I‘m in the Windy City today to blog the 100th Chicago Auto Show at McCormick place. The weather is frigid, and we’re expecting about a foot of snow later today. The kickoff is a breakfast address by Troy Clarke, President of General Motors North America. Clarke’s address picks up on the ‘Super Tuesday’ theme. He says that when it comes to cars, the American people vote with their dollars. He says that GM (and all other automakers) must make cars that people want to buy — not the ones that they’d like to sell. The automakers can’t just mass produce the most fuel-efficient car in the market and force them on consumers (which seems to be what many in Washington would like). Rather, they need to respond to challenges like energy security and global warming while giving drivers what they want. Clarke relates the tale of a focus group in Los Angeles in which the participants expressed a strong desire for a ‘green vehicle.’ When the facilitators teased out what they wanted more precisely, the general consensus was for a Chevy Tahoe that gets 45 miles to the gallon.
Clarke points out that GM needs to anticipate the needs and desires of the consumers long before they recognize them. New car models take years to develop. The manufacturers need to be working today on the vehicles that people want in 2013. Clarke says that GM has dramatically increased fuel economy since the 1970s. That’s why (he says) they’ve tried to work with government to increase fuel efficiency standards. But they need to do it consistent with the demands of the consumer. GM will sell 8 different hybrids in the US by the end of the year, and introduce 16 more in the near future — all to ensure that they are addressing national goals while satisfying the customer. Clarke makes a big pitch for ethanol, and calls on the government to give more attention to the need for the infrastructure to make E85 fuel widely available. He says that in the near future, the U.S. can save 53 billion gallons of gasoline by increased use of ethanol. But the thing he doesn’t mention is that the increased use of ethanol comes at a cost as well. If it comes from corn ethanol, that means that we must either dramatically increase production of corn in the U.S., or pay significantly more for all products that depend on corn and other feed foods. If the ethanol comes from sugar, that means shifting from one imported fuel to another (since Brazil is the world’s leader in sugar ethanol production). And importantly, both sugar-based ethanol and corn-based ethanol are more damaging to the environment than gasoline. Despite the happy talk from Congress, and the optimistic assessment from manufacturers like GM who try to meet Washington mandates, there’s no free lunch.
