Enough about building efficiency. It's time to talk about the efficiency of our vehicles particularly as we debate bailing out the auto industry. You may want to stop reading right now if you support a taxpayer funded bailout of the auto industry because I don't. Charles E. Wilson,while president of General Motors Corporation, once said: “What’s good for the country is good for General Motors, and vice-versa.” It may be good marketing or lobbying but it's not true. Most of what has gone wrong with the US auto industry stems from our continual propping of this industry and the US auto industry has done little right for the US particularly when it comes to fuel efficiency.
Don't believe me? Here are the facts: Cars have shown relatively little improvement in fuel efficiency over the past forty years and even less over the past 100 or so years since their invention. Their efficiency improvements surpass only the truck’s, which has remained virtually flat or has even dropped in the past forty years. Over a 54-year time span, from 1949 to 2003, the mileage performance of transportation vehicles has improved by only 7.3 mpg, from 15 mpg to 22.3 mpg. Most of that gain occurred within the time frame of the enactment of federal Corporate Average Fuel Economy (CAFE) mandates in 1975 that required the car companies to nearly double the average fuel economy of passenger cars or light trucks by 1985. By 1982, the combined average fuel economy of new U.S. cars and trucks had reached around twenty-five miles a gallon—about where it stands today. The original legislation for CAFE improvements died in 1985 at the hands of the U.S. auto industry and its supporters.
One hundred years after their popularity took root, cars are still powered mostly by gasoline and still use an internal combustion engine. In the same time period that we have been driving cars, the computer has been created, vastly improved, and reduced in size; medicine has found cures for countless diseases; men have landed on the moon; and planes have become a common mode of transportation, moving more people farther and faster. The century that started with steam-powered ships as the most sophisticated means of transport ended with the space shuttle and fuel inefficient cars.
Automobile fuel efficiency has improved 50 percent over the 54-year period from 1949 to 2003. If you think for a moment that is a good rate of improvement, compare it to Moore’s Law in the information technology industry. Moore’s Law, based on a statement made by Gordon Moore, a cofounder of Intel, in 1965, says that the rate of technological development with respect to component cost will double every twenty-four months. Moore made this statement more as an observation than a prediction, but it became widely accepted as a goal for an entire industry. It has pretty well held true, and digital technology has profoundly changed Americans’ lives in much the same way cars have but at a much lower cost.
Fuel efficiency has never been a hallmark of the U.S. auto industry. A 1956 report of the U.S. Senate’s antitrust subcommittee contended that “Efficiency to General Motors is apparently its ability to achieve its planned return on investment.”
Let’s face it, the fuel efficiency of the vehicles the Americans build and drive should be better. The fact that it isn’t is symptomatic of the general resistance to change in the American automobile industry. The auto industry is the world’s largest manufacturer, and the American automakers long dominated the world industry. As the largest manufacturer in the U.S. since the early 1920s, automaking has been instrumental in shaping labor relations, corporate structure, and political influence. It has exerted enormous influence on economic events, and the U.S. government believes that “without question a successful and growing automobile industry is critical to the overall strength of the U.S. economy.” The lessons of the U.S. automobile industry vis-à-vis fuel efficiency offer insight into our conundrum of energy inefficiency. This resistance to change in the automobile industry has been fed by public policy and government regulation that protected the car industry from market forces and competition, a focus on car styling and marketing over performance, and the death of a product culture in American car companies.
With America’s rush to become a middle class society and its insatiable demand for cars, it was impossible in the heyday of the car companies for them not to make money. The inevitability about increasing sales led to little focus on improving the product. From 1949, when the automatic transmission was introduced, to the late seventies, the cars remained almost the same. What innovation there was came most reluctantly. While foreign carmakers were rapidly introducing new features into their cars to improve their performance, most change that the Big Three car companies brought to cars in that time period was focused on taking the cost out of them in order to increase corporate profit. The effect was to weaken the integrity and quality of the vehicles.
The size of cars in post-World War II America grew at an amazing rate—from 90 to 100 cubic-inch engines, to 160, to 250, and finally to Chevies with 325 and 400 cubic-inch engines. Gas mileage went down proportionately. Hal Sperlich, who was one of Detroit’s leading car designers, said car engineers no longer sought maximum efficiency but rather deliberate waste. This was viewed as feasible due to the discovery of immense amounts of oil in the Middle East even while American reserves remained static. On top of that, the countries that held these reserves were viewed as weak and they attributed to Americans and the West great power. No one foresaw that someday these oil-holding countries would form a powerful cartel, OPEC, the Organization of Petroleum Exporting Countries.
As the Big Three’s market share and sales and size of cars grew, it was as if they were minting money. Ford and Chrysler were afraid to cut prices for fear of a price war with GM that they would lose. The result was that consumers paid more for the same product. In this situation, American carmakers turned cautious and staid. According to George Romney, one-time chairman of American Motors, the companies became muscle bound and mindless in the U.S. market—locked into mindless practices but unable to break out because they were so profitable. According to Romney, “There is nothing more vulnerable than entrenched success.”
Neither Detroit nor the buying public seemed interested in the late 1950s in smaller, more efficient vehicles. For one thing, designing and building big, heavy gas-guzzling vehicles was easier. It is harder to design and build small, efficient, yet high-quality cars that handle well and appeal to consumers. It takes great skill, creativity, and will. The American carmakers built monopoly products like the Russians in the Communist era measuring the success of the iron beds they built by weighing them. The more they weighed the better the beds were considered to be, even though the weight of a bed has nothing to do with how comfortable it is or how easy it is to move.
Don't believe me? Here are the facts: Cars have shown relatively little improvement in fuel efficiency over the past forty years and even less over the past 100 or so years since their invention. Their efficiency improvements surpass only the truck’s, which has remained virtually flat or has even dropped in the past forty years. Over a 54-year time span, from 1949 to 2003, the mileage performance of transportation vehicles has improved by only 7.3 mpg, from 15 mpg to 22.3 mpg. Most of that gain occurred within the time frame of the enactment of federal Corporate Average Fuel Economy (CAFE) mandates in 1975 that required the car companies to nearly double the average fuel economy of passenger cars or light trucks by 1985. By 1982, the combined average fuel economy of new U.S. cars and trucks had reached around twenty-five miles a gallon—about where it stands today. The original legislation for CAFE improvements died in 1985 at the hands of the U.S. auto industry and its supporters.
One hundred years after their popularity took root, cars are still powered mostly by gasoline and still use an internal combustion engine. In the same time period that we have been driving cars, the computer has been created, vastly improved, and reduced in size; medicine has found cures for countless diseases; men have landed on the moon; and planes have become a common mode of transportation, moving more people farther and faster. The century that started with steam-powered ships as the most sophisticated means of transport ended with the space shuttle and fuel inefficient cars.
Automobile fuel efficiency has improved 50 percent over the 54-year period from 1949 to 2003. If you think for a moment that is a good rate of improvement, compare it to Moore’s Law in the information technology industry. Moore’s Law, based on a statement made by Gordon Moore, a cofounder of Intel, in 1965, says that the rate of technological development with respect to component cost will double every twenty-four months. Moore made this statement more as an observation than a prediction, but it became widely accepted as a goal for an entire industry. It has pretty well held true, and digital technology has profoundly changed Americans’ lives in much the same way cars have but at a much lower cost.
Fuel efficiency has never been a hallmark of the U.S. auto industry. A 1956 report of the U.S. Senate’s antitrust subcommittee contended that “Efficiency to General Motors is apparently its ability to achieve its planned return on investment.”
Let’s face it, the fuel efficiency of the vehicles the Americans build and drive should be better. The fact that it isn’t is symptomatic of the general resistance to change in the American automobile industry. The auto industry is the world’s largest manufacturer, and the American automakers long dominated the world industry. As the largest manufacturer in the U.S. since the early 1920s, automaking has been instrumental in shaping labor relations, corporate structure, and political influence. It has exerted enormous influence on economic events, and the U.S. government believes that “without question a successful and growing automobile industry is critical to the overall strength of the U.S. economy.” The lessons of the U.S. automobile industry vis-à-vis fuel efficiency offer insight into our conundrum of energy inefficiency. This resistance to change in the automobile industry has been fed by public policy and government regulation that protected the car industry from market forces and competition, a focus on car styling and marketing over performance, and the death of a product culture in American car companies.
With America’s rush to become a middle class society and its insatiable demand for cars, it was impossible in the heyday of the car companies for them not to make money. The inevitability about increasing sales led to little focus on improving the product. From 1949, when the automatic transmission was introduced, to the late seventies, the cars remained almost the same. What innovation there was came most reluctantly. While foreign carmakers were rapidly introducing new features into their cars to improve their performance, most change that the Big Three car companies brought to cars in that time period was focused on taking the cost out of them in order to increase corporate profit. The effect was to weaken the integrity and quality of the vehicles.
The size of cars in post-World War II America grew at an amazing rate—from 90 to 100 cubic-inch engines, to 160, to 250, and finally to Chevies with 325 and 400 cubic-inch engines. Gas mileage went down proportionately. Hal Sperlich, who was one of Detroit’s leading car designers, said car engineers no longer sought maximum efficiency but rather deliberate waste. This was viewed as feasible due to the discovery of immense amounts of oil in the Middle East even while American reserves remained static. On top of that, the countries that held these reserves were viewed as weak and they attributed to Americans and the West great power. No one foresaw that someday these oil-holding countries would form a powerful cartel, OPEC, the Organization of Petroleum Exporting Countries.
As the Big Three’s market share and sales and size of cars grew, it was as if they were minting money. Ford and Chrysler were afraid to cut prices for fear of a price war with GM that they would lose. The result was that consumers paid more for the same product. In this situation, American carmakers turned cautious and staid. According to George Romney, one-time chairman of American Motors, the companies became muscle bound and mindless in the U.S. market—locked into mindless practices but unable to break out because they were so profitable. According to Romney, “There is nothing more vulnerable than entrenched success.”
Neither Detroit nor the buying public seemed interested in the late 1950s in smaller, more efficient vehicles. For one thing, designing and building big, heavy gas-guzzling vehicles was easier. It is harder to design and build small, efficient, yet high-quality cars that handle well and appeal to consumers. It takes great skill, creativity, and will. The American carmakers built monopoly products like the Russians in the Communist era measuring the success of the iron beds they built by weighing them. The more they weighed the better the beds were considered to be, even though the weight of a bed has nothing to do with how comfortable it is or how easy it is to move.
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