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.