Like a rock, chargin' from the gate; Like a rock, carryin' the weight

Certain members of my family have cute little cars from Toyota that get ridiculously good gas mileage because of their hybrid engines. Yes, they drive Priuses (hereafter referred to as Prii), and until this year they could claim they got 55 miles per gallon. Those days are no more, however. Under new CAFE (Corporate Average Fuel Economy) standards, mileage will be calculated under a new formula that involves more stop-and-go driving, use of the air conditioning during the test, and cold weather driving, all lessening the amount of time during which the cars can run using their electric motor. As a result, Prii will now officially be credited for 44 MPG, a 20% drop that is, in percentage terms, among the largest changes for any make of car. As is to be expected, Toyota executives are furious, and they're not afraid to express it. According to an interview at commondreams.org:

Toyota Motor Corp., which makes the popular Prius hybrid, now rated at 60 miles per gallon in the city and 51 on the highway — a combined rating of 55 mpg — supports the changes.

"This doesn't change the car or the technology, just the way the mileage is calculated," said Ming-Jou Chen, spokeswoman for Torrance-based Toyota Motor Sales USA. "It makes the estimate closer to real-world numbers, and we fully support that."

What what what? They support the program? Apparently, besides showing some of the largest improvements in quality over the past twenty to thirty years, Toyota executives actually prepared for the patently obvious increase in mileage standards by being among the first to market with a hybrid, and are now more than ready to deal with the new fuel economy standards.

The Japanese automakers aren't the only ones who see the writing on the wall. Ford, which lost $5.8 billion (yes that's billion, as in losing approximately $20.00 per American, or about $1 for every human on the planet) has a plan. The plan is.... to copy Toyota. Today, Ford executives met with Toyota executives, apparently to learn about Toyota hybrid electric technology. Of course, Ford has a great track record with that:

Ford also has its own hybrid program, but it cut back on hybrid development earlier this year, when it decided to place more of an emphasis on developing flexible fuel vehicles that can run on gasoline and another type of fuel, such as ethanol.

OK, that was a great plan, how did it work out? Oh yeah, lost $5.8 BILLION in the third quarter alone.

Of course, Ford is only America's second largest automaker, after General Motors. I know you're wondering, how did they react? Are they prepared to embrace the future? According to GM's vice-chairman, Bob Lutz, not quite:

"For one thing, it puts us, the domestic manufacturers, at odds with the desires of most of our customers, namely larger vehicles," Lutz said in a year-end posting on a Web site maintained by GM.

He added: "That effectively hands the truck and SUV market over to the imports, particularly the Japanese, who have earned years of accumulated credits from their fleets of formerly very small cars."

Mr. Lutz, allow me to play you a dirge on the world's smallest violin. If GM was really doing well by it's customers, then why is Toyota expected to pass them next year as the world's largest carmaker? Why did GM boast a $10 BILLION loss last year? Is it really a good sign when the $3 BILLION loss so far this year is a significant improvement? Perhaps more importantly, how is it that the same rules crush GM but allow Toyota to sell so many more cars? Why isn't Toyota at odds with the American customers?

No, GM has fallen victim not to new mileage standards, but to a billion-dollar case of making a car that is widely considered to be a piece of crap, or at the very least one that can't hold it's value:

And while all of the top 10 models have either Japanese or European nameplates, nine of the bottom 10 are domestic models.

and can't challenge the Japanese automakers in overall quality:

When it comes to picking the best, this year hats are off to Japan, according to Consumer Reports' 2006 Best Car Picks. While Japanese cars have long had a significant presence on the consumer ratings magazine's top picks, this is the first year since it started publishing the list in 1997 that they fill all 10 spots.

Let it be known, I criticize because I care, speaking as the owner of a lovely and occasionally reliable 1998 Saturn, which runs really well so long as the weather is warm and dry (like your average Illinois winter...NOT!).

Beyond failing to match Honda, Toyota, et al. in quality, the Big Three companies have punted away their future profits, primarily because it seems that the personal politics of their leadership blinded them to the proper business strategy. GM especially is being crushed under the weight of the benefits owed to retired employees, and should have been way ahead of the curve pressing for some form of national government-provided universal healthcare plan. Instead, they seemed to view this as a bunch of leftist claptrap, and decided to suck up the billions of dollars of long-term liabilities rather than work with the people who could help them out of their mess (Read: Democrats). How Detroit never got behind this push is frankly beyond me; the short-sightedness should have provoked share-holder lawsuits.

Detroit also managed to drink the kool-aid by listening to their own anti-environmental propaganda. It's nice to believe that gasoline reserves will last us indefinitely, but it's also nice to believe in Santa Claus. Many, many, MANY people have been predicting a growing oil crunch (just google for "peak oil"), and an accompanying rise in gas prices to $3 per gallon and beyond (way beyond; I'm willing to bet a non-trivial sum on the price of gas being higher in the future). Detroit seems to have viewed this too as leftist hippie patchouli-incense latte-drinking sushi-eating agitprop, and forgot to hedge properly against the likelihood of high gas prices and a return to fuel efficient cars instead of the ridiculous Urban Assault Vehicles polluting our roadways today.

Just like the Bush administration has repeatedly claimed that situations in Iraq are worse that we expected, so does Detroit view high gas prices as a surprise, which sounds like a fine excuse until you realize it represents a complete dereliction of duty. Repeat after me: Hope for the best, but plan for the worst. If you plan for the best (remember "we'll be greeted as liberators!"), you are completely unprepared for what happens if your most wildly optimistic fantasies don't come true, and you end up losing thousands of lives getting enmeshed in someone else's civil war, or, if you're really really lucky, losing only $10 BILLION dollars in a year (BTW, it goes without saying that the airline industry is just as guilty of wild flights of fancy, pardon the pun). In the end, watch for Detroit to go into an even more hyper-patriotic mode to fight the onslaught of better cars built in the US by companies headquartered overseas, and watch as they continue to get pummeled. To paraphrase John Mellencamp, we'll get pummeled
From the east coast to the west coast
down the dixie highway back home
After all, this is our country.