Auto Nation CEO says gas prices will benefit Detroit
Mike Jackson is the Chairman and CEO of Auto Nation, the largest dealership group in the United States. Auto Nation showrooms around the country sell just about every brand of car offered here and Jackson is actually glad to see gas above $4 a gallon. While this may seem odd since sales have been in free fall lately, especially the once mighty and profitable full-size truck and SUV segment, it actually makes a lot of sense if you look out past the next quarterly report. For far too long, American automakers and consumers have had a mutually destructive co-dependent relationship. Car buyers liked big powerful trucks in an age of cheap gas and manufacturers were more than happy to supply the demand. As interest began to wane, automakers started piling on incentives to keep drivers on the hook and they kept buying prompting the manufacturers to keep building, etc. Unfortunately the lead times to get new product out in this industry are long and although new, smaller, more efficient products are coming, they will take time. In the mean time, carmakers and dealers are feeling the pain. Jackson believes that pain was just what was needed to move the industry forward to make fundamental changes. Part of the problem is that government has enabled the co-dependency by trying to keep fuel prices low. At the same time they have added to the industry's grief by bringing on new fuel economy standards that are at odds with low fuel prices. As American car buyers have demonstrated time and again, they buy the most vehicle they can afford to operate. While driving gas prices down may benefit consumers in the short term, over the long run it will cause more pain. Jackson wants prices to stay up to help drive demand for development of a new generation of vehicles that will wean us off petroleum.
[Source: Wall Street Journal]
Reader Comments (Page 1 of 2)
stevejust 8:41PM (6/10/2008)
Well, Detroit could either lead, follow, or get out of the way. This article says it's a good thing that now that US car companies are going to be forced to follow, like a petulant child finally brushing his teeth and going to bed after staying up far too long playing with his toy trucks.
When GM was pumping millions of dollars into advertising the Hummer H2, Honda and Toyota were developing hybrids. GM insisted people didn't want more fuel efficient cars back in 2003. And maybe they didn't. But you'd have to be a real flippin' idiot not to see the $4 a gallon prices we have now coming. In 2003, I said they’d be here in the summer of 2006. I was only off by two years. Companies like the once-Big 3 employ teams of economists to figure out things like that and make business decisions on those predictions.
Instead of leading the way Honda and Toyota did, they did nothing.
With companies like Tesla and Fisker starting up and doing what they should have been doing all along, the question is whether they shouldn't just get the bleep out of the way at this point. They’ve made such bad decisions they don’t really deserve to be able to follow at this point.
And this is coming from a person who would LOVE to be able to buy a car made in the US, but who 1) cares more about the environment than that, and 2) knows that “US” cars aren’t really all that made-in-the-USA so much anymore. I mean a hybrid Camry made in Kentucky is arguably more “American” than a lot of “American” cars.
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Mark 10:05PM (6/10/2008)
We should have been off of gasoline by now if the Big 3 didn't kill off their electric cars. Now they are madly playing catch-up while SUV's and trucks are being left to rot, no matter how many incentives they give.
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Luke 10:08PM (6/10/2008)
My next car *will* be an American-made electric vehicle. Hope it's made by GM or Ford, but I'm not getting my hopes up.
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jake 12:11AM (6/11/2008)
@Mark
To be fair, ALL the automakers killed off their electric cars, not just the big 3. That's not where they failed, the part where the big 3 failed is they insisted on large trucks and SUVs and until recently haven't bothered to improve quality and reliability of their vehicles (perceived or otherwise). At least GM is looking like it's about to turn around. And Ford has a few good ones coming up the pipeline (ie the fiesta, next taurus). Chrysler doesn't seem to have any vehicle coming that will save them.
At least GM is still coming out with the Volt and it seems they are serious about it.
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Phil 8:12AM (6/11/2008)
Perhaps one day the US will design and build cars that the rest of the world wants to buy.
That will only happen when the build quality and efficiency catches up with Japan and Europe.
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Whopper 8:29AM (6/11/2008)
@5 The Harbour Report released recently showed the two most efficient automotive plants in the US are the Toledo, OH Jeep plant and the Oshawa plant that GM plans to close. Note that this includes all North American auto plants, European and Asian transplants included.
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Peter 9:10AM (6/11/2008)
I love electric cars and the battery electric cycle is the most efficient one going (~90%).
But the batteries were not ready for primetime when GM (and others) abandoned their electric cars. Nothing nefarious killed the electric car. It just wasn't economically viable.
In reality batteries still aren't ready. GMs volt is not really economically viable. GM won't be able to sell at a profit, buyers won't save money driving them when you factor battery replacement costs.
It is GMs "Hail Mary Shot". GM let themselves get behind on alternative drive trains, and they need something to show they have the engineering chops and ability to turn the company in the right direction, something to serve as a Halo Product for efficiency at GM.
I wouldn't touch a 1.0 GM Volt, but GM needed to this and I am glad they are doing it. It will drive competition at other companies, getting practical electric cars closer for all of us.
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BlackbirdHighway 11:49AM (6/11/2008)
The question is not: "Are electric cars economically viable?"
The question is: "At what price for gasoline are electric cars economically viable?".
I think were going to find that out soon.
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Lithous 9:22AM (6/11/2008)
"When GM was pumping millions of dollars into advertising the Hummer H2, Honda and Toyota were developing hybrids."
Oh yeah, and creating the more huger Pilot, MDX, Tundra, Land Cruiser, Highlander, etc., etc. Wait, I forgot, the GM Two Mode Hybrid design can be found in watered down version only in the Lexus that cost $115K. It is about to be put in the VUE as well. It may not be here today BUT you specifically stated "developing hybrids" and that is EXACTLY what GM has been doing. A much better version actually (not even counting the development of the series hybrid.) To act as if GM has been doing nothing with hybrids for nothing short of years (yes, before 2003) is belittling the work done by all those engineers which is much more work than you have done on hybrids.
"Instead of leading the way Honda and Toyota did, they did nothing."
Nothing? No, you have done nothing. GM has been developing two mode hybrids, series hybrids and a 40mpg car getting ready to be built in Ohio. Unless you are implying that they "did nothing" and have magical powers to do nothing and then all the sudden next year something appears; otherwise, if you are talking about a few years that 2 of 20 companies decided to create hybrids and one of the companies canned at least two of their models, then whatever. But why hasn't Toyota or Honda done anything in the crash notification technology arena? I.e. no OnStar automatic crash notification. I see, the Japanese had gas prices double ours so they worked on that technology because that is the situation where they live and they are geniuses for it. But automatic headlights, I've had that on every GM vehicle since 2002 and I still see Hondas and Toyotas with their lights on in the parking lot. If anything, if the Japanese were so great, their cars should be getting 60mpg without hybrid systems. I mean, 30 years ago their cars were getting so much better MPG, isn't technology supposed to get better over time? What the F happened there? Oh wait, their cars were LIGHT death traps in the 70's and 80's and so that was more important than surviving a crash.
"With companies like Tesla and Fisker starting up and doing what they should have been doing all along,"
LMAO. How many cars have the two companies actually delivered to customers? As much as the press says GM hasn't sold many hybrids, it's still thousands more than these two companies put together. I know these are electric so a better comparison is that GM probably sold more S-10 electric vehicles than these two companies you mentioned have sold EVs.
"And this is coming from a person who would LOVE to be able to buy a car made in the US,"
Yeah sure. I really believe that. Yeah, if it did everything twice as good as the competition only. Here's hoping your spouse wakes up and expects you to be twice as good in every aspect to every man out there or else, see ya. Sorry, that was rude, but it makes my point. If you really cared as you say then you will buy the 40 MPG GM coming out next year.
"1) cares more about the environment than that,"
So then, when did you assemble your first electric car? Kits are out there. You care *so* much, more than your country about it then I know you must have built many electric cars for your use.
"2) knows that “US” cars aren’t really all that made-in-the-USA so much anymore."
Hmm... Cobalt, Malibu, Aura, G6, Lucerne, CTS, STS, Sky/Solstice and soon a 40mpg Ohio built car and the Volt is scheduled for Michigan. I'd say every class of vehicle is available assembled here by GM except the Aveo which, name a competitor that makes that size here?
"I mean a hybrid Camry made in Kentucky is arguably more “American” than a lot of “American” cars."
I didn't think the *hybrid* camry was *assembled* here but you could be right since you love Japanese products so much you should know more than me. But, GM's hybrid system is from Baltimore, MD. All Toyota hybrid systems are from Japan. So ironic that you would pick the Camry hybrid to try to show the Americaness of Toyota. BTW, the 1.0 L engine going in the Volt will be built in Flint, MI. I don't know who makes such a small engine in America but GM is going to do it for the Volt. Such unAmerican of GM.
"We should have been off of gasoline by now if the Big 3 didn't kill off their electric cars."
LMAO. GM somehow "controlled" the market movement for a couple years in the late 90's even when the Accord and Camry were the best selling cars. Gee, how come GM could control electric car sales but not who was the best selling vehicle in general? Makes perfect sense. GM forced Toyota and Honda to stop making electric vehicles but when they told them to stop making family sedans they must not have listened. Gee, interesting how conspiracies work.
"My next car *will* be an American-made electric vehicle. Hope it's made by GM or Ford, but I'm not getting my hopes up."
Seeing how the Prius has been out for 10 years and it is not assembled in the U.S. yet and even if it was it would be assembled here and the parts (the main hybrids parts and most other parts) would be made in Japan. Your desire for a true made in America electric vehicle (you know, mostly U.S. parts assembled here) isn't going to happen unless GM does it. No, GM specifically because Ford loves Mexico and Chrysler is bedding with Chinese Chery. So good luck on that one!
Most of you guys are dumber than a bag of nails. Seriously. Clueless.
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Throwback 10:17AM (6/11/2008)
Phil, the US does design and build cars the rest of the world wants to buy, and are buying. GM makes money in every market except the USA. Ford's European and South American operations are very profitable. Europe in particular loves Fords. Pick up any Euro car mag and you will see what I mean. Mulaly to his credit realizes the Euro Fords are very desirable and is working to merge the products on both sides of the Atlantic where possible. The question is, does he have the time and money to get it down? Chrysler on the other hand is a lost cause, sad to say.
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Jan 12:45PM (6/11/2008)
Throwback,
Fords and GMs sold in Europe are actually designed in Europe and in overall they have better build quality than US models.
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Throwback 1:45PM (6/11/2008)
Does that mean they are not American cars? Is the Euro Accord European, and the Accord built in the USA American? My point is US car companies can and do build desirable cars that are bought all over the world. Waggoner is the CEO of all of GM, not just North America. The challenge is to make more of the cars sold in the USA more desirable to more Americans who prefer large vehicles.
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Whopper 4:37PM (6/11/2008)
Jan, the source of your factual statement "...Europe and in overall they have better build quality than US models." is ??? Or are you just stating an opinion. If so, it is not in concert with respondets to an Edmund survey of 2008 models. A mix of US, Japanese and European models in different catagories. Oh, and the Mercury Mariner hybrid drew a higher rating than the Prius. European build quality...Lucas Electric and Magnetti Marelli left me stranded more times than I can count.
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stevejust 2:42PM (6/11/2008)
@Peter: Batteries not being ready is such a myth. There are dozens of RAV4 EVs driving around the LA area that are 6, 7 years old or more? I don't know how many have had replacement batteries, but it seems like the ones for sale on E-bay are being represented as still able to hold @ 100 mile charges. If you have some hard data or even anecdotal evidence to the contrary, I'm all ears. Otherwise, quit perpetuating industry propaganda.
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stevejust 3:16PM (6/11/2008)
@Lithous
If you call the Saturn and Malibu “hybrids,” I feel sorry for you. They are extremely “mild hybrids,” a technical term for “they suck.” An oversized alternator and a stop/start system does not a hybrid make when the comparison vehicles improve gas mileage by several orders of magnitude.
The Tahoe 2 mode hybrid is more interesting, but it is still an oversized, overpriced vehicle. And it has finally arrived just in time as Americans forswear big SUVs. How… ironical.
You say I have done nothing. On the contrary, I’ve been driving around in a hybrid for the last four years averaging 48.8 mpg in mixed city/highway driving. Show me an American car that gets close to that. The mythical 40 mpg GM coming out next year? It’s still 9 mpg behind my hybrid, and by the end of next year the next generation Prius will arrive. And sorry friend, I’ve already got a deposit on the Fisker Karma which is slated to be made in the US. So I won’t be buying a car that gets worse gas mileage than the car I bought in 2004 in 2009. Sorry.
Oh wait, I guess I could find a 10 year old Geo Metro that might come close to averaging 48.8 mpg in combined driving. I’m sure it’d be reliable. I’m sure the AC would still work. And I’m sure it’d have the anti-lock brakes, airbags, etc., that my hybrid has. And yes, sure years ago there were efficient cars like the Metro and the Honda CRX – but today we need airbags and all kinds of other safety features, in no small part DUE TO THE DUMBASS BIG TRUCKS DETRIOIT’S BEEN PUTTING ON THE ROAD FOR THE LAST 20 YEARS.
The hybrid Camry has been made in Georgetown, KY since late 2006. Check your facts.
Who's the clueless one?
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Peter 3:41PM (6/11/2008)
It is not a myth. With unlimited money they are viable, but when money enters the picture they are not.
The Rav4 battery replacements cost $26k. Do you think that is economically viable? What do you think the price of the vehicle would be is sold for profit? The battery alone costs twice the price of other cars.
Electric cars remain an interesting toy for the price is no object crowd, but for the rest of us the battery technology is still not economically viable.
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stevejust 5:25PM (6/11/2008)
@Peter: I have a three part question for you:
1) How many of the 1,575 RAV4s EVs don't work anymore because their battery system is dead?
2) How many of the 1,575 Rav4 EVs have had their batteries replaced?
3) How many of the 1,575 RAV4 EVs that were saved from the crusher are still driving around Los Angeles?
I've seen three unique RAV 4 EVs in the past month driving around LA (not counting the fleet of 20 or so that Santa Monica still has.)
While no one would want to drop $26k on a battery replacement from a third-party supplier, this assumes that such a replacement is necessary. And sure, it will be necessary one day, but the cost of a RAV4 EV was about $39k after incentives. I know lots of people who are leasing S and G class Mercedes Benzes who blow more than $39k during the life of a lease of 4 years and won't have a car to show for it at the end of those 4 years.
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Peter 9:03AM (6/12/2008)
I don't have the statistics and likely neither do you but they are irrelevant. Even if they have a perfect record that doesn't make them financial viable which was what I said.
A $40000 vehicle that has about 100mile range (per day do to charging time) and a safe radius of operation of about 40 miles from home base hardly strikes me as ready for prime time technology. Even at $40000 they were likely subsidized by Toyota.
Just because the batteries have held up well doesn't mean they will last forever. Part of the reason they held up is that you really have a hard time putting the miles on these vehicles given the range limitations and that need to not stray too far from home base.
A $40000 city-only commuter car is just not financial viable for the rest of us. Only the "money is no object" set need apply.
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Emil 4:23PM (6/12/2008)
An answer to No. 8
"Oh yeah, and creating the more huger Pilot, MDX, Tundra, Land Cruiser, Highlander, etc., etc. "
No one claims that Toyota are angels. They build gas hogs too. But the contribution of Prius to reducing tailpipe emissions is large. And Toyota didn't crush their RAV4 EV's ...
"GM has been developing two mode hybrids, series hybrids and a 40mpg car getting ready to be built in Ohio."
And how many have been sold in the last decade ? 40 MPG is quite a good mileage. But Prius gets 48 MPG and its next version will probably get better.
" I see, the Japanese had gas prices double ours so they worked on that technology because that is the situation where they live and they are geniuses for it."
Prices of oil products got 2 times more expensive in the last couple of years. And the Big 3 are desperate. But who killed the electric car ?
"LMAO. How many cars have the two companies actually delivered to customers? As much as the press says GM hasn't sold many hybrids, it's still thousands more than these two companies put together."
Of course Fisker and Tesla wouldn't displace a need for oil. But they are strategically important, showing the OPEC mafia that their festival woll not last forever.
"I didn't think the *hybrid* camry was *assembled* here but you could be right since you love Japanese products so much you should know more than me. But, GM's hybrid system is from Baltimore, MD. All Toyota hybrid systems are from Japan. So ironic that you would pick the Camry hybrid to try to show the Americaness of Toyota. BTW, the 1.0 L engine going in the Volt will be built in Flint, MI. I don't know who makes such a small engine in America but GM is going to do it for the Volt. Such unAmerican of GM."
Well, If one buys a "pure" American car that gets 20 MPG , he will spend 24,000$ on oil products for 120,000 miles ( 4$ per gallon , 6,000 gallons of gas ).
If the same guy bought a "pure" foreign car for the same sum that gets 30 MPG - he would spent 4,000 gallons for the same mileage - 8,000$ less !
Since the point of "foreign" vs. "domestic" was covered well by yourself showing relations Ford-Mexico and Chrysler-China - in the case of oil - the most part of the extra 8K USD will get it way to enemies of America, not to mention the extra pollution and taxpayers' money.
When you buy an American-built Camry Hybrid - you actually buy high-skilled work, years of R&D and reduce tailpipe emissions.
But when you buy a gas hog, even built in America - you encourage hate (Ahmadinejadd), populism (Chavez) and political opression (Putin & co.)
"GM forced Toyota and Honda to stop making electric vehicles but when they told them to stop making family sedans they must not have listened. Gee, interesting how conspiracies work."
Again, nor Toyota neither Honda are the righteous - but at least they kept building hybrids. GM promoted trucks and SUV's. And Toyota didn't crush RAV4 EV's...
"Seeing how the Prius has been out for 10 years and it is not assembled in the U.S. yet and even if it was it would be assembled here and the parts (the main hybrids parts and most other parts) would be made in Japan. Your desire for a true made in America electric vehicle (you know, mostly U.S. parts assembled here) isn't going to happen unless GM does it. No, GM specifically because Ford loves Mexico and Chrysler is bedding with Chinese Chery. So good luck on that one!"
See my remark above. But I do admire Ford for their Escape hybrids. And more important is the point , that there is no shame to send money abroad to acquire knowledge, state-of-art technology and education. There is a shame ( if not a crime ) to send hard-currency to enemy countries for raw materials.
"Most of you guys are dumber than a bag of nails. Seriously. Clueless."
Thanks for raising the discussion level. Since You love GM and Saudi sheikhs love GM too, although for other reasons - let me quote a moslem wisdom :
If one calls another "infidel" - at least one of them is infidel. I think the expression may be applied to "dumb" too.
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Debra Forte 12:04AM (6/18/2008)
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