DETROIT – Every January thousands of journalists descend on Detroit to cover the latest news from automakers hoping to garner the public’s attention in an ever increasingly competitive car market. The warm glow from the glistening stands of the 90 exhibitors attracts the 6,000 plus writers who happily trudge from booth to booth across the 700,000 feet of floor space. Sipping a free cappuccino or glass of champagne beats braving the cold wind from the Detroit river as the herd of scribes, from as far away as Uganda, Bosnia, Dubai, Argentina, China, Japan and all parts of Europe, dutifully flits from display to display in search of news.
This massive media outpouring is here to see the largest number of worldwide product introductions by the world’s largest automotive manufacturers. The thousands of stories written, broadcast and increasingly posted on the internet insures that the manufacturers come back year after year. Themes emerge every year and it appears that as gasoline prices have soared and the impact of Al Gore’s “Incovenient Truth” has sunk in, the world’s automakers are embracing “Green” while still trying to eke out a profit with new full-size trucks, V-12 powered concept cars and gas-silly luxury sports cars that take a “let them eat cake,” approach to social responsibility.
The writing may be on the wall that the planet’s warming, the ice caps are melting and the penguins, let alone all human beings, could be at risk but not one of the automakers was heard to suggest that fewer cars should be built. There was no hue and cry for mass transit, or sensible land use planning, ride sharing or any alternative beyond tweaking the power plants on an ever-increasing number of autos that a global auto industry is planning to build. The pedal is still pressed to the metal in North America and Western Europe but also in more and more countries such as Brazil, Russia, India and China where leaders see the development of an auto industry and a consumer society that embraces the auto as a major part of their manifest destiny. This is good news for companies that are global competitors and who have the scale to provide cars and trucks to meet this growing demand.
This year marks the centennial of General Motors and the likely handing off of its sales leadership crown to Toyota. While Toyota celebrates this achievement the Chinese presence at the auto show from manufacturers such as Geely shows that there are aggressive new competitors in the wings from emerging markets that will keep all the car companies from resting on their laurels. GM isn’t giving up and appears to finally have found its footing and learned how to tap into its international product portfolio to build cars that will appeal to customers in Europe, Asia, Russia, Australia and North America. The new Saturn, Opel and Chevrolet Malibu all share a common platform and have garnered good reviews in their respective territories. This is the kind of thing that made Toyota a global sales leader and earned the company buckets of foreign currency from export sales and factories it built overseas. While GM begins to make its global automotive assets work together it’s also working on removing what it’s said has been a cost disadvantage in its North American market. The new labor agreement it negotiated last year with its main union, The United Autoworkers (UAW), should give GM a level playing field as its aging workforce is replaced with younger, lower paid workers. The lower wages, combined with the elimination of health care and pension obligations for retirees can potentially mean billions of dollars will pad the bottom line – even if the company sells fewer vehicles. Now, if GM can realize its product plans, it may even grow.
Ford is also working through its own transition. After six of years of being addicted to SUV and truck sales, Ford is fighting to take advantage of its global presence. A shapely new small car, the Verve, with a fuel efficient direct injection gasoline engine (GDI), was an indication that Ford is gearing up to compete. But its new F-150, full size pickup, a line that accounts for 26% of the company’s sales, shows how hard it will be to embrace change. A glaring absence from the show floor was the Indian manufacturer, Tata. Its announcement that it would build the $2500 Nano, the Indian people’s car, in order to put its bicycle riding, scooter driving nation on wheels made it clear that there are still virgin territories for the automakers to explore. Even if oil is diminishing the international automakers are going to find a way to satisfy this growing hunger for cars. GM announced its signed a deal with a company that will be able to make one-dollar a gallon fuel out of used tires, grasses and other things while China’s largest manufacturer of batteries for cell phones signaled that it had the capacity to put a jolt into the quest for electric cars. Fisker, an exclusive luxury car maker, is using the money from a maker of solar panels and parts for GM trucks, to build one-off hybrid sports cars. Even Ferrari was touting a bio fuel option.
The car business may be a roller coaster ride but it’s not going away. As the American Presidential campaigners embrace change it’s also entered the zeitgeist of the auto companies. No one knows for sure which companies will thrive, whether hybrids, fuel cells, hydrogen, diesel or gasoline will prevail or how the emerging economies embrace of the auto will affect their societies. The only thing that promises to remain the same is the annual ritual of thousands of journalists making the haj to Detroit in the dead of winter to write about the trials and tribulations of a fascinating industry. Love them or hate them, it’s hard to ignore a shiny, swoopy new automobile.
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