American automakers shift from bad to worse

A miserable year for U.S. automakers General Motors and Ford Motor looks set to turn even worse in the aftermath of Hurricane Katrina. Sales of Detroit's most profitable models, full-sized sport utility vehicles, were already falling earlier this year. But a spike in gasoline prices to more than $3 per gallon after the storm threatens a sea change in the way American drivers make vehicle purchase decisions, ending a love affair with gas-guzzling SUVs that dates back to the late 1980s.

U.S. carmakers' heavy dependence on big SUVs amid stalling demand was a factor cited by the Standard & Poor's ratings agency when it downgraded the debt of GM and Ford to high-yield, or "junk," status in May. The auto giants, weakened by their seeming inability to sell enough cars without the use of profit-eroding discounts, have also been struggling under the burden of soaring costs for everything from health care to raw materials.

Lee Iacocca, who led Ford in the 1970s and is credited with saving Chrysler from extinction in the 1980s, summed up the grim mood in Detroit when he visited his adopted hometown last week and chided its automakers for lagging the Japanese in developing fuel-sipping hybrids. "They should get off their asses and build more hybrids," he told The Detroit News. "Something's got to happen in this town to turn it around, or we're all going down the tubes," Iacocca said.

Comments:

Hello,

I am a Singaporean PR from the US who is very interested in Peak Oil issues and happened to come across your blog.

I've recently purchased property here in the Lion Nation and I am seeking information about the outlook of the Singaporean government regarding Peak Oil, diminishing global energy supplies and contingency plans for an oil and/or economic shock due to energy depletion.

Living in a city state with no natural resources and little agrarian capacity seems to me a tenuous situation and I would be keen to know if the government has anything to say to this or has indicated any perparations for the seemingly inevitable.

Nice to find your site and I'll keep coming back.

Posted by Brian Johnsen on September 20, 2005 at 04:51 PM SGT #

Hi there,

Thanks for your comments.

Some time back, I submitted a query to the government feedback department on this very topic. Their reply has been posted on my previous blog address. The site may be down from time to time, see Google's cached archive copy if that's the case.

Here's the URL :
Peak Oil - government feedback reply (archive)

Posted by lowem on September 21, 2005 at 08:07 AM SGT #