but it is a classic case of too little too late. How late? remember 1973? If not there was an Arab oil embargo then and people lined up at gas stations everywhere becuse of a real or illusory shortage (who knows?).
This means that they had a 35 year window. They could have wasted 15 years and still had a 20 year window. I'm pretty sure they wasted about 30. This was plenty of time to develop power systems and vehicles that got significantly more than 10 miles to the gallon regardless of size. They would have said the market would not support or require more efficient vehicles. I don't know about you but I would have preferred a pickup truck or SUV with 30 miles to the gallon versus 10 miles to the gallon - I'm sure lots of people would have. Those that wanted products that got 10 miles to the gallon could still buy them. They may not want to pay the premium for fuel efficiency. I'm sure the fuel efficiency premium would have cost GM less than $15 billion dollars.
