As if the global financial crisis and squeeze on credit was not enough, a snowstorm swept through Detroit to herald the start of the North American Motor Show, further dampening spirits.
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But beleaguered executives from Detroit’s Big Three car makers did their best to ignore the world that was collapsing around them with the message that the future is bright – the future is green.
General Motors, Ford and Chrysler unveiled a raft of future products based on fuel efficient hybrids to full electric vehicles. Well, they sort of have to if they are going to benefit from bail out funds being offered by the US Government.
The snowstorm that is battering Detroit seems a fitting parallel to the economic blizzard that has swept through the US car industry in the past year.
General Motors and Ford did their best to ignore the financial fall out going on around them, wheeling in hundreds of employees to whoop and holler through their press conferences.
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By GlobalDataGM chairman and chief executive Rick Wagoner said: “The future is fine. Today is a new beginning, we are restructuring, developing new models and expanding our fuel efficient vehicles. We will move forward with great products.”
While sales of big SUVs and pick-ups dropped through the floor during the summer as the oil price passed $140 a barrel, bizarrely there are signs that these models have started to sell again as the price has since dipped back to $40 a barrel and price at the pumps is back down to around $1.40 a gallon.
“The US government should have left the price of gas at $3 a gallon and use the extra revenue to fund research into new technologies, I’ll never understand,” one exasperated industry executive told headlineauto.
Ford even picked up the US Truck of the Year title with its big F150 Pick-up. Some things never change, it seems.
At least president and CEO Alan Mulally admitted that 2009 “will be a challenging year”.
He added: “We will leverage our global assets with great products and a strong business plan. In Europe we can point to the success of new small cars like the Fiesta and Ka.”
Ford’s plan is to bring “affordable fuel economy” to the global market. The Fiesta will be introduced into the US in 2010 with a small number of lucky punters being given the opportunity to test drive the European version this summer to gain feedback.
Chairman Bill Ford Junior claimed he had “never been more excited” about the future which will bring four new electric or hybrid vehicles in the next four years.
Chrysler’s vice chairman Jim Press took a more light-hearted approach. “The Government loans have come just in time. It’s like a college kid who has discovered in the fourth year that their parents have re-filled their bank account.”
He said that 2008 had not been that bad. In fact in the first half sales were up and production was 7,000 vehicles ahead of schedule. Then it all went wrong in the second half.
He added: “But the results of the first half give us confidence for the future. We have slashed fleet sales to improve residual values, eliminated four models and reduced dealer inventory by 12 percent.”
He does not see any big sales increase this year however adding that he expects the US market to stay at around 13 million sales, down from 16 million in 2007.
At least the hundreds of employees wheeled in by GM and Ford made the show hall look busy at one of the quietest Detroit events in memory. There were a few more outside in the cold although they were protesting over job cuts.
The show hall was also quieter because of some notable absentees including Porsche, Ferrari, Land Rover and Rolls-Royce who decided to save money and stay away this year. Japanese companies Nissan, Infiniti, Mitsubishi and Suzuki also withdrew while Honda cancelled its press conference.
There was also an absence of show-biz style unveils and even the press suffered. Many manufacturers cancelled plans to run trips to the show and Chrysler’s traditional Firehouse party which fed and watered journos into the night was called off.
While the credit crunch affects the whole nation, Motor City’s home state of Michigan has suffered more than most. Cash shortages in Detroit have seen public amenities and even schools close while the unemployment rate has rocketed into double-digit figures, well above the 7.2 percent US average.
In the past five years the state has seen half a million jobs disappear and a further 100,000 jobs are expected to go this year. according to a forecast by the University of Michigan.
It could be worse, the Centre for Automotive Research has said that if the Big Three car makers fail then a whole supply chain will be affected with the loss of 3 million jobs.
