I spoke with Rep. Gary Peters, whose district is in Oakland County, just outside of Detroit. I questioned the value to taxpayers of spending so much money bringing Speaker Pelosi and Peters’ other colleagues in for what amounted to a dog-and-pony show.
Peters agreed that one of the problems that people in Michigan and the auto industry faced was that his colleagues were “completely clueless” about the auto industry, and he hoped that the trip might educate them. How broad an education you can get on such a brief trip is open to question, but the fact that many of his colleagues in Congress and in the Obama administration are clueless was plain to see from the LaHood and congressional press conferences.
LaHood told the assembled automotive journalists about the bright future the domestic automakers face now that they’ve been assisted by the Obama administration. Nobody disputes that GM and Chrysler would most likely not have any future at all without the bailout. The transportation secretary based his remarks, he said, on a visit he made to Detroit last fall when he spent “half a day” at each of the domestic automakers’ headquarters. The “half a day” remark brought smiles to many in the room who have spent years following the auto industry. The smiles broadened when he referred to “new products” from Chrysler. Even people outside the auto industry know that Chrysler’s quiver is empty.
That was just too much for one reporter, who challenged the cabinet member:
In your opening remarks you mentioned new products by Chrysler, could you expand upon that?
LaHood’s first instinct was to punt, but instead he reversed course and doubled down. Punting would have been the wiser choice.
Well, you know what? I’ll let Chrysler do that and I think as you all get around this massive showroom you’ll see what I mean, but they’re on the cutting edge of developing the kind of products that I think people in this country and also in other countries are really gonna feel very favorable towards.
Walk around Chrysler’s display on the show floor upstairs in Cobo Hall, and you will see exactly zero new products.
There was a Lancia rebadged as a Chrysler concept (dubbed “Guido” by the auto blogosphere), and a couple of cute little Fiat 500s to show that Chrysler was now under Fiat’s wing, but nothing at the Chrysler stand could be described as “new.” Chrysler did display a number of new trim and feature packages on its now aging stable of cars.
Maybe the die-cut decals are what LaHood meant by “cutting edge.”
During the “merger of equals,” Daimler hollowed out Chrysler and then sold out to Cerberus, which invested almost nothing in new product development. With the compact Caliber, midsize Sebring, and midsize Avenger generally considered worst-in-class, Chrysler has nothing in the pipeline to compete in those vital market segments. Everyone knows that — except the U.S. secretary of transportation.
Chrysler particularly, the kind of designs that they’re doing, the kind of innovative approaches that they’re taking is gonna really put them in the marketplace like they’ve never been before … as innovative, creative as I’ve ever seen in the industry.
True, Fiat is bringing in new blood and new designs, but nothing LaHood would have seen while breezing through Auburn Hills last October is going to make a difference to consumers or to Chrysler’s bottom line any time soon. It takes a minimum of two years to design and build a completely new car, and that’s after some time has already been taken to design, evaluate, and approve concepts.
In his remarks, Secretary LaHood referred to “the kind of green car that Americans are looking for.” Speaker Pelosi and Majority Leader Hoyer also stressed how government financial aid is helping the domestic automakers move to hybrids and electric vehicles, vehicles Pelosi and Hoyer claimed that consumers want.
The problem is that while hybrid sales in the U.S. indeed went up in 2009 as the overall market was flat or declining, they still represent less than 3% of light vehicles leased and sold in the U.S. Between LaHood’s praise for Chryslers “new” products and Pelosi’s fantasy that 3% of the market represents what consumers want, it appears that the people running our government know nothing about a major industry that employs, ultimately, one in twelve Americans.
Either that, or they are incredibly cynical and will say whatever they think they can get away with.
Americans may be looking for green cars, but they may not want to pay a premium. Hybrids and EVs are not cheap and will not repay their price premium at current gasoline prices. The politicians may say that consumers want green cars, but they know that without substantial government subsidies, the new technologies are too expensive for immediate mass acceptance. When Chevy’s extended range EV car, the Volt, goes on sale, it will carry a $7,000 federal tax credit. Just before Speaker Pelosi’s press conference, Billy Ford announced that Ford would be investing $450 million to assemble lithium-ion battery packs, a gas-electric hybrid vehicle, and a plug-in hybrid vehicle in Michigan. With $188 million of that coming from tax credits, it’s not surprising that Michigan Gov. Jennifer Granholm joined with the Ford chairman in making the announcement.
You expect to see certain things at a car show: shiny new cars, exciting concepts, and pretty models. I think we can add politicians to that list for the foreseeable future.