In the tank: how oil prices threaten automakers' profits and jobs

Abstract

Since the late 1990s, Detroit's three big U.S. automakers -- General Motors Corp., Ford Motor Company, and DaimlerChrysler -- have relied heavily on large, truck-based sport utility vehicles to drive company profits. But with gasoline prices now at near-record highs, consumer demand for mid- and full-size SUVs is sinking fast. What if higher gas prices are here to stay and the trend away from gas-guzzling vehicles continues? This July 2005 report, a joint effort from NRDC and the Transportation Research Institute's Office for the Study of Automotive Transportation (OSAT) at the University of Michigan, says that sales, profits, and American jobs are at risk if Detroit automakers continue with their current business strategy in the face of higher oil prices. The report recommends actions that automakers, government, and investors can take to mitigate the risks.