It was October of 1973 when OPEC imposed an oil embargo resulting in lines to buy gas in the U.S. 1973 was what we in the education racket call a "teachable moment". The American consumer learned overnight that the supply of gasoline was finite, that America depended too heavily on foreign oil, and that the price of fuel was volatile. Unfortunately, American auto makers have done all they could over the last thirty five years to erase the blackboard.
It seems incredible now, but regular gas in the early 70's sold for around $.36 a gallon. Once it hit $.50, consumers discovered fuel efficient Toyotas, Hondas, and Datsuns (now Nissan). And once we got these babies home, we also found that they were durable, lasting well over 100,000 miles. American car culture back then had us believing only paupers and eccentrics drove cars for that long.
The bankruptcies of Chrysler and GM follow thirty five years of corporate footdragging. These companies, so resistant to change, must now chart entirely new courses. But it is most unclear as to who will instruct the executives: the market or the federal government? If the former, what will the consumer accept from companies that have never produced a safe, fuel efficient, and durable vehicle before? If the latter, what's to prevent these companies from abandoning the quest to be competitive in favor of simply lobbying for more handouts from Washington?
The president has said that the federal government will not interfere with day to day operations. But if the fed is not to teach Detroit the car business, who will?
1948 Cadillac dashboard
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