What the Big Three can do now to increase mpg

Detroit's Big Three, General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler have often been criticized for their bureaucracy, slow decision making, and, at times, outright inertia...even when conditions required bold, decisive action.

There's the joke about the five General Motors executives that go on a camping trip in the Great Midwest. Suddenly, they spot a bear 600 feet away and charging toward where they're seated at the camp site.

Each executive has a rifle and is ready to shoot the bear to defend the campers, and the senior executive says: "Allright, Executives, ready, aim, aim, aim, aim, aim, aim, aim, aim, aim..."
But seriously, Detroit, home to the industry that transformed a culture and helped define life in the modern world itself, has achieved much in its storied history, and has the potential to achieve even more astonishing breakthroughs in the years and decades ahead.

Still, Detroit's recent performance record is not good, and the Big Three "have some explaining to do," to borrow a phrase, particularly regarding fuel economy. For those who don't follow the auto sector closely, the U.S.'s fuel economy, the miles per gallon of the domestic fleet, has more or less remained flat for about a decade. This is despite the increase in the number of adults driving, the massive amounts of additional, imported oil needed to meet this demand, and the added CO2's impact on the atmosphere.

Critics could expand on the lack of a viable hybrid (Japan is substantially ahead of Detroit regarding hybrid technology deployment), or a next-generation electric or fuel cell car that constitutes a game changer. But we'll leave aside those critiques to concentrate not on big-change, but small-change: there are actions Detroit can take right now to improve vehicle fuel economy.

1. Weight - The Big Three gets a low mark here. The domestic automakers have made some strides but much more weight reduction is needed through the use of aluminum, composites and related lighter materials, and via modular design. There are too many domestic model cars that are 3400 lbs. today that were 3400 lbs.10 years ago, or even (incredibly) 3,100 lbs. ten years ago. Detroit should have as a goal reducing the weight of each vehicle by 30% in five years. Airlines continually find ways to reduce weight because it lowers their operating costs; so should Detroit.

2. Transmissions - Here, the Big Three scores slightly higher. They've rolled out 6-speed and other variable-speed transmissions, but more investment is needed to apply the new technologies fleet-wide.

3. Combustion - Again, Detroit receives a modest grade regarding more-efficient fuel burning technologies, but the sense is that the Big Three could roll-out technologies quicker. Cylinder deactivation / variable displacement has been around for decades, but Detroit only recently started re-incorporating it as a fuel saving technique. Detroit needs to make up for lost time and deploy a deac tech that will save even more fuel in stop-and-go traffic / city traffic. Further, improvements to air conditioning systems would also cut fuel consumption.

4. Aerodynamics - On this point the Big Three receive their highest grade, but again more must be done. Today's cars, SUVs, and trucks are more aerodynamic than their predecessors, but they need to made even more sleek to lower the coefficient of drag. Given the amount interstate and secondary highway driving Americans undertake, aerodynamic improvements will yield substantial fuel savings.

Why hasn't Detroit made even greater progress in the above areas? Various reasons are cited: consumer preference and cost are frequently listed, but they're refuted by the fact that Americans are seeking these advances in foreign-built vehicles, who often have comparable manufacturing costs. If cost is a major factor, Detroit must find more ways to leverage its economies of scale to develop and deploy fuel-saving technologies quicker.

Still, the main point here is that rather than wait for the supercar with that industry-changing technology, the Big Three can deploy known technologies to substantially improve fuel economy in the immediate years ahead.

And given the current long-term trends regarding oil's use, price and its impact on the U.S. economy and the environment, not to mention individual budgets, that seems like the prudent road to take.
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