Ford, GM now green with envy

U.S. automakers are describing what amounts to the SUV tipping point. They say gasoline prices that raced past $4 a gallon have ended the era of the highway behemoth, with consumer preference irrevocably changed.

Maybe. Considering how wrong Detroit was for decades about the desire for an American-made, fuel-efficient car, the industry's record as a prognosticator is woefully suspect. After successfully resisting federally mandated fuel-efficiency standards just as the U.S. market steadily bought foreign vehicles with better mileage, a wrenching restructuring is under way.

Another round of truck and SUV plant closures has been announced, which will bring to 35 the number shut down by GM, Ford and Chrysler since 2005, according to industry analysts. Another 35 plants run by suppliers are shuttered or going dark.

Corporate average fuel-efficiency (CAFE) standards were introduced by Congress in 1975 after the first big oil shock. They not only stretched fuel economy and contributed to reductions in air pollution, they signaled a purposefulness about conservation that cut imports and sent a strong message. Prices that spiked came down. So did the U.S. driver's pursuit of higher mileage, CAFE opponents argued.

Except consumers found quality and savings in cars from abroad. As U.S. automakers contract — or implode — foreign automakers will build five more plants in this country. We are now the offshore outsource. Employment will go from 113,000 workers to 152,000 by 2011, according to news accounts.

Ford has its own riff on that theme. Plans are to move assembly of its economical Fiesta to Mexico, where it is intended to be Ford's car of choice for the international market. Mexico is very excited, as it has lost manufacturing jobs to China.

As the automakers talk of a return to profitability, the key words are North American results, with the new plants and major job hires in Mexico.

Gasoline was expensive at $2 and $3 a gallon. Consumers looking for a U.S. option found all the creativity going into trucks and monster SUVs.

Maybe the hybrid Chevy Volt will spark some excitement when it comes out 2011. The Toyota Prius will be celebrating its 10th anniversary of U.S. sales.