Word: detroits
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Dates: during 1970-1979
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...Detroit has been fighting a losing battle for a decade against the safety and pollution regulations. According to estimates by GM, Ford and Chrysler, the cost of meeting these standards has already added between $499 and $600 to the price of a car. (The Bureau of Labor Statistics, however, puts the cost at $415.) Company representatives are pressing Congress for a five-year delay in the stiff Government pollution-control standards now scheduled to take effect in 1977. The automakers contend that, instead of being forced to spend money on devices that reduce emissions, they should be allowed to develop...
Bumper Battle. The industry's credibility has not always been high when it comes to complaints about environmental controls. For example, Detroit long opposed use of the emission-reducing catalytic converter, a device fixed to the exhaust pipe underneath the car. These converters are installed in the 1975 models, and GM, for one, praises their virtues. With the converter, engines can be tuned up to give top fuel efficiency instead of being wastefully geared down to reduce emissions, as they had been for several years. The result, according to tests made by the Environmental Protection Agency: the new cars...
...most part, however, Detroit doggedly continued its emphasis on size and power; over the past 20 years the standard Chevrolet has grown more than 2 ft. in length, gained more than 1,000 Ibs., and almost doubled its horsepower. One obvious reason for the companies' reluctance to change: except for the expense of materials, producing a high-priced standard-size car costs about the same as making a less profitable small...
Events soon forced a change in the industry's position. The popularity of small cars hit a peak in January 1974, accounting for about 52% of sales amid the oil embargo and widespread jitters about the price and availability of gasoline. Detroit finally got the message and rushed to switch to the production of more moderate-size vehicles-but not fast enough to satisfy immediate demand. By summer, when production was up, the urgency was out of the energy crisis...
...that point, Detroit made a miscalculation. The auto executives found themselves struggling with soaring material costs for everything from steel to plastics just at a time when sales of big, high-profit cars were lagging. They decided to step up production of small cars and ride on their popularity. But partly to keep the industry's rate of return up, they moved to boost the profit margin on the compacts and subcompacts. Small cars were wrapped in expensive, highly profitable equipment that once was optional-special trim packages, power seats and windows-substantially raising the base price. The auto...