While oil companies have been raking in record profits, Detroit has struggled to pitch gas guzzlers to consumers, causing a rift in the once amicable relationship.
The third quarter was so good to ExxonMobil that the company’s profit outstripped the losses of GM, Ford, and Chrysler combined.
ExxonMobil made $10 billion in Q3, even outstripping the profits of last year’s Katrina-excused price gouging. On the other hand, Chrysler lost $1.5 billion, Ford lost $5.8 billion, while GM lost “only” $115 million. As gasoline prices keep going up (and additional revenue makes it way into big oil’s pockets), people continue to eschew the trucks and larger vehicles that drove the Big 3’s profits for more than a decade.
(I’m sure this leads to some uncomfortable cordialities when the CEOs run into each other at the country club.)
Similarly, BP, Chevron, and Shell are also doing swimmingly too, but at least they are investing some of their huge profits into biofuels, solar and wind energy. These companies have a long-term view of profitability, unlike ExxonMobil, which is hoarding money and giving a lot of it to execs like former chief Lee Raymond, who walked away with $400 million. (I haven’t visited an ExxonMobil station in years, and will never again.)
You can expect that the auto companies will accelerate their slow move away from bigger vehicles and pimping for the oil companies. We’ll hopefully see more choices by 2010 in cars that get good gas mileage.
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By jackie T. Gabel, October 28, 2006 at 12:05 pm #
(Unregistered commenter)
See “Who killed the electric car?” If GM is at all interested in positioning itself as a leader in automobile technology, with any chance of saving it’s sorry ass, nothing in its electric car episode suggests it.
The only conclusion one can draw is that Detroit’s Big 3 (I guess the only 3 now) are fully compromised in service to Big Oil, an industry that appears to be doing everything it can to hold off development of new energy sources until it’s absolutely certain that it can totally control a centralized market for those as well.
Report thisBy Jon B, October 28, 2006 at 6:09 am #
(Unregistered commenter)
Detroit has the most incompetent lot in the world auto arena. During the oil embargo in early 1970’s, japanese secured their footing in small cars which detroil has none to compete head on. 3 decades later, japanese, european and the new comer Korean car makers expand their market shares at the expense of Detroit. If Detroit doesn’t come up with small and reliable cars, one might as well write them off in auto obituary.
Hello Detoit, oil is getting scare and the supply is not endless. Gas guzzler won’t last.
Report thisBy Spinoza, October 27, 2006 at 6:17 am #
(Unregistered commenter)
Until we outlaw the market and the ideology that the market knows best ---we can do nothing about a well planned transportation and energy consumption “best practice”.
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