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Why GM is losing ground to Toyota and Honda

February 3, 2008 by devinhedge

If you have been living under a rock, I'll catch you up to speed on the U.S. auto industry: Ford and GM have squandered away technical inovation much in the same way they did in the 70's. This time, they won't be able to recover due to globalization.

The latest example is the GMC Denali XT concept car. GM is bring an updated Chevy El Camino to the auto show with a hybrid engine. Nevermind that the Chevy El Camino looks silly. Dig into the story further: GM hasn't brought any concept cars into production in years. This will likely never see the production line as well. Adding to the poor excuse of a concept car is the 4.9-liter V8 with direct-injection gas burning engine with an output of ~326HP. Sure it will burn E85, but so does my 1996 Ford Explorer without modification or need for the FlexFuel logo plastered on the tailgate. The hybrid powerplant is the same as the of the Yukon hybrid which gets a whopping ~22.7 mpg. I'm trying to see how this is good for the environment or for my wallet. Not to mention the max. payload on this puppy is estimated at 1,100-pounds.

What GM and Ford has failed to see (again) is that the world has changed. We don't need big vehicles. Truth is, we never did. The only reason we have them now is that it somehow got woven in the fabric of American culture that we have to gluttonous just because we can. Don't get me wrong, I love my Ford Explorer, but it's going to the scrapheap as soon as I can afford to get the next generation Toyota Something hybrid running on a hybrid hydrogen fuel-cell powerplant.

Gluttony has never been good for anyone, let alone an entire society. It caused the downfall of the Roman Empire. It has gotten the world where it is with global warming. Gluttony also breeds contempt by third-world countries who are the most likely future generators of greenhouse gases and pollutants. This contempt breeds political unrest and thus local or regional violence breaks-out.

Simply put, if the United States doesn't set the example, someone else will. If GM and Ford won't step up, some other automobile manufacturer will. If GM and Ford don't start bringing designs to market that are pertinent to reducing energy reliance on other countries, halting global warming due to greenhouse gas emissions, and reducing toxic pollutants in the air; then another car company will. They should set the example instead of bringing us more concept cars that never make it to the production line. Toyota and Honda are already leading the industry. If GM and Ford does not act, their business model will no longer by relevant to the market and the long term viability of their existence as corporations will be called into question.

Sadly, GM and Ford may already be there. The next year will be the real litmus test. Will GM and Ford be able to pull out of their nose-dives once a new administration is in the White House?

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