[hytem]

Another one of those tabloid headlines I saw this morning on msn.com, and had to comment on.

I hadn't realized that GM was "killed." Considering the world-wide distribution powers GM and Ford both have, I doubt either is in that kind of trouble. But they are hurting--and they always bleed more when gas prices go up, as they are doing right now. The USA is a consumption country, and that means gas consumption has been encouraged--with the deliberate demise of public transportation post WWII and the construction of the elaborate highway system which encouraged a large fleet of cars and trucks.

So, what happened to GM and Ford? Well, they weren't prepared for the first gas crunch in the 70s, and the Japanese began to cut a niche in the market with better gas mileage cars and small trucks. And then the American car companies didn't listen to Demmings and his preachings about quality--while the Japanese did--and suddenly the more reliable cars were coming out of Japan.

The latest nail in the coffin, so to speak, has come with the government's failure to put mpg restictions on SUVs and small trucks--especially those used non-commercially. Without such restrictions, the American companies did not place a priority on fuel efficiency for such vehicles, and, once again, the Japanese --always more in tune with the market--gained the advantage.

It is the gas-guzzling SUVs and small trucks in almost every driveway that are fueling the high cost of gas right now--make no mistake. It's about high demand.

So, are GM and Ford dead? Doubt it. But the government will have to get off its duff and get tougher with higher mpg standards. And the American car companies have to become more market responsive. All this business about carbon emissions may be an opportunity for them to leapfrog the market with hybrid or battery cars and trucks. Carpe diem or die.