Issue date: 5/4/05 Section: Opinion

The last two American carmakers reported major losses in first quarter earnings last month. The two, Ford and General Motors Corp., are learning the lesson Wal-Mart competitors learned long ago, which is when it comes down to the mighty dollar, people will always go with what costs less no matter who made it or where it came from.

Rising gasoline prices have put a pinch on most U.S. households, causing car buyers to search for more fuel-efficient vehicles, such as the hybrid models sold by Honda and Toyota, both of which get more than 45 miles per gallon.

Even without the introduction of the hybrids, Honda and Toyota would be well beyond American carmakers in terms of gasoline efficiency. Most Hondas and Toyotas get more than 30 mpg, unlike the gas-guzzlers made by Ford and GM.

Getting 28 mpg may seem great when compared to the 15 mpg some SUVs get, but it is still poor gas mileage when compared to the Honda and Toyota vehicles, some of which get more than 55mpg.

Americans do love big cars, which can be seen by the number of SUVs and Hummers on the road today, but Ford and GM need to diversify, just as they would to remain competitive in any other market.

Offering only vehicles that get poor gas mileage makes it harder for American carmakers to adjust when gas prices begin to go up. Gas prices reached more than $2.50 per gallon in California last month, but car sales didn't decrease overall. Sales just moved from some dealers to others.

The losses for Ford and GM mean losses for those that work for them as well, because American jobs will be lost; but to alleviate those losses, Ford and GM need to focus on improving gas mileage in their cars, even without the government forcing them to do so.

Environmentalists aren't able to single-handedly change the way carmakers do business, but even those who don't concern themselves much with the environment can see how rising gas prices are affecting their bank accounts. Money does a much better job of persuading people to change than the threat of global warming or the knowledge that oil sources will one day run out.

GM wants to appear that it's trying by introducing a new Chevy Silverado Hybrid last month, but this carmaker, with the biggest losses in the first quarter, has missed the point where hybrids are concerned. The Silverado Hybrid brought the Silverado's gas mileage up to a whopping 17mpg. And the price? This beauty costs $31,000, compared to $21,000 for a Prius or Civic hybrid.

Toyota and Honda, whose revenues were on the rise in the first quarter, have learned that better gas mileage and new technology does not equal major losses. Development and research on these vehicles may be expensive, but in the long run it spells out major sales increases. (Toyota's hybrid sales rose 13 percent in the first quarter.)

Americans overall have shown that they are not willing to buy cars that will cost them more in the long run, even if the cars are made in America, so it's time for Ford and GM to make a genuine effort to improve their vehicles' gas mileage and not merely try to fool their customers by introducing hybrid vehicles that still get horrible gas mileage.

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Rebecca Adler can be reached at opinion@statehornet.com

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