- $20 per Gallon
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- STRANGLED IN THE CRADLE?
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- STATE OF THE INDUSTRY - PART II
- The Heartland Institute's Environmental Journal
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- The Future of Aviation
Week of November 23
Submitted by Dan Sweeney on Tue, 2008-12-02 23:37.
Of late the plight of the alternative fuels industry has been completely overshadowed by the larger crisis afflicting the auto industry, particularly the American auto industry whose very survival is at stake at this juncture. Not since its earliest beginnings has the American automotive business faced such a threat, not even in the Great Depression. It is now entirely possible if perhaps not altogether likely that a large segment of the industry will simply disappear and that its atrophy will mirror earlier near extinctions involving once great American industrial sectors such as steel production, ship building, machine tools, and consumer electronics.
We have seen such disruptions before. The American automobile industry suffered an enormous loss of market share in the early nineteen seventies at the same time when the major steel companies were going out of business and American television and consumer audio equipment manufacturers were succumbing as well. Interestingly, in both cases, these mass extinctions occurred during a period when the economy was otherwise troubled. The collapse or atrophy of these industries further troubled the sour economy of the seventies and culminated in a terrible period of extremely high unemployment and high inflation at the beginning of the decade of the eighties.
This period promises to be worse and possibly much worse because the auto industry is iconic in a way that steel and electronics weren't and the blow to the nation's psyche will be much more severe. And even if the auto companies survive they are not apt to restore themselves to their former vigor. The loss of market share which they suffered thirty-five years ago was permanent, and the losses they will incur in the months and years to follow will endure as well. They will be diminished in every respect, in sales, in economic importance, in revenues, and, most of all, in stature.
What follows is not so much a commentary as a framework for thinking about the issues at the core of the current crisis. There are no nostrums or smug injunctions as to how these firms should reform themselves or suggestions as to how they went astray. It is quite useless to second guess the strategies of industrial leaders. No one knows how different decisions might have resulted in different outcomes. In any case, there is always a large degree of determinism in what appear to be free decisions. Executives make free decisions at the birth of a business. They can only make constrained decisions in its twilight.
A Prior Rebirth
As a matter of fact, none of the major auto manufacturers anywhere in the world are doing well at present, but the American big two and half are in particularly desperate circumstances. None is in greater danger than General Motors, the biggest manufacturer of cars and trucks on the planet as recently as last year when it was finally eclipsed by Toyota.
As they confront their uncertain and dangerous present, they can draw little comfort from the past. The successes of the past, and they were enormous successes, were born of the larger overwhelming success that was the mid-century American economy. That success cannot be replicated. There are lessons to be drawn from it, however, if not the obvious lessons.
Historians of innovation have quite frequently observed how companies fail because they succeed. They settle upon products and formulas that are very successful for protracted periods of time and the companies are subsequently unable to deal with sudden changes in markets. Corporate leaders who have built careers on serving established markets are especially unwilling to change. As one management consultant put it, "bottlenecks are always at the top of the bottle".
But in the glory years of the American auto industry from 1946 until the late sixties, not quite a quarter of a century, the big three completely remade themselves from what they had been in the twenties and thirties. They did the unthinkable and they succeeded.
First of all, they became companies dominated by artists. The great Raymond Loewy was as important to the auto industry of mid-century as Henry Ford was to the industry in its infancy. Beginning with the epochal Studebaker redesign of 1947 and culminating in the Studebaker Avanti of 1963 (Loewy worked for other manufactures but his Studebaker designs were the high points of his career), Loewy brought the American automobile back to its origins. The first recognizably modern automobile, the 1902 Gasmobile, was a luxury item costing the equivalent of a quarter million dollars, and it defined modernity in both technical and artistic terms (it was written up in Scientific American). A mere seven years later Henry Ford's Model T recast the automobile as drab, functional mass transportation, the Singer sewing machine of motor vehicles. Pedestrian styling would mark the American automobile for the next forty years with the exception of a few unsuccessful styling exercises such as the Cord and the 1933 Pierce Arrow.
Loewy's spaceship Studebaker changed all that, and a year later Cadillac sprouted masses of chrome and a pair of jutting tailfins. The car had become an object of contemplation.
Most nineteen fifties American cars were luxury cars. There was luxe, deluxe, and whatever was beyond that. You got fins and chrome at entry level along with "push button driving" via automatic transmission, a powerful V8, and air conditioning later in the decade. Chrysler even offered a car with a built-in record player. I rode in one. The tonearm tended to skip, but I can tell you there's nothing quite like racing down the interstate at ninety miles an hour with a single of Link Wray's "Rumble" blasting from the box.
And you were always in fashion because the deal was that you traded in every three years and got a new one with yet more chrome, more power, higher fins, and a softer ride.
What possessed the corporate guys to hire creative madmen like Loewy and to make automotive production a perpetual fashion show? Maybe it was in the air. The fifties was the great age of industrial design in America. Maybe we weren't producing masterpieces like Pinnafarina in Italy but our stuff defined an era and a sensibility in a way theirs never did. Pinnafarina's best work is timeless. Loewy's work was time bound, and except for his last hurrah, the incomparable Avanti which pays tribute to and ultimately surpasses Pinnafarina, all of his cars declare the period in which they were made.
Of course the glory of the American automotive industry occurred at the maturation of the American car culture, that culture of bedroom communities, and freeways, and shopping malls, and drive-in movies. The cars changed as the nation changed and the look of the cars celebrated that change. There's no way that cars can matter in the same way today. They will have to matter in different ways, but ways which engage the psyche. All this talk about fuel efficiency and green technology is horribly misplaced and misses the point. People don't buy cars to be virtuous, and virtue won't save the American auto industry.
And let's not decry the Big Three emphasis on SUVs. In marketing terms the SUVs were well considered and desirable. They made a statement. The statement may have been "fuck you" to the other driver, but one can't discount aggression as a motivation in the buying decision. I'm not saying we should bring them back, but we shouldn't ignore the ingenuity they represented back in the days of cheap gas. Who'd have guessed the ordinary driver would have hankered to have had an ungainly, overweight, decidedly unlovely off road vehicle. Detroit guessed that and they were right. Now they're wrong, of course, but you can't be right indefinitely.
Reflections on the Los Angeles Auto Show
Two days ago I went to annual auto show at the L.A. Convention Center. I've been attending for forty years now, though I missed a few shows in the seventies when I was in graduate school in another state.
I'm sad to say that I didn't see any evidence of Loewy level creativity or a new vision of what automobiles are supposed to be. No one seems to be able to re-imagine either the form or function of the automobile. That's ominous and that's what's going to kill the automotive industry just as much as expensive fuel and a severe economic downturn. Of course Loewy entered the business in its upswing. People would have bought cars in the late forties even if he had not chosen to make them beautiful because there was so much pent up demand. What would he do today if he could return to his drawing board? Something totally unexpected. Of that you could be sure.