• Hybrid vehicles Hybrid vehicles From the St. Louis Post-Dispatch – October 29, 2004 With Halloween just around the corner, let’s conjure up a scary story for about 10,000 Ford and DaimlerChrysler workers in St. Louis. Chrysler workers make big
• Hybrid vehicles
Hybrid vehicles
From the St. Louis Post-Dispatch – October 29, 2004
With Halloween just around the corner, let’s conjure up a scary story for about 10,000 Ford and DaimlerChrysler workers in St. Louis.
Chrysler workers make big pickups and mini-vans. The folks at Ford make big SUVs. They are heavyweight gas guzzlers. As our story begins today, oil is selling for $51 a barrel, up 78 percent over one year. That has sent the price of gasoline up to an average of $2.03 per gallon nationally, according to AAA.
So far, the shocking gas prices haven’t really lessened America’s love of heavy metal. Sales of light trucks – mainly pickups, SUVs, mini-vans and vans – are actually up 5.8 percent this year, according to Wards AutoInfoBank. Then again, Americans really don’t expect gas prices to remain this high forever. The soothsayers of the oil market think prices are more likely to fall over the long run.
But let’s suppose the analysts are wrong. After all, few were predicting $51-a-barrel oil a year ago. If gasoline were to hit, say, $2.50 a gallon, filling a Hazelwood-made Ford Explorer’s gas tank would cost $55. Filling up a Fenton-made Dodge Caravan would cost $50. Would customers put up with that, or switch to smaller cars?
If they moved toward smaller vehicles, would all those workers in Fenton and Hazelwood still have jobs? After all, American automakers are awash in capacity; they have more auto plants than they need. If an auto plant’s product stops selling, there would be great temptation to simply close the plant.
The Ford plant in Hazelwood barely escaped the grim reaper this year, and Ford plans to cancel one shift in January. One of Chrysler’s two Fenton plants closed for three years in the early 1990s. You could easily imagine the oil-price bogeyman spreading pink slips across Fenton and Hazelwood.
We are spinning this chilling yarn to make a point. The last great oil crisis in the 1970s caught Detroit flat-footed. Americans looking for fuel economy turned away from brand loyalty and turned to the Japanese.
It’s possible – although far from certain – that customers this time might turn to hybrids for fuel savings. The Booz Allen Hamilton consulting firm recently predicted that hybrids could take 20 percent of the auto market in six years if gasoline prices stay high. If American automakers want to keep selling big vehicles, they’d better get on the hybrid ball.
Unfortunately, the Japanese are way ahead of us in hybrids, which combine gasoline and electric engines to reduce fuel use. Ford, the greenest of the big three, just introduced a hybrid version of its Escape SUV. It’s a hot machine, getting 36 miles per gallon city and 31 on highways.
But GM (which makes full-sized vans in Wentzville) and DaimlerChrysler are falling way behind, with no hybrids scheduled for market anytime soon.
Meanwhile, the Japanese are gearing up. Sales of the Toyota Prius are expected to hit 100,000 next year. Toyota plans to roll out hybrid Lexus and Highlander SUVs in 2005. Honda will add a hybrid Accord to join its hybrid Civic.
All that hybrid-making experience means the Japanese will be the first to figure out how to reduce the $3,000 price differential between hybrids and conventional vehicles. That difference eats up much of the gas savings and makes buying a hybrid iffy, even with a special federal tax deduction.
American automakers spent the 1970s and 1980s playing catch-up to the Japanese both in quality and in meeting consumer tastes. If gasoline prices head higher, we may see a repeat. That would be a sign of very poor management in Detroit – with ghastly consequences for autoworkers here.
