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The Detroit Bailout

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2008 L.A. Auto Show: Was it the Kick off for the Big Three's Farewell Tour?

November 24th 2008

Economy - Big Three at Congress
GM's Wagoner, Chrysler's Nardelli, & Ford's Mullaly

Los Angeles, San Francisco, Detroit, Chicago, Philadelphia, New York…

That sounds like the city stops along a rock band’s national tour—and it could be.

But in this case these are major cities that make up part of the 2009 model-year auto show exposition tour that car companies will follow to display their products to the American public. For the Big Three—General Motors, Ford, and Chrysler, it could be their farewell tour.

While nearly everyone hopes this won’t be the situation, it doesn’t look particularly promising judging from what the U.S. carmakers unveiled—or more pointedly, didn’t unveil—last week at the Los Angeles Auto Show. 

Last Tuesday night, Ford debuted its latest muscle car, the 2010 Mustang. Yes, the Mustang has always been an American favorite, and the unveiling is obviously intended to blunt Chevrolet’s intended 2010 re-launch of Mustang’s longtime competitor, Camaro. But is this the right time to be talking about gasoline-guzzling muscle cars… regardless of how relatively fuel-efficient the new Mustang may be.

By comparison, that same evening, BMW unveiled its electric MINI E concept, a seemingly smarter move for these times. Even in its gasoline-engine version, the popular MINI could be said to be an energy efficient home run; with an electric propulsion system it would be a grand slam: a desirable car with near-zero harmful emissions.

On Wednesday, the first day of the LA Auto Show’s two press-introduction days, when journalists would normally expect to see major presentations by General Motors, Ford and Chrysler, GM and Chrysler were truant. Ford staged a modest duo event in which they presented a 2010 Lincoln MKZ and 2010 Ford Fusion; two vehicles that will probably have, at best, lukewarm acceptance by American consumers. Keep in mind that in past years the Big Three would not just have one overall brand presentation each, they would usually have individual presentations for their respective specific makes, i.e., Chevrolet, Cadillac, Buick, Saturn, Saab, Ford, Mercury, Volvo, Chrysler, Jeep, and so on. Not having any unveilings by two of the Big Three at North America’s second most important car show (in the number one regional car market) spoke volumes.

Yes, it is true that the heads of the Big Three were quite busy on Capitol Hill at about the same time as the press-intro days. And certainly any extravagant presentation in Los Angeles would have been criticized as wildly inappropriate and too reminiscent of the infamous AIG spa and Jacuzzi weekend, especially given the hat in hand reason GM’s Richard Wagoner, Alan Mulally and Robert Nardelli were before a Congressional Sub-committee. The trio has been mockingly called the Three Beggars by some in media.

But instead of just playing ‘poor us,’ it might have been a grand opportunity to display the responsible action that America (and some in Congress) has been anxiously waiting for: seizing back the initiative from foreign automakers to deliver products that we need and want in a timely and meaningful way and work towards the elimination of the need for gasoline.

Just one month ago, General Motors did stage multiple extravagant product unveilings at the Paris Motor Show. Surely they knew of their dire financial situation at that time. One item that was presented by GM in Paris that could have been talked about in Los Angeles was natural gas-powered vehicles: an environmentally friendly, less expensive solution that is being offered in other parts of the world. Unfortunately GM, along with Ford and Chrysler continue to deny this proven alternative to America. 

Meanwhile, although the non-U.S. car companies all spoke of the past year’s poor financial results and the bleak outlook for the near-term future, they carried on with business-as-usual product premieres and high-tech alternative-fuel innovations. And at the end of the two days, other than a general nostalgic sadness or valid concern for the domino effect that could devastate the American work force and its army of mom-and-pop suppliers, this journalist did not speak to one colleague that didn’t express the opinion that the auto industry generally and the consumer specifically could not thrive without the Big Three.

Was the fanfare of the Los Angeles show—or lack of it—the first of several threnodies for Detroit?

Marc J. Rauch is co-publisher of the Auto Channel and can be found at www.autochannel.com.

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