Little did I dream, when I sent last week’s column off to be published, that my assertion that some government mandates benefited the car-buying public — as in the fuel economy standards laid out for 2025 — would cause anyone to take exception. But I also said those mandates were critical to the long-term financial health of car companies. Automakers invariably fight to keep mandates from ever taking effect. They insist, as in the case of meeting higher fuel efficiency standards, that they are already spending billions doing just that. Besides, they say, they’re simply responding to the marketplace by making anything less fuel-efficient than it could be.My own personal editor kept trying to close that column with the starry-eyed assumption that such mandates would spur competition among the auto manufacturers to excel in greater fuel efficiency for their vehicles. She was wrong (but she inserted "starry-eyed" after reading this column).Further, a couple of e-mailers outright said I was wrong; competition and competition alone, they claimed, would have resolved this issue if the government had never acted. Yet no one could offer a single concrete example that’s actually happened in the past — where competition alone has driven amazing, substantive efficiencies that actually forced other car companies to match one manufacturer’s feat. Roll ‘Em into the Corral!Let’s look back. Toyota introduced its hybrid electric Prius in 1997; and, while the technology’s market has expanded, no one else has really rushed to duplicate mass numbers of that vehicle. True, Honda has had a few hybrid models, most recently the exceptional Accord hybrid, part of last week’s discussion. But to say that Honda executed this genius work because of competition created by a 17-year-old Prius is not true. Honda made this Accord now because it is concerned about the mileage mandates that will come into effect from here until 2025.Likewise, in a month or so BMW will introduce its first electric car, the outstanding i3. But it wasn’t created because Bavarian auto engineers were straining to compete against the best-selling Nissan Leaf. Nor is that the reason for the upcoming electric Kia Soul, Fiat’s new electric or anyone else’s. No, the fact is that car manufacturers are dealing with many states’ mandates requiring true zero-emissions vehicles, or the prospect of selling just enough electric cars to offset their other products that will fail to meet the higher fuel standards. This situation is no different from what, in the sixties and seventies, resulted after the first modern safety and emissions mandates were enacted.Safety, Low Emissions (Prices) Unpopular Few remember today, but Ford offered its Lifeguard safety package on a few 1956 models; it included safety belts, stronger door latches designed not to spring open in accidents, and padded dashes to protect the cabin’s occupants. It didn’t sell — and no other car company rushed in to outdo Ford in safety, either. By 1964 a dealer could (and many did) delete the seat belts in the new Mustang and get $14 credit on the vehicle’s invoice. In 1974, when General Motors introduced airbags in many of its larger sedans, there was no rush by Ford or Chrysler to match that accomplishment, which a competitive market might well have demanded. Indeed, as recently as 1989, a major Dallas insurance company, in the process of purchasing 800 company cars, favored the Chevy Lumina over the Ford Taurus because the Ford came with a driver’s side airbag; the Lumina didn’t, and therefore had an $800 price advantage. I know, because I worked on that transaction for the leasing company.So that 1956 Ford safety package didn’t sell well and went away. As did GM’s first attempt to convince the car-buying public that airbags might save lives in some front-end collisions. No one in my 20-some-odd years in the auto industry ever once asked what car they could buy to put out the least pollution. This in spite of the fact that back in the seventies everyone was disgusted with America’s increasingly high smog levels.Come to think of it, at the depth of the Second Energy Crisis, when both the high cost of gasoline and two recessions back to back were devastating the American car industry, Ronald Reagan mandated a limit on the number of vehicles that could be imported from Japan. If the only thing needed to stop that era’s movement toward high-quality Japanese automobiles was competition, no mandated limit should have been required. When Competition Doesn’t HelpOf course, it takes years to develop an all-new vehicle and bring it to market. Yet, apart from a few misguided attempts at doing so, Detroit never showed any real interest back then in building America’s own, better 1980 Honda Accord sedan. And it wouldn’t have been that hard, even in those days: Ford owned part of Mazda. GM owned part of Isuzu. And Chrysler had technology and engine licensing agreements with Mitsubishi. It saddens me to say so, but having been around the auto industry since late 1973, I know that competition had almost nothing to do with putting the modern safety features that we all demand today into automobiles. Auto companies had been fighting government mandates requiring such features since the 1930s. Competition played absolutely no part in the four-decade lowering of automobile emissions. And the same can be said for improved fuel efficiency. Doubt that? The 1992 Honda Civic VX got 57 miles to the gallon, highway; that engine won Japan’s Technology Award that year. So where were all the other automakers’ 57 mpg cars? Right: didn’t happen.Every last thing I just mentioned was a government mandate. And each new thing the auto companies and the public fought, at first — but each is now a feature the public demands in new cars or trucks. Again, competition had zip to do with their origins or implementation.Some Mandates Aren’t StupidCompetition does exist in the car market, but mainly in two areas: Incredible new styling and horsepower. We all love them both, and car companies fall all over themselves trying to outdo one another in those two aspects. Price matters, but less than you might believe. Because competition isn’t just about pricing but also describes the salesperson who is fanatically sold on the products he or she sells. That salesperson takes the time to explain every last safety feature, why modern vehicles get such better mileage than in the past, why emissions are way down and why the cost of maintaining vehicles to keep their emissions low has fallen. Did you know that emissions equipment on vehicles has an eight-year warranty? Most don’t. That was a mandate, too.Competition and sales are what made our economy great. But I’ve watched mandates put on the auto industry for decades; fought each and every time, they are still what made the products great. Today the worst car sold in Dallas Fort Worth is superior to the best automotive product sold in the late 70s, in mileage, safety and so on. But as for quality, fit, finish, handling and so on, competition didn’t solve those issues, either. It was more a survival instinct: Detroit almost failed and, having run out of excuses, got into the game in a big way. Less than one decade after sliding downhill financially, they now build world-class cars. Some of them are best in class, even against the best known imports. Then again, the free market didn’t save Detroit in their darkest days; the government did, along with all of those manufacturing jobs.It’s true that our government does some really stupid things. Just not always.
© Ed Wallace 2014 Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism. He hosts Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. E-mail: email@example.com, and read all of Ed’s work at www.insideautomotive.com.