ach January, Detroit kicks off the new year with the North American International Auto Show, a catwalk of automotive seduction. New cars don't just jump through hoops; they drive through plate-glass windows and veils of smoke and fire, are lowered -- sometimes dropped -- from a high ceiling, and are tumbled by artificial earthquakes. Chief executives sit on lily pads; a minivan soars overhead.
It's not until spring, however, that the industry gets under the hood, at the World Congress of the Society of Automotive Engineers. In the concrete cavern of the Cobo Center in downtown Detroit, hundreds of technologies are unveiled and debated, hawked and hustled. In conference rooms near the main hall, more than 2,000 technical sessions discuss the merits of friction stir welding and structural foam, and even a hydrogen economy.
But it is on the show floor where the future beckons you to touch, where the next generation vies for geek credibility and market buzz. For those in the business of making cars, everything needed is here, from thumbnail sensors to robotic arms. If the automobile is the gleaming totem of the American Dream, then spending time at the World Congress is like going backstage at Dreamland, deep into the sandman's garage.
It's no wonder we love cars. Henry Ford didn't invent the automobile; he invented modern manufacturing, and with it a new middle class. The ripple effects created a century of power and prosperity for many Americans. Faults aside, the automobile is truly a wonder of the world, a sublime testament to human ingenuity and know-how. But just as the twentieth century cannot be credibly imagined without cars, the twenty-first century cannot be realistically conceived without their reinvention. Even top engineers at the Big Three auto companies -- General Motors, Ford, and DaimlerChrysler -- seem to know that cars cannot continue to squander the world's last reserves of fossil fuels.
Americans now burn a quarter of the world's oil -- 40 percent of this in passenger vehicles. It's a thirst with snowballing impacts on global climate, our economy, and national security. Cars, SUVs, and light trucks consume 8.7 million barrels of oil a day and are the fastest-growing source of greenhouse gases. We urgently need fuel-efficient cars, yet carmakers seem to be driving in reverse. Ford's world-changing Model T got about 25 miles to a gallon of gas. In 2002, all of Ford's models in total averaged 24.3 miles per gallon, while the entire fleet of American-made cars averaged 24.6 miles per gallon.
Like junkies hooked on SUV profits, Detroit's automakers continue to fight stronger fuel economy standards. Meanwhile, Japanese policymakers have bet on hybrids, and in Europe a generation of cleaner, more fuel-efficient diesel engines accounts for half of new car sales. Toyota's trendy hybrid, the Prius, has given the company a head start not only in hybrid technology but in navigating new business realities. "Toyota is lapping the field," says Roland Hwang, vehicles policy director for the Natural Resources Defense Council (NRDC). "It must be scary for Detroit to think about how many real-world miles these guys have on their technology."
In other words, change is coming, though unless U.S. carmakers adapt it will not be at the wheel of a Ford or a Chevy. But even if these carmakers want to shift gears, it's difficult to know whether they're up to the task. The industry clearly is ailing. G.M. shows a profit only thanks to its home finance division. Ford is recovering from near bankruptcy. Chrysler has been swallowed by Mercedes -- its own engineers joke that in German, DaimlerChrysler is pronounced with a silent Chrysler. Because all three have older plants and older workers, they give up at least a $2,000 advantage to their foreign competitors on the cost of each new car. Health care and pension costs are strangling the U.S. automakers, and depressed stock prices reduce their maneuvering room further still. Globalization has also taken its toll. In a little over three years, from 2000 to 2003, the United States lost one out of six factory jobs. That's 2.8 million people nationwide, and among the worst hit were autoworkers in Michigan and Ohio.
In 1999, Bill Ford Jr. raised the hopes of environmentalists -- briefly -- when as the newly elected chairman of the board he pulled his family's company from the Global Climate Coalition, a flat-earth cartel of corporations that rail against climate change science. The company then issued a report acknowledging that SUVs cause serious environmental problems and promising, among other things, a 25 percent improvement in SUV fuel economy by 2005. But even as Ford seemed to be positioning his company for change, the tires, literally, started coming off its popular and highly profitable Explorer SUVs. A series of deadly rollover accidents resulted in severe setbacks to its finances and public image. Then 9/11 sent the automotive economy into a tailspin, a problem compounded, for Ford at least, by G.M.'s decision to heavily discount its cars to keep the assembly lines rolling. Whatever the reasons, Bill Ford's promises have gone unmet, causing him to lose favor among environmentalists who initially gave him the benefit of the doubt.
Despite a dismaying lack of progress, engineers and even top executives across the industry speak routinely of "taking the automobile out of the environmental equation." U.S. automakers have invested billions of dollars in new fuel-efficient technologies -- hybrid cars, hydrogen fuel cells, clean diesel. Over the next year, Ford plans to sell 20,000 Hybrid Escape SUVs, its first hybrid vehicle. But put that into perspective. This number amounts to little more than a niche market -- "the environmentally conscious customer," as one Ford executive put it -- from which the company hopes to gain a "halo effect." Even as Ford and G.M. spend millions on advertisements claiming that they are turning over a new green leaf, these decidedly small gestures are dwarfed by the industry's enormous stake in selling gas-guzzling internal combustion engines, which increase our dependence on foreign oil and degrade the environment.
All the hype about the "hydrogen future" ("the destination is the hydrogen economy," intones G.M. in one of its full-page ads) and the warm, fuzzy feelings generated by the novelty of hybrid cars can sometimes obscure the fact that the technological wherewithal for manufacturing super-fuel-efficient cars has existed for many years. The hitch has been getting them to market.