By Jim Hagerty
The days of churning out millions of gas-guzzling SUVs, vans and sedans seem to be over in Detroit.
Last week, Big Three automakers announced they have successfully overcome their decades-long addiction to large vehicles, and a focus on making lean, green fuel-efficient vehicles is now a bona fide reality. From hybrids to electrics, Detroit’s products are now averaging about 25 to 30 miles per gallon and using less gas.
Ford’s recent $550 million renovation of its Wayne, Mich., plant is complete, and the production of the Focus is in full swing. The 2012 lines will be available in four versions, including an electric car, unveiled Friday, Jan. 7.
Even as foreign makers remain on top of the fuel-efficient market—most notably Toyota, with its groundbreaking Prius—Ford, General Motors and Chrysler aren’t backing down. Chrysler and G.M. have both emerged from bankruptcy and have a handle on federal bailout relief efforts. Both are poised to join Ford in seriously challenging Japanese companies in becoming the go-to providers of reliable and quality green machines.
General Motors unveiled the Volt, a plug-in electric hybrid last month, while its Buick compact sedan is predicted to average more than 31 miles per gallon.
Although Chrysler still lags in the profitability department, its partnership with sister company Fiat should propel it alongside Ford and G.M. in time to chase foreign companies from the top of the ladder.
Since 2004, in what initially looked like a series of radical moves and the downfall of the American auto industry, Chrysler, G.M. and Ford have closed a total of 17 plants in the United States and Canada. The moves seemed suicidal, as each plant was in the business of accommodating the blue-collar, living-rugged-in-the-heartland pickup truck market. However, execs say the shifts were necessary, especially in the wake of monstrous crude oil prices and Obama administration incentives for making fewer gas-chugging vehicles.
According to numbers, more than 45 grants worth about $2.5 billion allowed the Big Three to do prompt and detailed manufacturing research related to answering the immediate call to be more efficient.
General Motors grabbed $240 million to design the Volt, spokesmen said.
Meanwhile, all three companies are preparing for crude oil prices to reach the neighborhood of $120 to $130 a barrel as early as this year. If and when that occurs, reps say, the American auto industry will remain strong to service a growing market of green drivers.
“All of us know energy is going to be more expensive going forward,” Ford President and CEO Alan Malally said. “Consumers are coming together around the world on quality as a reason to purchase and fuel efficiency as a reason to purchase.”
From the Jan. 12-18, 2011 issue