Thomas Friedman: GM, Again

Great comeback, Tom.

G.M. – Again

Published: June 14, 2006

On May 31 I wrote a column accusing General Motors of acting irresponsibly by offering unlimited gasoline at $1.99 a gallon for one year to anyone who buys certain of its midsize sedans, big S.U.V.’s or gas-guzzling Hummers in California or Florida. At a time when we are at war in the Middle East, with an enemy who is indirectly financed by our energy purchases, it seems to me that every American, and every American company, has an obligation to reduce oil consumption. No one should be making a huge gas-guzzling Hummer, and no one should be driving one, and no one — certainly not G.M. — should be subsidizing people to drive them.

After the May 31 column appeared, G.M.’s vice president for global communications, Steven J. Harris, and his colleagues denounced my argument in a formal statement and on G.M.’s corporate blog. This is an important issue, so let me respond to their response.

To begin with, I would much prefer to see G.M. thriving and growing American jobs — not selling itself off, limb by limb. But as long as G.M. is giving away $1.99 gasoline for its gas guzzlers, I will be a harsh critic. Pardon me if — at a time when China is imposing higher mileage standards than America — I don’t want to join the many congressmen and senators in drinking G.M.’s Kool-Aid and not demanding that it become the most fuel-efficient automaker in the world. If more people in Washington insisted that G.M. focus on building cars that could compete in a world of $3.99 gasoline, rather than creating an artificial universe of $1.99 gasoline, G.M. would not be worrying about bankruptcy today.

G.M. says that the cars chosen for its $1.99 gas giveaway were chosen because of “their outstanding fuel economy and great consumer appeal.” It also says that G.M. makes more cars that get an E.P.A.-estimated 30 miles per gallon on the highway than any other company.

Fact: G.M. also sells more cars that get 9 to 11 m.p.g. — the Hummer — than any other company. And even though G.M. justified the $1.99 program as giving consumers a chance to drive some of its most fuel-efficient cars, it did not include its best-selling, most fuel-efficient model, the Chevy Aveo (35 m.p.g. highway), in the program, but did include seven gas-guzzling trucks. G.M. still does not have a hybrid sedan on the market (one is due this summer) — nine years after Toyota introduced the 45-m.p.g. Prius hybrid, which G.M. scoffed at at the time.

Stephanie Salter, a columnist writing in the Terre Haute Tribune-Star, did a spoof about G.M.’s $1.99 gas giveaway by imagining what other less-than-healthy consumer companies might now do: “Today R.J. Reynolds Corp. announced a new ‘smoke more/pay less’ instant rebate program for most of its cigarette brands. Time-dated coupons will be included in every pack of RJR cigarettes. Tobacco consumers who collect 10 same-brand coupons in five days can redeem them for a pack costing $1. The only brands not covered by the coupon program are the company’s cigarettes with very low tar and nicotine content.”

Next, G.M.’s Harris asked: “How is offering a gas card that may be worth $1,000 any different or more sinister than the $2,000 cash rebate that Toyota’s offering right now nationwide on its full-size S.U.V., the Sequoia?”

Fact: Reading that question you’d think that G.M. was giving away cheap gas instead of big S.U.V. rebates. The truth: We called G.M. dealers in California who said that under the new program they were authorized to offer $5,000 discounts on the 2006 Suburban and Tahoe S.U.V.’s — which are like the Sequoia — in addition to G.M.’s unlimited $1.99 gas for a year. I guess Mr. Harris just forgot that.

Yes, Toyota makes trucks and S.U.V.’s, just like G.M. I am not against either. Some people need them, others enjoy them. But I don’t think we should be subsidizing gasoline so people who don’t need them will buy them or buy the most gas-guzzling versions. G.M. says its full-size S.U.V.’s get better mileage than Toyota’s. All I know is that Consumer Reports rates all size S.U.V.’s for fuel efficiency, reliability and performance. Toyota and Honda S.U.V.’s are its top picks in every size category.

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