Automakers' opaque future
America's 20th-century automobile industry typified the Old Economy, of which General Motors was emblematic. As was its bankruptcy. Today, GM's CEO Mary Barra is wagering that the industry soon will be manufacturing New Economy products incorporating technologies that will entice buyers whose sensibilities and expectations have been shaped by their smartphones, which arrived just 10 years ago.
GM's electric self-starter, which replaced hand cranks, arrived in 1912. Today, Cadillac offers hands-free driving, with advanced GPS mapping. Barra is attempting an audacious balance between present consumers' demands and radically different future demands. Or, more accurately, a future that governments, hostile to consumer sovereignty, intend to dictate.
China has announced, as have Britain and France, plans to ban, at an undetermined date, sales of vehicles powered by fossil fuels. (Electric vehicles will be powered mostly by fossil-fuel-generated electricity.) In Shanghai in mid-September, Barra dissented: “I think it works best when, instead of mandating, consumers, not government dictates, should decide how cars are powered.”
But governments, and not just dictatorships, like to dictate, and companies must accommodate.
One of Barra's executives speaks of GM “driving increased usage and acceptance of electric vehicles,” but governments are at the wheel. Without subventions from Washington, Tesla's market capitalization never would have even briefly exceeded GM's.
Barra foresees a fast-unfolding future of “zero crashes” (salvation through software), “zero emissions” (zero from tailpipes, much from smokestacks in an all-electric future) and “zero congestion” (with more ride-hailing services and car-sharing fleets, less individual car ownership and less urban land devoted to parking lots).
Ford, too, is anticipating a future replete with electric, semi-autonomous, driverless and shared cars: Two years ago, it announced a $4.5 billion investment in electric vehicles. But to pay for this speculation (electrics are 1 percent of U.S. car sales, despite tax incentives), Ford is diverting $7 billion from cars to vehicles for which there actually is demand — SUVs and trucks.
“This is a long-lead-time business,” says Barra, as she tries to develop products for a public that increasingly can work and shop without leaving home. The torrid romance that was America's car culture has cooled, the sedan is an endangered species, and car companies are preparing for a future in which the crucial metric is not the number of vehicles sold to consumers but the number of miles traveled by consumers.
Barra, 55, whose father was a Pontiac die-maker for 39 years, remembers when auto dealers covered showroom windows with paper to build excitement for the first glimpses of new models. She is banking on a more sophisticated kind of excitement for smartcars. They will be designed for customers who in 2006 did not know that soon they would not be able to imagine living without the smartphones that in 2006 they could not imagine.
George F. Will is a columnist for Newsweek and The Washington Post.