Detroit Bets Its Future on Washington

Boston Consulting Group found that extended-range, all-electric vehicles like the Volt will account for no more than 5% of the North American market by 2020.

Published: 24-Jan-2009

The curtain comes down this week on the 2009 Detroit International Auto Show -- and with it likely on the American auto industry as we know it. This might turn out to be a watershed year when some of the industry's big players permanently shift gears from serving ordinary car buyers to serving the grand designs of central planners.

The only other time that the industry subordinated its customers to the government was World War II. Then it had no choice. This time the industry, particularly General Motors, is desperately "retooling" itself to make Washington's environmental and industrial policy priorities a vital part of its business revival plan.

By accepting government welfare, GM rejected the chance to transform itself into a worthy competitor to foreign manufacturers. That would have required making too many hard decisions, such as confronting unions, cutting legacy costs, and slashing dealerships under a Chapter 11 filing.

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