For car buyers seeking an environmentally correct solution, hybrid models, especially those made by Japanese and Koran manufacturers, have offered a nice alternative.
Governments understand this. Ken Livingstone, mayor of London, embraced hybrid cars by inviting them into the city free of congestion charge. Arnold Schwarzenegger, California’s governor has promised to offer “green cars” good mileage ratings carte blanche in the state's car-pool lanes, even with only one passenger.
Everything went smoothly until last Thursday, when the Associated Press reported the U.S. Department of Health and Human Services apologized to the country's auto industry for recommending fuel efficient cars to its 67,000 employees in a newsletter.
The reason: the 12 models DHHS advised its staff to buy were either Japanese or Korean brands.
The embattled Big Three in Detroit should feel a bit relieved. While the apology could do little to prevent 100,000 UAW members from taking to the street, it has at least demonstrated the influence U.S. auto makers still have on politics, especially following their recent failure to block the passage of tighter fuel economy bills in the Senate.
It might be fair to say that the DHHS fails to recognize the progress the Big Three have made in rolling out more fuel efficient models. Ford sells a hybrid version of its Escape SUV. General Motor has pledged to launch this year its plug-in hybrid that goes twice the distance of Prius, the best-selling Toyota brand that received a high score from DHHS.
The criticism Detroit car makers have raised, however, also involves rejections of clean energy driven vehicles and foreign brands in general. The Financial Times quoted Jason Vines, Chrysler spokesman, as saying that “fuel economy is not the only defining factor. There are things like safety and utility and so forth.”
On foreign car companies, Mr. Vine said: “I don’t think you’d ever see anything like this out of the Japanese government, that you should maybe consider a Chrysler 300C.”
These remarks reflect a sense of self-righteousness that could hinder the recovery of U.S. auto sector. Demand for cleaner cars will only keep rising as people come to understand the impact of gasoline emission on global warming. Meanwhile, green-minded drivers are starting to substitute hybrid models for energy intensive SUVs. Safety and utility, though still important, are gradually losing status, as the maturity of technology has allowed most companies to do equally well in this regard.
Mr. Vine’s request for government protection of domestic auto industry also lacks ground. The emergence of the U.S. as the world’s most advanced economy relies on a free market where domestic and foreign businesses can compete on an equal footing. Efforts to make policies that discriminates foreign players will only discourage local manufacturers from innovation, as their current technology can already guarantee a good chunk of profit without the presence of more advanced foreign products.
Detroit auto makers are excellent players of political hard ball. They have managed to organize Michigan’s 15 congressmen to protest to Mike Leavitt, the Health and Human Services Secretary, who had later “deeply regretted that our newsletter offended anyone”. But if the Big Three could apply a portion of such wisdom to beefing up management and innovation, they would probably enjoy a great leap forward in financial performance.