DETROIT RISES
AND SO DOES AMERICA
F
By Drew Giorgi rom 2009 to 2013, there was no dearth of voices decrying the auto bailout buttressed by journalists articulating a deep skepticism that the government could do anything to rescue failing automakers let alone enable them to become competitive again. After the bank failures, the collapse of Detroit was truly a symbol of how 21st century America had fallen behind in the global marketplace it had created in the 20th century. The changing nature of the auto industry engendered the question: What was the government saving? In a real sense, these “domestic” automakers hover over America, with plants and businesses all over the world. Once upon a time they were central to American life, but today’s GM is castigated in the press for taking government help, trimming its domestic workforce, and building cars in China. Starting in 2008, the federal government spent about $80 billion to save Detroit. Recipients included GM and Chrysler—Ford took no money. The Bush administration initiated the program with an infusion of $17 billion; the Obama administration took over in 2009. Although articles started appearing as early as 2013 claiming that the bailout was over, it really ended on Dec. 8, 2014, when the Treasury Department sold off its GMAC shares. At that time, measuring the stock market performance, the government lost roughly $9.2 billion; however, keeping the automakers intact led to enormous benefits. According to economist Robert Samuelson, automakers were responsible for 25% of the gains in manufacturing and added nearly 300,000 jobs during the recovery, including those at dealerships and parts stores. At the end of 2015, GM was number three with 9.8 million vehicles sold, just behind market-leader Toyota (10. 1 million) and Volkswagen AG (9.93 million). In 2016, the auto industry expects to sell more cars than ever in the US; however, the rest of the world—from the BRIC countries to the European Union—is experiencing a slump, mostly due to struggling economies. While GM has moved some manufacturing overseas, many foreign automakers—from Hyundai to Mercedes—have invested millions in American manufacturing seeking both talent and good press. This can prove tricky for buyers seeking to buy American. For example, two identical Hyundai Elantras on the same lot might be from different countries; typically Korea and America. The
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Local Living Volume 6 | Issue 2
car’s first VIN number indicates origin; 1, 4, or 5 denotes the vehicle was made in America. Today’s American automakers are more robust than many experts ever expected, offering the most dynamic technological advances in the industry. While Mercedes has put new electric models on hold and Volkswagen has sullied its reputation with an emissions scandal, Chevy has launched the new Malibu hybrid and debuted the Bolt at the 2017 Detroit Auto Show. An affordable, allelectric vehicle free from range anxiety, Chevy’s Bolt will beat Tesla’s affordable Model 3 to market by at least a full year. Chrysler recently launched the redesigned 200, which features a highly efficient nine-speed automatic— something GM and Ford are now working on jointly. With 2016 café standards requiring cars get above 34 MPG in real-world conditions, new cars are hundreds of pounds lighter than their predecessors using lighter steel and carbon fiber. But the innovations are not all about engines and efficiency; cabin quality and dashboard electronics have seen substantial upgrades, especially when it comes to interfacing with third-party software like Android Auto and Apple Car Play. Smartphones provide valuable enhancements, including up-to-date maps with real-time traffic reporting along with a host of approved in-vehicle apps. Safety features such as lane-keeping assist, collision prevention, and blind spot monitoring are also sound options to consider. In 2016, a backup camera is a must have to ensure resale value as Congress will soon make it required equipment. Lastly, traditional outsiders like Tesla and Google have brought a sense of the fantastic back to the industry with their focus on autonomous vehicles. In response, many automakers are now repositioning themselves as mobility companies. Ford has joined Google in a partnership that envisions bringing autonomous vehicles to market in as little as four years. Tesla has already introduced level 3 autonomous driving capability in its Model S. The National Highway Traffic Safety Administration describes this level as when a driver monitors the car, ready to take over for safety reasons. Tesla plans to get to NHTSA Level 5 by 2020, which would make the car the equivalent of a robot chauffeur. Detroit is back, but within a decade you may find the once whimsical notion of summoning your car to pick you up quite commonplace. You may also miss the headclearing benefits of a long drive behind the wheel.