You Are Better Off Now Than Four Years Ago Because American Auto Makers Are Innovating

Four years ago, the American auto industry was struggling.  After a decade of focusing on trucks and SUVs, the Big Three—Ford, General Motors and Chrysler—were unprepared for the effect of higher energy prices and the economic crisis on consumer demand. Throughout the early 2000s, the Big Three produced big inefficient vehicles. But with high gas prices and smaller spending budgets, consumers switched to foreign car makers for smaller, less expensive alternatives.  As sales plummeted and credit dried up during the Wall Street collapse, American car manufacturers idled plants, and GM and Chrysler turned to the federal government for financial assistance.

Now, in contrast, the American car industry is again on the cutting edge of technology and innovation and is competing globally.  Thanks to $85 billion in loans from the federal government, GM and Chrysler emerged leaner but stronger from bankruptcy, and the entire American auto industry has increased sales. GM and Chrysler are repaying their debt, and the American car industry is better anticipating consumers’ future needs, particularly by increasing fuel efficiency.

For example, in September Chrysler began retail sales of its natural gas powered truck, the Ram 2500 Heavy Duty CNG.  Although many auto makers have tried to develop natural gas technology, Chrysler is only the second manufacturer in the world to make these vehicles available to retail purchasers.  Chrysler’s truck can go 255 miles on natural gas before it must revert to its backup gasoline engine.

Ford is working to improve both natural gas and electric car technology, and Ford’s main plug-in hybrid car, the C-MAC Energi, is now competing with the Toyota Prius Plug-In Hybrid. It can go nearly twice as far as the Prius in its electric-only mode, and it also has a higher overall fuel efficiency rating.  While it’s not possible to measure the electric part of a hybrid car in traditional miles per gallon, the EPA developed an equivalent measure which combines a car’s electric capacity with its gas engine.  Ford’s C-MAC Energi has a fuel-efficiency rating of 100 miles per gallon equivalent, in contrast to the Prius’s 95 mpge.

GM is experimenting with ways to make its cars lighter, which reduces the amount of gas they use.  They’ve begun, for example, fabricating certain parts out of lighter materials, like aluminum.  They’ve also developed a new way of using magnesium, a metal that’s 33 percent lighter than aluminum.  High-end cars have been using die-cast magnesium parts for years, but GM has discovered a way to slowly heat the magnesium so that they can forge it as sheet metal.  This will allow GM to expand the use of magnesium to larger car parts like panels.  By 2020, GM hopes to routinely use 350 pounds of magnesium parts to replace 630 pounds of current components, increasing fuel efficiency by as much as 12%.

The Big Three struggled during the economic downturn because they weren’t in tune with consumers’ needs.  Now they are working on building cars of the future, rising to President Obama’s challenge to increase fuel efficiency to 54.5 mpg by 2025.  The auto bailout didn’t just save Detroit’s automakers—it gave the Big Three a chance to yet again revolutionize cars.

Go to MI State Page
origin Blog: 
origin Author: 
Comments Count: 
Showing 0 comments