Letters: A Different View of the Auto Industry
The U.S. auto industry article “Reinventing Wheels” [Fall 2009] was riddled with sweeping generalizations, environmental piety, and intellectual arrogance. The author liberally quoted former [UW-Madison] chancellor John Wiley, who opined that Detroit “made stupid decisions” by fooling us into buying big, heavy, high-powered cars we really did not want. Mr. Wiley also claims that the VW Beetle “ate their (Detroit’s) lunch” in the 1950s. The rest of the article is just as slipshod.
None of the people quoted in the article provide any real market data. Let’s start with the Beetle. It was a niche vehicle in the U.S. in the 1950s, and with only forty horsepower, it met the needs of a limited group of people. The heavy, powerful cars that the author (and many of those quoted) decry as the downfall of Detroit are the very products that all major automakers who sell in the U.S. provide. Consider that Mercedes, BMW, Audi, Nissan, and Toyota all have gravitated to larger vehicles since the 1970s. Has the author heard of Toyota’s Lexus brand, seen the huge new Toyota Tundra pick-up truck, or Nissan’s Titan truck?
While the Japanese automakers continue to make excellent economy cars, their recent success is grounded in providing people with reliable and affordable vehicles that compete with Detroit in every niche. One of the most profitable auto manufacturers is Porsche, whose product line includes high-powered sports cars and SUVs with range-topping models having over four hundred horsepower.
There is nothing wrong with making and selling economy cars, and Detroit does have some decent ones. To suggest that Detroit has failed largely due to their absence, or to suggest that Detroit will succeed on the basis of hybrids and electrics, highlights the danger of businesspeople listening to academic dreamers who subsist on government grants and handouts.
Fred Birnbaum ’83
Published in the Winter 2009 issue