To hear some American politicians put it, the decline of the US auto industry went something like this: Detroit stuck to its knitting and made too many, gas guzzling trucks and SUVs. Toyota and Honda were ahead of the green curve and oil price spike and made hybrids. Detroit missed the boat and failed.
And so the presumption is that government has a good idea what Detroit needs to do: which is make more green cars.
Alas, it can be pretty difficult to time the market.
KTEN Oklahoma: There’s an SUV shortage at Bob Utter ford in Sherman, and most other dealerships across the nation. Utter says a year ago when gas prices climbed around $4 no one thought the market for SUV’s would recover.
“It was the biggest aberration of my 30 year career because all of a sudden we were right in the middle of the summer selling season, and we couldn’t sell trucks in Sherman, Texas and this is a big truck market.”
But the market has recovered, and dealers can’t keep up with demand. Utter says, “People are calling us and we can’t always get them one so it’s an odd situation to be in.”
When gas went up Utter says Ford (F) closed a truck plant and began assembling smaller cars. Now, he has plenty of those in stock, but what he can’t hold on to are Navigators, Expeditions and premium F-series trucks.
Whoops. Now this is nobody’s fault, really. Everyone thought $4 gas was the new reality, so in this case, Ford may have made just as bad of a decision as a politician, thinking its blindingly obvious that SUV production needed to cease, would’ve. But that’s not the point.
The point is that nothing’s blindingly obvious, and that a national campaign to push in one direction, on the assumption that it’s the only direction the market will go is silly.
What’s the answer? Probably leaner, more specialised and flexible car companies. Basically, exactly what Detroit currently isn’t. But with at least GM and Chrysler morphing into ungodly marriages of big auto, big labour and big government, do the words lean, specialised and flexible come to anyone’s mind?
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.