Back in the 70's former TTAC columnist Brock Yates coined the term Grosse Point Myopia: the tendency of Detroit's execs to use each other for their frame of reference. [Our own Andrew Dederer revisited GPM in October 2006.] And now Ford's Presidente de las Americas, Mark Fields, evokes the concept with his insistence that doing better than before is as good as doing well. Or being prepared. But you'd expect these sort of revisionist weasel words in an article by The Detroit News on the D2.8's troubles the day before the June sales numbers drop (as in off a cliff). Did you know that after last May's numbers, Ford and GM "executives were alarmed?" Yes, "eventually [eventually?] they made almost desperate decisions that will cost thousands of jobs, change the vehicles people drive and determine whether their businesses survive." And check this: Mike DiGiovanni, GM's executive director of global market and industry analysis, told scribe Tom Krishner "oil prices in February began to rise, still not to an alarming level because they were consistent with previous seasonal spikes. Gasoline was still at a nationwide average of $3.03 per gallon. In March, though, pickups' share of the market dove to just 11.6 percent and gas rose to $3.24. 'That's when I said 'Red Alert,' Digiovanni remembered. 'We're worried.'" To which Krishner adds "Even critics say it would have been nearly impossible for the automakers to predict the 74-cent-per-gallon spike in regular gas prices between February and May." This is going to be one Hell of a wake-up call. Or, even more worryingly, not.
Find Reviews by Make:
Read all comments
“We are reacting quickly. We are reacting more quickly than we ever had in the past” Mark Fields. That’s like a guy weighing 160kg, losing 40kg and saying “Hey, look! I weigh 120kg now!”. Well, yeah, you’ve lost weight, but your still clinically obese! Well, it’s nice to see that Detroit execs are waking up to the fact that the companies which they are SUPPOSED to be running on behalf the shareholders are in deep trouble. It makes me wonder how insular Detroit’s execs are. But, then again, if you were being paid more than the top 6 execs of your (far more successful) competitor, get free cars, have a bankruptcy proof pension and have access to the company jet whilst simultaneously, asking the rank and file to “make sacrifices for the good of the company”, then such virtues like having pride in your work seem to go by the wayside. Also, as of writing, oil is reaching $144 per barrel. So expect that information to reach Detroit’s best and brightest by June 2010. “But you’d expect these sort of revisionist weasel words in an article by The Detroit News on the D2.8’s troubles the day before the June sales numbers drop (as in off a cliff)” Couldn’t have put it better myself.
Anticipating the unprecedented run-up in gasoline prices was impossible, but consistently producing a full line of quality products and good customer care was not. Toyota’s large SUV and truck sales have also fallen off a cliff, but the Yaris, Corolla, Camry and other good cars are setting sales records.
Gas just went up 22 cents per gallon in northwestern Michigan. Again. Still. I just paid $4.25 a gallon for regular unleaded. I’m thinking diesel is near $5 but didn’t look closely.
OPEC says “$170 per barrel is likely”. Imminently, I presume, since oil just went to $143, up a dollar or more per day over the weekend.
Glad I have my Prius and that my wife and I drive together 90% of the time for work (and combine trips), but it’s starting to hurt us quite a bit and we’ve had to move our budget for fuel from $100 every two weeks to $140 over the past 6 months, and I’m presuming, we’ll have to move it even more soon. I can only imagine the hurt most folks feel with Stupendously Ugly Vehicles.
Don’t be surprised to see me start with pulse & glide and easy electric-only driving in town when possible. Also long slow downs to red lights. Yeah, I watch ahead a lot. You’ll just have to deal with it, those of you behind me, ‘coz in reality, you’re going to be wanting to start trying whatever it takes to make 14 mpg with your Stupid Utility Vehicle instead of 12 mpg.
Try slipping it into neutral when you coast down to stop lights, pump your tires to maximum recommended cold tire pressure, get all the “stuff” out of your trunk/wayback that you don’t need with you, remove the tow ball even, even consider taking the spare tire out, putting it in your garage and get a inflata-cannister (make sure you also have good emergency roadside assistance).
Accelerate gently (pretend the gas pedal has an egg under it and you don’t want to break it ‘coz you’ll have to clean it up!), try to let your engine shift at 2000 rpm/keep RPM below that if possible, keep your speed down, yeah I know it’s a real novel idea to actually follow the speed limit, but….
And look ahead, anticipate. Don’t tailgate. You’re constantly having to adjust speed when you do. Leave at least 3 to 5 seconds between you and the car in front of you (time it from when they pass a stationary roadside point then when you pass same). Pretty soon, you’ll be a better driver, as well as up your MPG.
If you’re really serious about trying for 15 mpg, you can try “lock throttle driving” where you build up to your speed, get on the flat & level, then lock your foot against the transmission hump carpet and let the vehicle slow slightly on upgrades. You’ll start to get good at it. I do this when possible even on rolling hills in my area, and watching the MPG meter in the Prius stay above 50 mpg while progressing between 52 and 58 mph is gratifying. You’ll learn to ease the gas down a tad to speed up before grades, lock foot, ease off on downgrades (gently moving the foot). Cruise control tosses the throttle up & down constantly – not good for MPG.
Oh yes, I almost forgot. Can I ask that any and all SUV and pickup truck drivers who bought these things NOT whine about it? YOU took the decision to have a show-off-mobile and so now YOU pay at the pump. YOU could have used good stewardship and chose to buy something which could take care of 99% of your needs instead of 110% of your “wants”, but nooooo…. so give the rest of us a break and stop whining.
It’s not like 1973 (fuel crisis), 1979 (fuel crisis II), 1990, and Katrina gasoline/diesel price spikes never happened. They did.
Likewise, Detroit Inc. Shut up and get to work instead of continuing with the wailing and gnashing of teeth, already.
Katie’s right. I quote from Bloomberg:
“Brent crude oil for August settlement rose as much as $3.60, or 2.6 percent, to $143.91 a barrel on London’s ICE Futures Europe exchange, the highest since trading began in 1988. It was at $142.06 a barrel at 12:26 p.m. London time.”
No one could anticipate a run-up of oil prices? Although I’m certainly unqualified as an “analyst”, it seems that the 1970’s brought two spikes in oil prices based upon instability in the Middle East. Both spikes were followed by a drop in demand for non-fuel-efficient vehicles.
The invasion of Iraq in 2003 might have been a clue, although perhaps the “analysts” were convinced that “Mission Accomplished” in May of that year meant that the scare was over…
Then again, the falling value of the dollar over the past six years might have also been a clue to the volatility of oil and other commodity prices.
Who could imagine that the American consumer would be so fickle?
I try to explain to people that using the brake is exactly the same as using the throttle: having to brake (like for a light) is simply a means of dispelling the momentum you bought by using the gas earlier. Whatever fuel you used to achieve the speed you’re now having to scrub off you might as well just have poured on the ground.
menno: OPEC says “$170 per barrel is likely”.
OPEC’s position is that there is no supply problem (and the evidence is with them: after a year of this, there is still no physical shortage on the horizon, but for idiotic threats from Israel and the USA against Iran). The latest ‘prediction’ of $170 was from the president of the cartel, and was based on possible ECB interest rate moves, and its effect on currency exchange — already factoring in the dynamics of the bubble:
http://arxiv.org/PS_cache/arxiv/pdf/0806/0806.1170v2.pdf
Said OPEC president also speculated that the price would rise to 200, 300 or even 400 bucks when the US and/or Israel attacks Iran.
The money a CEO makes implies that he has more on the ball than the average line worker. None of the Detroit CEOs has demonstrated any exceptional abilities. Hey, stockholders, I’ll run your company into the ground for a mere 100k per annum. Look at the money you’ll save.
You really have to wonder about Mark Fields. I’m sure he’s reasonably quick, but he’s also disturbingly old-school Detroit in much of what he says. A little too much bluster and gong-banging, not nearly enough “Yeah, we f_cked up, here’s what we’re doing to fix it.”
Why does this all feel like 1979 all over again? Mr. Wizard, i don’t want to bend over at the gas pump anymore…….
Let’s play CFO for a sec. folks. Much of the spike in oil prices is because the Fed has decided to allow the dollar to remain in a free fall. Sooo, the easiest way to get oil prices down in America is to make the dollar get stronger vs. the Euro. A drop in oil prices might move some of that merchandise languishing on your lots. But, the way to get the dollar up is to strangle the money supply and thus raise interest rates. Your company has a B- credit rating. In a tight interest rate market, how much are you going to have to pay to borrow money to keep your doors open? They are so f***** they don’t know where to go and what to do.
“Even critics say it would have been nearly impossible for the automakers to predict the 74-cent-per-gallon spike in regular gas prices between February and May.”
74 cents per gallon?! Try living in California.
I’ll agree that the long term sustained run up in gas prices over the past 4 years would have been hard to predict, but what have they done over that four year period? They all get paid big bucks to react quickly, decisively, and correctly. Have any of them shown that capacity? I think that we all saw that the price of gas was going to rise significantly over 3 years ago, which is enough time to develop high mileage compacts that are in demand now and steer away from large SUVs and trucks, which have completely tanked. So, where are all of these import fighting compacts that entered the design phase at GM, Ford, and Chrysler back in 2004 when their CEOs reacted correctly and decisively to the increases in gas prices?
CliffG: Much of the spike in oil prices is because the Fed has decided to allow the dollar to remain in a free fall.
Although the symptom might be that the Fed “decided to allow the dollar to remain in free fall”, the actual disease is more likely related to our nation spending an amount significantly greater than our income. The dollar was quite strong in 2000 when our spending-to-income ratio was more favorable.
This is the guy Ford pays a premium for and flys back and forth from his Florida retreat?
OMG.
I have watched all kinds of auto fads come and go: big wheels, small wheels, rounded bodies, wedge bodies, square bodies, hatch backs, two tone paint jobs, chrome everywhere, wrap around windshields, etc.
Even before the run up from $2 to $4 a gallon the SUV and PU fads were quieting down. After backing over a few of their kids and getting tired trying to park these things people were moving away from these fads.
Any exec not prepared for these fads running their course shouldn’t be in the auto business.
And to think it’s only been ten years. Take a look at the top vehicle on this page:
http://auto.howstuffworks.com/1990-1999-ford-trucks9.htm
psarhjinian :
June 30th, 2008 at 12:17 pm
You really have to wonder about Mark Fields. I’m sure he’s reasonably quick, but he’s also disturbingly old-school Detroit in much of what he says. A little too much bluster and gong-banging, not nearly enough “Yeah, we f_cked up, here’s what we’re doing to fix it.”
Channeling Curley Howard ” I’mmm a victim of soy-cum-stance”