The Big Three: What is going to happen to Detroit?

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Not matter what we think of the lousy administration and short-sightedness of its decision-maker, they won’t be the ones to pay if the Big Three implode. But support to give the Big Three money fades as reports of past errors come back to haunt them.

Here are a couple of such errors:

1. Hybrids – The Big Three let Honda and Toyota beat them to the punch a decade ago, then sat on the sidelines, arguing hybrids were too expensive, they wouldn’t sell, yada yada yada.
They were right. Hybrids were expensive. And they were slow to catch on. But the Japanese automakers showed patience, and they were rewarded. These days Toyota and Honda can’t build hybrids fast enough to meet demand and the Big Three are scrambling to catch up.
2. Electric vehicles – All of the automakers — including Honda (the EV+) and Toyota (the RAV4 EV) — are guilty of pulling the plug on EVs prematurely in the late 1990s, arguing the technology was too expensive, the batteries unproven and the demand for such cars nonexistent. But GM lost the most with the EV1 debacle. You can argue the car was entirely too expensive and way too advanced for its time — “The EV1 was a work of art,” one EV advocate told us. “And that was the problem.” — but the fact remains GM held the future in its hands and threw it away.
3. Sports Utility Vehicles – American Automakers relied entirely too much on SUVs to pad their bottom lines. Yes, they were dirt cheap to build and allowed Detroit to make mad money. But the over-reliance on SUVs made the Big Three so fat and lazy they couldn’t respond to — or couldn’t see — consumers’ sudden shift toward passenger cars. Japanese and European automakers cranked out a lot of SUVs themselves, but not at the expense of small and mid-size cars.

Read the rest of this article here.

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