Dinosaurs and Meteors The US Car Industry Fall and Foreign Car Conquest
Introduction The automobile industry began as little more than a small experiment. An “official” start date can be traced back to the Chicago Times‐Herald Thanksgiving Day race of 1895(1). Charles and J. Frank Duryea won the race on a wintery weather day, when just two cars crossed the finish line. Yet this race changed the course of history. Within a decade, numerous inventors and mechanics tried their luck at building automobiles such as Buick, Oldsmobile, and Ford. Many attempted but only the mighty three survived the automobile race Ford, GM, and Chrysler. For over half a century these companies dominated the global automobile market. Yet in the mist of pride, the communicated goals have gone astray. This allowed the foreign automobile competitors to completely transform the U.S. automobile market.
U.S. Automobile Industry Fall
In the early 1970s, war began in the Middle East. When the United States showed alliance, Arab oil exporting nations placed embargos on these nations. The Arab nations decrease production. In response to this decreased supply, OPEC raised crude oil prices from $3 a barrel to $12 a barrel (2). The reason for these large price increases was due not only to reduced supply, but to the United States energy policies that allotted price restraints on domestically oil. The price control caused a 50% price increase for imported oil. The policy kept oil prices for U.S. consumers below world market prices. While this was beneficial in the short run, it had disastrous consequences eventually doubling oil prices. If the United States had not had price controls, they would have faced higher oil prices, as a result, oil consumption would have eventually declined. This would have lessened the dependence on foreign oil and the impact of price. In actuality, because price controls allowed consumers to continue buying gasoline at normal prices consumers did little to decrease their demand for oil (3). U.S. automobile companies did not industry did not take heed to the oil dilemma. They continued to produce large gas‐consuming vehicles for years. Top foreign competitors like Toyota, Honda, and Nissan made steps to produce vehicles in an alternative niche market, compact energy efficient automobiles throughout the late 1980s and 1990s. Many Americans embraced these companies. They became popular for their efficiency, engine quality, design, and mileage.
Alternatives
Electric Electric car have been around since the beginning of cars. At one period electric cars were selling faster than steam and gas engine automoblies in the early twentieth century. However in the race to mass‐produce it has never made the cut. A small selection of all‐electric cars in the late 1990s from the popular automakers — including Honda’s EV Plus, GM’s EV1 and S‐10 electric pickup, a Ford Ranger pickup, and Toyota’s RAV4 EV — were introduced in California(4). Despite the enthusiasm of early adopters, the electrics failed to reach beyond a few hundred drivers for each model. Within a few years, the all‐electric programs were dropped.
Hybrid Hybrids work from two energy sources. The first is a propulsion system that runs with rechargeable energy storage and the second is electric which requires the battery to be charged occasionally. Toyota Motor Corporation announced the "Earth Charter," a document outlining goals to develop and market vehicles with the lowest emissions possible in the early 1990s. The Clinton Administration announced a government initiative called the Partnership for a New Generation of Vehicles (PNGV). In the program, the government worked with the American auto industry to develop a clean car that could operate at up to 80 miles per gallon. Several years and a billion dollars later, the PNGV emerged with three prototypes for their 80 mpg car. Every prototype was a hybrid. Toyota's exclusion from PNGV prompted Chairman Eiji Toyoda to create a secret project called G21, Global Car for the 21st Century (5). The following year, Toyota doubled its original goal of improving fuel efficiency. Honda released the two‐door Insight, the first hybrid car to hit the mass market in the United States. The Insight won numerous awards and received EPA mileage ratings of 61‐MPG city and 70 MPG highway. In 2000,Toyota released the Toyota Prius, the first hybrid four‐ door sedan available in the United States. The Toyota Prius II won 2004 Car of the Year Awards from Motor Trend Magazine and the North American Auto Show. Toyota was surprised by the demand and pumped up its
production from 36,000 to 47,000 for the U.S. market (6). Interested buyers waited up to six months to purchase the 2004 Prius. Toyota Motor Sales U.S.A. President Jim Press called it "the hottest car we've ever had." In September 2008, Ford released the Escape Hybrid, the first American hybrid and the first SUV hybrid (5).
Fuel Options
Hydrogen Hydrogen‐fuelled cars are said to be the car of the future. They are powered by fuel cells‐‐electrochemical devices that combine stored hydrogen with atmospheric oxygen to generate electricity and water vapor (6). This means the car produces no CO2 emissions directly. But whether it is emission‐free overall depends on the source of the energy used to produce the hydrogen. The hydrogen is more of a temporary store of energy from other sources than a fuel.
But the promise of hydrogen‐powered personal transport seems as elusive as ever. The non‐emergence of hydrogen cars over the past decade is particularly notable since hydrogen power has been a darling of governments worldwide, which have spent billions of dollars in subsidies and incentives to make hydrogen cars a reality (6).
Ethanol Ethanol is a type of grain alcohol, its very economic to create because it involves the fermenting starch or sugar crops. As a fuel, its energy is dense and less than 2/3 of gasoline and the ethanol tank must be 1 ½ the volume of a regular gas tank (7). The exchange from gasoline to ethanol has been subject to negative review because it requires using crops for the production of motor fuel. The U.S. Office of Technological Assessment has estimated that grain and corn to mass‐produce the fuel would make the nation’s food bill increase by billions (7). Development for biomass ethanol could become more economically sound through more intensive research in the future. Environmental Impacts of agricultural Ethanol (alternative cars: US Office of Technological Assessment 1980) •
Water: Water Use (irrigation only) that can conflict with other uses and cause ground water mining o Leaching of salts and nutrients into the surface and ground waters, which can cause pollution of drinking water supplies for animals and humans, excessive algae growth in streams and ponds, damage to aquatic habitats, and odors.
o Flow of sediments into surface waters, causing increased turbidly, obstruction of streams, filling of reservoirs, increase flood potential o Flow of pestisides into surface waters, potential build‐ up in food chain causing both aquatic and terrestrial effects such as thinning of birds’ eggshells.
o Thermal pollution of stream caused by land clearing on stream banks, loss of shade, and thus greater solar heating. •
Air: Dust from decreased cover on land, operation/ heavy exhaust of heavy farm machinery. o Pesticides from aerial spraying o Changed pollen count, human health effects
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Land: Erosion and loss of topsoil, decreased cover, and plowing, increased water flow because of lower retention: degradation of productivity. o Displacement of alternative land uses such as wilderness, wildlife, aesthetics, etc. o Change in water retention capabilities of land o Potential damage to soil microbial populations o Increased soil salinity o Depletion of nutrients and organic matter
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Other: Promotion of plant diseases by monoculture cropping practices
Occupational health and safety problems associated with pesticide residues and involvement in spraying operations (5)
Methanol Methanol can be produced through coal or wood by abundant natural gas. To obtain these materials they must need to rely on the same countries that produce gasoline to obtain natural gas. It’s similar to ethanol gas however it is also very expensive to manufactories for mass product use. Research has proven it would be difficult to start vehicles under cold weather conditions with this type of gas. It also would produce more gas emissions into the earth’s atmosphere (8).
Saving the US Industry They Failed The U.S. car industry became lost in high sales percentages. They were infatuated by the fact that the larger they made the cars the more they sold. They sold army model trucks called Hummers to consumers. They produced cars that were not innovative in technology or energy. By the time the war in Iraq had become mature gas prices had jumped to $4.00 and as high as $7.00 in certain areas of the United States. Consumers were also moving toward the “Go Green” trend. Consumers were more concerned about saving natural resources and reuse of materials. The economy also moved into a recession causing consumers to seek compact and even more efficient vehicles.
Government
Initially, the government often sets up policies to protect the industry, but eventually the industry must face global competition. This past year the U.S. auto industry has sunken into the economy’s recession. GM and Chrysler have received a $17.4 billion government bailout in December. Ford Motor is also struggling but opted against seeking rescue funds. The Obama administration will make about $500 million available to Chrysler through the end of April 2009 as it seeks to reach an alliance with Fiat, and up to $5 billion through May to help General Motors restructure outside of bankruptcy, an independent oversight report (9).
Conclusion
The U.S. car industry has had many opportunities to seek innovative fuel technology. They have been hit with two large oil crises and chose to continue their large dinosaur mentality (sales over of practical alternative fuel options). While they refused to change their ways foreign car industry companies such as Toyota, Honda, and Nissan have filled the void that American consumers have needed. They completely hit the dinosaurs off course like the meteor in theory. If the United States car industry wants to resurface as leaders they must may attention to trends, technology, and consumer needs not just sales numbers.
References
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Pictorial Timeline of Automobiles, Mary Bells, 2009 http://inventors.about.com.od/astartinventions/ss/Auto_Timeline.htm What Was The First Car? A Quick History of the Automobile for Young People, William W. Bottorff, pg.1 Trust and power: consumers, the modern corporation, and the making of the United States automobile market / Sally H. Clarke. Cambridge; New York: Cambridge University Press, 2007. Electric vehicles: socio‐economic prospects and technological challenges. Robin Cowan, Staffan Hultén. Aldershot; Burlington, VT: Ashgate, 2000. History of Hybrid Vehicles, 2006http://www.hybridcars.com/history/history‐of‐hybrid‐ vehicles.html Alternative cars in the 21st century: a new personal transportation paradigm / Robert Q. Riley. Warrendale, Pa., U.S.A.: Society of Automotive Engineers, c1994. Oil in the 21st century: issues, challenges and opportunities, Robert Mabro, Oxford; New York: Published by the Oxford University Press for the Organization of the Petroleum Exporting Countries, 2006. The Japanese automobile industry: a business history / Koichi Shimokawa. London; Atlantic Highlands, NJ: Athlone Press, 1994. Chrysler, GM to Get More Government Aid http://www.foxbusiness.com/story/markets/industries/transportation/chrysler‐gm‐ government‐aid/