The future of the past

A new face on an old idea.


This car represents the face of the American car industry's future. Both Ford and Chevy, the latter a flagship brand of GM, are looking back to the good ole' days of American muscle, when gas prices were irrelevant (probably because they weren't $3 a gallon) and when the only "trans" in the news was the legendary TransAm sports car. The makers recently at the Detroit auto show released prototypes of cars to hit the market beginning in 2008-2009, and it seems that when all else fails, as it has, the companies are hoping the glorious past can revive the bottom line.

For American companies, the recent Detroit Auto Show has given Detroit a chance to show their future wares, but has also forced American car makers' plights under the magnifying glass, and it's not necessarily an enviable plight. The companies (GM and Ford) are losing billions of dollars each year (Ford lost a cool $2.4 billion alone in 3Q 2005, GM lost a measly $800m), Toyota just passed Chrysler and is poised to slip past Ford into position as the #2 U.S. seller, and while the U.S. companies are struggling with layoffs and cost-cutting their Japanese rivals are building more plants in the US. GM recently complained in this article that Toyota now has more lobbying clout with congress.

Forget the financials, and try to remember how these companies generate revenue: they sell cars. Unfortunately the American companies haven't been able to do that very well recently. Why is that? Well, have you asked yourself recently if you really want to by a Ford or GM? With zillions of SUV and pickup truck options, and bland-looking efficient models (this author wonders if it is strategy to make gas-efficient-models physically unattractive), the onus, of course, will be on you to answer that question as a consumer in the coming decade. I certainly cannot make predictions.

It does, however seem a bit disappointing that "concept" cars of the future are really old designs dug out of the glory days. Will the new TransAm, the redone Camero (in a picture at the top) and Ford's promise to produce a new Mustang each year as it did in the 90s really resonate with today's buyers? Are muscle and extra cup holders more important than gas-mileage, utility and luxury? Cadillac (a GM brand), in an ad campaign over the holiday season, hyped free navigation systems, as if to broadcast to the consumer that satellite navigation was finally available in their cars (and possibly admit that it's more convenient to use an onboard system instead of call someone via the *On-Star system. Who wants to have to call a real person when a cool computer can show you a map, anyway?). I still remember in the mid-1990s when I first saw a Lexus equipped with satellite navigation, over five years before any Cadillac model could say the same. Further, Ford and GM's newest cars do not offer the plethora of less gasoline-hungry models that expected, although it seems that at least in the short-term Detroit gambled correctly that oil prises would continue their free-fall, now nearly $50 a barrel, down from being regularly over $60 in the past year and reaching $70 at one point.

This could be short-sighted, especially in regards to oil consumption. First, for better or worse, oil will continue to be a political lynch-pin and a reasonable argument stands that an addiction to oil isn't necessarily great for American national security interests. Second, global warming is still warming. As the crisis becomes more serious, more and more states will place further restrictions on auto emissions and oil consumption. Third, gas prices could rise again in the future. Their low price now is no guarantee that they will stay here for good.

Recently on a family vacation, a rental car salesman offered my parents a large Chevy SUV instead of the mid-size car they had ordered. When they turned him down, he offered to let them pay for the compact-size car and still take the SUV. Strangely, the GM and Ford concept cars of tomorrow have gas mileage only slightly better than their SUV lines. That same salesman is probably grimacing.