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It's Not Easy Being Green—Just Ask GM
GM based its strategy on deliverng cars that consumers wanted. And that's a bad thing?
Karen Auguston Field, Chief Editor -- Design News, August 14, 2005
I usually find Thomas Friedman's op-ed pieces in the New York Times to be thoughtful and enlightening. But after reading his June 17th editorial, lambasting GM for basing its business strategy on "building gas-guzzling cars, including the idiot Hummer," I think Friedman should go back to reporting on the Middle East.
Friedman should recognize that the very policies that he criticizes were not somehow conceived of in a vacuum by GM's senior management. Rather, they were a response to building vehicles that reflected exactly what consumers were asking for. Had GM elected to pursue a strategy of building dinky, fuel-efficient vehicles when the market was clamoring for large, gas-guzzling SUVs, its share holders surely would have been screaming bloody murder. And the company would likely be in worse shape than it is now.
The fact that these desires are shortsighted and unsustainable is unfortunate, and we are likely to be suffering the consequences of our choices for decades to come. But they are hardly the sole fault of GM. If Toyota were in GM's place, one wonders if the Japanese automaker (a company that Freidman actually would like to see take over GM) would behave any different.
We expect companies to respond to markets, not reshape them. Just consider the auto industry's efforts to sell more environmentally conscious vehicles in the 1990s.
Design News published a major cover story on electric vehicle technology in 1998. Reporting that automakers had spent more than a billion dollars to develop battery-powered cars, the article went on to say that while auto execs were publicly expressing optimism, automotive engineers were saying privately that they did not have a clue when the electric vehicle would be practical or economically competitive.
Nor did consumers want them. Despite a massive investment in the EV1, for example, GM had delivered just 432 of them in the first two years they tried to sell them. After years of effort, the world's biggest automakers had combined to sell or lease less than 1,500 electric vehicles in total. Marty D. Friedman, strategy and planning manager for alternate fuel vehicles at Ford—who itself had sold a paltry 76 Ford Ranger EVs by 1998—summed things up this way: "You just can't wish technology into existence, and you can't regulate it into existence, either."
As much as Friedman might wish it were so, markets don't magically become environmentally conscious. People do. And until that happens, criticizing the firms that are just giving us what we want is pointless.
Do you have thoughts about this article? Write to me at kfield@reedbusiness.com.
