DETROIT AUTO SHOW -- 1998

Makers fear truck backlash

Originally published: Jan. 12, 1998

Neither glowing profit reports nor the glamour of the Detroit auto show have dispelled a growing malady among automakers. It is Truck Anxiety, the fear that their biggest moneymakers are threatened by mounting criticism.

It may be only psychosomatic, inspired by a stream of critical articles in The New York Times. Or it could be a symptom of bigger ills ahead for makers of popular pickups, vans and sport-utilities.

Privately, many auto executives have been asking one another if they think trucks could become social pariahs. Publicly, the industry position is two-pronged:

1. Contending there is really no problem, and customers are merely exercising their free choice to buy trucks.

2. Announcing steps to blunt the criticism.

“Did you see our sales for December?’’ asked Chrysler Corp. Chairman Robert Eaton. “Trucks were up 8 percent. That doesn't sound like a backlash to me. That's still the hottest area of the market.”

Said Richard Parry-Jones, Ford Motor Co. group vice president of product development: “Look at the relative number of people criticizing them vs. buying them. The consumer is emphatically voting with their wallet. They like them.”

Still, Ford and other automakers used the North American International Auto Show to make announcements aimed at overcoming complaints about trucks, especially their impact on the environment.

Ford said it would cut by more than half the smog-causing pollutants from all four of its high-selling sport-utilities and the Windstar minivan in 1999. The trucks would beat California requirements for light trucks and pollute less than passenger cars are permitted to pollute under current federal rules.

Chrysler officials, in a much more low-key manner, said they would make advanced pollution-cutting equipment available across their line by the 2001 model year. The result would be Dodge and Jeep trucks that could meet standards similar to California's.

In addition, Audi, Buick, Lexus and Subaru unveiled vehicles, both concepts and new production models, that they say would be efficient alternatives to traditional truck-based sport-utilities.

“I think, from a regulatory standpoint, there will be a major push to have light trucks meet car standards. The environmentalists have staked that out as a goal,” said Philip Hutchinson, president of the Association of International Automobile Manufacturers in Washington, D.C.

Trucks reached 45.3 percent of the U.S. light-vehicle market in 1997, up from 43.7 percent in 1996 and 36.3 percent in 1992. They account for most of the profit earned by the Big 3. And companies, including the Japanese, are adding to their truck lineups, not cutting them.

INCREASING PRESSURE

The principal threats, as seen by a knowledgeable industry Washington lobbyist, include:

• Studies by federal regulators and insurance companies seeking to determine if trucks, especially SUVs, pose a higher risk of rolling over or harming smaller vehicles and their occupants in a crash.

• Moves by the California Air Resources Board to require all trucks up to 7,000 pounds, including pickups, vans and sport-utilities, to meet the same pollution standards as cars.

• Reports by some opinion-shaping mass media, especially The New York Times, portraying trucks as socially detrimental. Two examples from reporter Keith Bradsher's reports in the Times:

1. “LICENSE TO POLLUTE: A special report; light trucks increase profits but foul air more than cars” (the headings on a 5,736-word report published Nov. 30).

2. “LIGHT TRUCKS, HEAVY RISK: A special report; a deadly highway mismatch ignored” (the words atop a 3,617-word report published Sept. 24).

(Glenn Kramon, business editor of the Times, said the paper began looking at truck safety and pollution years ago and did not have preconceptions. “The implication from the auto industry that there is a vendetta -- well, if you look at the body of Keith Bradsher's work, it is a remarkably well-balanced body of work,’’ Kramon said.)

The global-warming treaty negotiated last month in Kyoto, Japan. Even if most pollutants are eliminated, trucks still burn more fuel than cars, and that creates more carbon dioxide.

“Bottom line, a lot of people are focusing” on the critical attention being given to trucks but aren't sure if it will affect the market, said the lobbyist, who asked not to be identified.

Although the climate-change treaty will not be submitted to the Senate for ratification soon, it provides fresh impetus for environmental groups and federal officials who want to raise corporate average fuel economy. The current requirements are 27.2 mpg for cars and 20.7 for trucks.

“It's clear that CAFE will need to be part of the solution,’’ said Karen Kirchgasser, aide to Sen. Richard Bryan, D-Nev. In the past, he sponsored bills to raise CAFE standards on both cars and trucks by 20 percent in five years and 40 percent in 10 years. Daniel Becker, Washington-based climate-change director for the Sierra Club, said he applauds Ford's impending cleanup of its light trucks. But he says some company executives are overselling it as the answer to environmental problems.

SENDING A MESSAGE

Becker said the “green theme” at the Detroit show was a transparent industry attempt to send a message: “Leave it to us. Don't let the big foot of government tread on us. We'll take care of it ourselves.”

Diane Steed, the former federal auto safety chief who is president of the industry-backed Coalition for Vehicle Choice, said government should not rush to mandate increased fuel economy. The result, she said, would be higher vehicle prices.

Gerd Klauss, Audi AG vice president in charge of Audi of America, contended that the first threat to profitability of sport-utilities is a saturated product market. But, he added, “regulators might be as tenacious as the competition. It will get tough in there.’’

Audi last week was among those touting all-wheel-drive wagons as more efficient and comfortable than sport-utilities.

Susan Jacobs, auto analyst and president of Jacobs Automotive in Rutherford, N.J., agreed a trend may be developing: “I don't think environmental attitudes will put people out of trucks. It may induce people to move from truck-based to car-based chassis, but people will continue to drive trucklike vehicles because they want the versatility and styling statement.”

Thomas Elliott, executive vice president of American Honda Motor Co., said that “as the SUV gets more carlike and car-based, for Honda that's closer to our strength of fuel efficiency and economy.

“I don't see a backlash (against trucks) unless there's a fuel crisis. But realistically, I don't see it happening,” he said.

Ford Division sold 2,080,158 light trucks in 1997, a record, and more than half a million more than any other division. Ford General Manager Ross Roberts said consumer research has produced no cause for worry.

“Fuel economy is important to the buying decision,” Roberts said. “People do take that into consideration. But right now, with the ready supply of fuel that is available in the United States, we have not had an issue on it whatsoever.”

Staff Reporters Mary Connelly, Kathy Jackson, Ralph Kisiel and Mark Rechtin contributed to this report.

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