the
innovative LEDGER
An e-Newsletter from The Innovative Edge™ Inc.
Vol.
7, No. 7 - July 2007
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Driven to Say NO
By Jeff Govendo
Last
month the Senate passed an energy bill requiring auto manufacturers
to adopt a new C.A.F.E. (Corporate Average Fuel Economy) standard
of 35 mpg for their fleets by 2020. In a departure from the last
new standard set back in the mid-1970's, this one will also include
light trucks and SUV's, which account for over one-half of domestic
auto sales. (These were previously not considered in the averaging,
which is why even small trucks get abysmal mileage).
The
new standard, while rather modest in view of increasingly dire predictions
about global warming, marks a significant achievement. When fully
enacted, it will result in tens of millions of barrels of oil saved
every year, in addition to lowered carbon emissions which are the
main culprit in the earth's rising temperature.
How
did the Big Three car companies deal with all of this? Not surprisingly,
they said NO. They fought it every step of the way. Just as they fought
seat belts in the 60's. Catalytic converters in the 70's. Air bags
in the 80's. And the first round of C.A.F.E. standards. No to every
promising new technology for increasing safety or lowering emissions.
All
this, while foreign competitors took on these and other challenges,
forcing themselves to invent, to innovate, to become leaders in new
technologies. The Big Three are no longer the biggest, and two
of them face real threats to their very survival. They claim it is
so-called legacy costs holding them back: pensions and healthcare
benefits for thousands of retired auto workers, adding as much as
$2000 to the cost of every car they produce.
While
these costs may be real, they are nothing that couldn't be resolved
if the companies were selling products the public really wanted. And
right now, people want cars that help them deal with gas at $3 a gallon.
They want to do their part in saving the planet. They want to do
business with manufacturers that say yes to innovations that really
matter.
We
live in a society in which there is a natural aversion by business
to being regulated by the government. Indeed, much of our unparalleled
economic success over the years is due to that separation; letting
the market – and not our elected officials – call the shots.
So the almost knee-jerk negative response to imposed standards is
perhaps understandable.
But
tough new standards also pose opportunities for these companies to
return to the inventiveness that made them the envy of the automotive
world a generation ago. Instead of paying their lawyers and lobbyists
millions to say NO for them in Washington, what if they spent that
money on their own R&D in Detroit, creating a resounding YES that
would give consumers what they’re looking for? Maybe even more.
And actually be the first to do it, instead of being the reluctant,
grumbling followers they’ve become over the past quarter century?
Many
of us who follow the automotive industry in this country have concluded
that our venerable Big Three do not have many more chances to get
things right. Global competition is just too fierce to keep doing
things the same way. Some long-term vision and imagination is sorely
needed – right now.
Perhaps
that means saying “no” to the word NO.
