When Fuel Efficiency was un-American

Haven’t we seen this before? As Chrysler, Ford Motors and General Motors beg both the Bush administration and the transitional team of President elect Barack Obama to relieve them of financial woes, the similarities with the late 1970s can’t be ignored. Then Treasurer Secretary G. William Miller produced, with President Jimmy Carter’s approval, a bailout to prevent Chrysler from sliding into the oblivion of bankruptcy. The issue then, if the current executive board would care to remember, was spiraling oil prices.

Again, as now, the debate arose as to whether federal intervention to right such disastrous enterprises should take place. Miller made it clear then that it was “neither desirable nor appropriate” for ailing companies to expect carte blanche assistance. Saving Chrysler was essential to the “public interest” of the United States. Now, the same thing is being said about that chrome giant, General Motors. To not lend a helping hand would, as one American commentator, Jim Cramer claims, cause “a major meltdown in the US and worldwide trust system.”

But was it in the public interest this time to pardon the recklessness of the American motor industry? For years now it has been warned to steer clear of its guzzling monsters on the road, readying American users for a changing market. The underlying message here was: get efficient or perish. In 1979, it was noted that the gas crisis had precipitated a dramatic plunge in sales for companies specializing in the making of large recreational vehicles, vans and the like. Evidently, no one on the boards of these giant auto corporations was listening.

Rather than assessing a changing global market, the industry kept quiet about a certain little problem called climate change and the continuing dangers posed by rising gas prices and sudden oil shocks. (Going green was simply a silly little European fad.) In fact, it funded campaigns insisting that gargantuan size was an American right, the sacred entitlement of the motorist. New emissions standards were akin to fascist intrusions on state liberties. Patriotic automakers were simply giving American drivers what they wanted. Fuel efficiency was positively un-American.

The result? Sales have now plummeted to a 17-year low. General Motor’s shares plunged to their lowest levels in 62 years last week. Its board has suggested that it won’t be able to last out the year without financial assistance. The entire industry craves a financial rescue package worth something like $US25 billion, and car makers are complaining that stringent measures attached to any monetary rescue package will be unworkable.

The industry is now getting its comeuppance, and is desperately floundering. While not rescuing these hulking monsters may well prove disastrous for US employment, their demise is richly deserved by those who saw the cliff and went straight for the edge. Perhaps engineering whiz John DeLorean was right when he said in 1979 that the failures of a company such as GM “to compete with the foreign manufacturers is more due to management failure than anything else.” It would be silly to reward them for their errors.

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, University of Cambridge.

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