Can U.S. automakers build a small car in this country? GM thinks so.
Friday, January 21, 2011; 11:55 PM
This summer, a General Motors plant in Orion, Mich., will begin cranking out some very small cars.
The Chevrolet Sonics, as they will be known, are by themselves hardly a breakthrough. There are tens of thousands of cars this tiny on the road - among them the Honda Fit, the Toyota Yaris and the Ford Fiesta.
What will set the Sonic apart from its rivals and make it one of the most closely watched experiments in the industry, however, is that it will be the smallest car currently mass-produced in the United States.
Ever since an invasion decades ago of small, cheap cars from overseas set in motion the near-death spiral of the Detroit Three, the task of building an appealing small car has beguiled the domestic auto industry, workers and management alike. Or, as then-Sen. Barack Obama asked, shortly after his election as president, about the U.S. companies, "Why can't they make a Corolla?"
Conventional wisdom has long held that U.S. wages were too high to make small cars profitably in the country. Indeed, for years manufacturers made their money on big trucks and sedans. The little guys just didn't matter.
The Sonic is the industry's rebuttal, a fuel-efficient subcompact that General Motors is putting up against fierce competition. For the Obama administration, moreover, which rescued General Motors and declared the manufacture of a small car here a stipulation of the bailout, its emergence is a measure of vindication.
"It's a huge breakthrough," said Bob King, president of the United Auto Workers, which made significant wage concessions to land the Sonic deal. "It's important to show we can build any size car in the U.S."
Steve Girsky, GM's vice chairman for business strategy, acknowledges that the company could have built the Sonic in Mexico where, as it happens, Ford makes the equally small Fiesta.
"We wanted to make a run at making a small car here," Girsky said at the Detroit auto show.
But if they build them, will Americans buy them?
The idea of making a small, fuel-efficient vehicle here is politically appealing, but it might not square with the fickle tastes of consumers. Whether they'll jump on board remains an open question and, critics say, could highlight the risks of the government's ownership in GM following its bailout, which gave the United States a 61 percent stake, potentially pitting commercial motives against political ones.
Consumer tastes for large or small cars fluctuate with oil prices. In May 2008, when gas prices across the country were nearing peaks, the best-selling car in the United States was the Honda Civic. But prices have subsided, and along with them, consumer interest in small cars. U.S. enthusiasm for small cars lags well behind that of Europeans, who long ago adapted to staggering fuel prices.