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Editorial: Auto-pilot / The not-so-Big Three return to old habits
Tuesday, May 24, 2005

As American automotive giants Ford and General Motors whine about low profits due in large part to their perennial reliance on gas-guzzlers and their frustrating inattention to the realities of the global marketplace, the worldwide success of firms like Toyota should be instructive to them.

Ironically, Japanese automakers, worried about a return of the backlash they saw in the 1980s in the United States, are wisely trying to blunt the contrast, with, among other things, joint venture proposals.

For the Big Three, the numbers are not pretty. GM lost $1.1 billion in its first quarter. Its bonds are at junk status. In April its stock hit a 10-year-low. And Ford chief executive Bill Ford is forgoing a salary until his firm's books are no longer in the red.

The American Big Three -- Ford, GM and the Chrysler Group of DaimlerChrysler -- saw their market share drop from 63 percent to about 57 percent over the past four years.

Detroit's auto moguls have brought their current doldrums on themselves. For years they've demanded the higher profits that big vehicles bring over the less spectacular returns of smaller cars. Wedded almost exclusively to the internal combustion engine, they've not led in bringing alternate-fueled vehicles to production. Nor have they anticipated markets.

In the meantime, both Japan-based Honda and Toyota, which now build vehicles in the United States and around the world, have consistently beaten Detroit on miles per gallon and have skipped ahead with innovative hybrid cars. These make sense to thrifty Americans in these days of uncertainty about jobs, pensions and gasoline prices.

While Detroit appears to have put most of its experimental eggs in the hydrogen fuel cell basket, the Toyota Prius, fueled by battery and gasoline to the tune of more than 50 mpg, and hybridized-on-demand Honda Civics and Accords, are already on the road. Toyota will soon be building hybrids in Kentucky.

In the meantime, alternate-fuel enthusiasts, who gathered recently in Saratoga Springs, N.Y., for the 17th annual Tour de Sol, showed off vehicles powered by everything from solar panels to compressed natural gas to bio-diesel.

Detroit put itself in this predicament. But the condition need not be permanent. If they want Americans to keep buying American cars, it had better not be.

First published on May 24, 2005 at 12:00 am
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