Who's to blame for Detroit's sagging profits? Detroit

click on the cartoon for the punchline

Yesterday, the American Council for an Energy-Efficient Economy released its list of greenest cars, and not a single domestic automaker's vehicle was on the list. With the overall trend towards more fuel-efficient cars, perhaps this list can help us understand the reasons for Detroit's poor fiscal reports. Daniel Griswold, of the Cato Institute, says that the reason the U.S. automakers are doing so poorly is because of a dilemma they produced themselves.

The title of Griswold's piece is " It's not the yen, it's the mileage," but he only briefly mentions mileage as a factor in the gains the Japanese automakers have made in recent years. Instead, he says, Detroit has tried to scream fire by pointing out yen "manipulation" and "unfair" competition by the Japanese instead of making cars customers want to buy (now that SUVs and other gas guzzlers have seriously lost their shine) and bringing their factories up to par with those run by the "import" companies. And even the term "import" is increasingly inaccurate, with many Toyotas and Hondas built in America now.

This cartoon by Justin Bilicki kind of encapsulates this entire message.

Reader Dan Litchfield sent in the link to this story over a week ago, and it took me a while to get around to writing about this. There's no real hurry, though, because these problems will be with us for quite a while yet.

[Source: L.A. Times, thanks to Dan Litchfield]

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