THEGREENGROK

GM Declares Bankruptcy


by Bill Chameides | June 1st, 2009
posted by Erica Rowell (Editor)

Permalink | 3 comments
Used to be that tail fins were all the rage with American cars. Once again things are in flux on America's car scene. What's next? (Wiki Commons)
Not everything is rosy when it comes to our cars and the um "open road."

The end of an era, to be sure. But how did this happen? The result of meddling by “pointy-headed busybodies” or the inevitable march of time?

I’m sure you’ve heard the news: General Motors has filed for bankruptcy. Some are pointing fingers, blaming government regulators, environmentalists, and safety mavens for handcuffing Detroit and rendering the mega-horsepower “muscle” cars of the 1950s on which Detroit built its dynasty a thing of the past. (See P.J. O’Rourke’s “The End of the Affair,” WSJ, 5/30/2009 and Daniel Henninger’s “Obama vs. The Beach Boys,” WSJ, 5/29/2009.)

There undoubtedly are many reasons for Detroit’s breathtaking fall and I would not rule out a re-emergence of a new, more competitive Detroit in the years to come, but I’d be willing to bet that market forces, chief among them the specter of oil shortages, and national security concerns have a lot more to do with the gas guzzler’s demise than, in the words of author O’Rourke writing in Saturday’s Wall Street Journal, the “pointy-headed busybodies of the environmentalist, new urbanist, utopian communitarian ilk.”

Can We Get Real?

Not everything is rosy when it comes to our cars and the um “open road.”

While it may make for good copy to wax nostalgic about the romance of pedal-to-the-metal power — likening the acceleration of a Pontiac GTO to spurring hundreds of horses into action — and to lament the end of the “muscle car,” a little reality would help. So here’s this pointy-headed guy’s dose of same.

Let’s not forget that the rise of the automobile did not all good things bring. “Pollution from cars and trucks accounts for about one-third of all the U.S. air pollution in the United States, and one-fifth of all carbon dioxide emissions.” (Source: NIH) And that air pollution does not just mean hazy skies. Air pollution kills — some 70,000 each year according to epidemiological studies from around 2000, though more recent studies suggest the actual numbers may be two to three times higher (see here, here, and here). There are also the grim statistics [pdf] of road fatalities. And did I hear anyone say “traffic jams”?

Don’t Forgot That Oil Thing

Remember what George W. Bush said in 2006? “America is addicted to oil.” One might even argue that Detroit and GM in particular were the enablers of our addition: building big, gas-guzzling cars and SUVs and then bombarding us with ads to convince us that those were the kinds of “cars” we wanted. Was it just a coincidence that selling us those SUVs made it possible for car companies to make an end-run [pdf] around federal automobile emissions standards (“light trucks” having different requirements even as they became an obvious personal vehicle choice like a car) and bloat their profits?

Market forces, and not government tinkering, ended the American affair with gas guzzlers. Rising gasoline prices have led consumers to seek out smaller, more fuel-efficient cars. Toyoto’s successful marketing of these fuel-efficient car is one large reason it overtook GM as the world’s biggest carmaker in 2007. (Ironically, Toyota’s own investments in SUVs and trucks is now coming home to roost for the Japanese automaker, as well.) Meanwhile, dissatisfaction with long commutes in stop-and-go traffic have led increasing numbers of Americans to move back to the city or to seek out mass transit.

Taking the Long View

Though time has marched on and technology has advanced, we still cherish our American icons of yesteryear.

Yes, America has been a car culture for decades. But time was when we loved the Pony Express, and who can forget the days when the railroad was king?

O’Rourke decries the loss of freedom that comes with the changing vehicle. But truth is the changing automobile landscape doesn’t mean a loss of freedom — it simply opens up the possibility for a new symbol.

Though the Pony Express ceased its “fast” mail-delivery service once the transcontinental telegraph piped into action in the 1860s, its emblematic power of uniting far-flung places lives on. In its place came a new symbol of America’s traveling freedom. It was the freedom previewed in the 1830s by the Best Friend of Charleston passenger train and brought to fruition in 1869 with the transcontinental railroad.

The rails ruled for almost a century, remaining Americans’ transportation of choice through the 1930s. “Rail travel tripled between 1896 and 1916, and trains carried ‘95 percent of all intercity transportation through 1910.’” (Source: Duke University, “Brief History of the U.S. Passenger Rail Industry“) After World War II, when air travel began to take off and car sales increased, it was apparent another big transformation was in the works. But how did that occur? One might argue that, among a number of forces, a set of “pointy-headed busybodies” really did a play a role.

Time was when the rails were king. A number of forces helped them lose their crown, and the story is a little-known slice of American history. (Western History/Genealogy Department, Denver Public Library

It turns out that we became a nation of cars in part through antitrust activity on the part of GM, Firestone, and a handful of other companies, including some oil companies.

First they invested in a holding firm (National City Lines, Inc.) that bou
ght up more than 100 electric surface-traction systems in cities such as Los Angeles, Tulsa, Jackson, and Detroit. And then National shut them down and replaced them with GM buses. And slowly but surely the American landscape transformed from one crisscrossed with rail lines (anyone remember “The City of New Orleans,” Steve Goodman’s railroad song that Arlo Guthrie made famous?) into one strewn with highways and dotted with private automobiles.

And so began our love affair with cars. (For more information see Jonathan Kwitny, “The Great Transportation Conspiracy,” Harpers Magazine, February 1981, sub req’d. Also, Jeff Swenerton, “When Trains Ruled the East Bay,” Oakland Magazine, and United States v. National City Lines, Inc., 334 U.S. 573 (1948))

For a while the big sedan with those large tail fins was symbolic of that love affair. Or was it the Mustang convertible? More recently it was the SUV. It would appear that those symbols have become anachronistic. Don’t cry over spilled oil, America. Time for a new symbol.

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3 Comments

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  1. travis
    Jun 2, 2009

    If it is time to change from SUVs to enviro-cars, how should that decision be made; by the preferences of individuals in the market setting, or by the diktats of government central planners?

    • Matt
      Jun 3, 2009

      I think that question has largely been answered. GM has not been hemorrhaging money for the past few years because big government was in the way of the company making a profit. Sales of big trucks and SUVs had been declining for years, since the early 2000s, and when gas prices began their upward climb in 2005, culminating in 2008 at over $4 a gallon, people made their preference clear. Sales of SUVs and trucks that were the backbone of GM’s business, plummeted. The economic downturn may have pushed them over the edge, but I’m convinced that point would have been reached anyway, simply because of gas prices and the subsequent decisions of consumers in the marketplace.

    • Bill Chameides
      Jun 4, 2009

      travis: check your history. the demise of the purveyors of gas guzzlers was driven by markets, not government “diktats.”

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