Nine years ago this week, Al Gore warmed up his run for the presidency by making a visit to Motown and speaking to the Detroit Economic Club. I covered that speech and recall that Gore was entering hostile territory. Detroit, an SUV boomtown in those days, was deeply skeptical of the vice president, who famously called for the death of the internal-combustion engine. But Gore, keen on endorsements from Big Labor and contributions from wealthy auto execs, changed his tune in Detroit. "Here in Motor City, we recognize that cars have done more than fuel our commerce," he rhapsodized. "Cars have freed the American spirit, and given us the chance to chase our dreams."
My, how times have changed. This week, Sen. Barack Obama attempted to fuel his presidential run with a scalding speech to the Detroit Economic Club, castigating Motown's big wheels for driving our dependence on foreign oil. "For years, while foreign competitors were investing in more fuel-efficient technology for their vehicles, American automakers were spending their time investing in bigger, faster cars," Obama told an audience stunned into silence after greeting him with a standing ovation."Whenever an attempt was made to raise our fuel efficiency standards, the auto companies would lobby furiously against it, spending millions to prevent the very reform that could've saved their industry. Even as they've shed thousands of jobs and billions in profits over the last few years, they've continued to reward failure with lucrative bonuses for CEOs."
What played as an act of courage in the rest of the country, is being seen as political suicide here in Detroit. "People were looking for so much more from Barack Obama," Detroit Mayor Kwame Kilpatrick told me. "He left a lot to be desired with that message." Kilpatrick, who introduced Obama to that thunderous ovation, met with him privately afterward and told him he missed an opportunity to woo Michigan voters by addressing their concerns about soaring health-care costs and fair trade. "As president, he needs to say what he would do to stand up for these other issues," says Kilpatrick, "instead of just slamming these companies for their [lack of] fuel efficiency." And while it once might have seemed a slam dunk that one the nation's leading African-American mayors would endorse Obama, Kilpatrick makes it clear that he's not nearly ready to do that. "I'm not going to disengage from him simply because of one speech," Kilpatrick said. "But he needs to work on that message."
Kilpatrick is kind, though, compared to what others in Detroit are saying. "Sen. Obama embarrassed himself in Detroit with his lack of understanding of the problems facing the automobile industry, and what it will really take to fix them," the conservative-leaning Detroit News said in an editorial beside a political cartoon mocking Obama for criticizing a Detroit SUV that turns out to be a Toyota Land Cruiser. During his speech, the auto execs in the crowd—and there were many—began muttering that he didn't know what he was talking about. (One factual gaffe getting a lot of traction is Obama's assertion that Japanese cars average 45mpg, when the actual mileage is closer 30mpg). "It was definitely uncomfortable," says Eric Foster, a Detroit political consultant who sat near tables full of auto execs. "The mood lightened when he took on the oil industry."
Obama had barely left Detroit's Cobo Hall before lobbyists for the automakers and the United Auto Workers began churning out stats to counter his argument. From the UAW: the jobs of 17,000 workers will be put at risk by Obama's proposal to require a 4 percent annual increase in gas mileage (a suggestion, by the way, first made by President Bush). From Chrysler: Obama's offer of $7 billion to help with the automaker's health-care costs translates to $29 per car, compared to a benefits burden of $1,500 per car the U.S. automakers now bear. "Twenty-nine dollars," says Chrysler spokesman Colin McBean, "is really not a lot of help."
Among the chattering classes in America's car capital, Obama's speech quickly became known as his "Sister Souljah moment." Just as Bill Clinton once tried to show he wasn't beholden to the black vote by criticizing the controversial rapper back in 1992, Obama was now showing he wasn't the typical Midwestern Democrat, kowtowing to Big Labor and Big Factory Bosses. "This was a cheap political stunt," snapped one Detroit auto exec. "He wanted to generate headlines that 'Obama goes in and talks tough to Detroit'."
That's exactly what he did, too. And that plays well in the rest of the country. Detroit's reflexive defensiveness on boosting gas mileage goes over like sand in the gears in a country struggling with $3 a gallon gas (and worrying it will go to $4). The fact is Japanese automakers do lead in hybrids and fuel-efficient crossover models, while Detroit remains too dependent on big SUVs and trucks. Sure, American automakers are now working on new mileage misers, but they are playing catch-up. That's why the Detroit Three combined lost more than $16 billion last year, while Toyota earned a record $14 billion and surpassed GM as the world's largest automaker. "I would love it if Detroit would stop being defensive," says auto analyst Peter DeLorenzo, whose inbox filled with hate mail after he wrote a blog supporting Obama's call to action on fuel economy. "There's tremendous negativity toward Detroit among consumers and a lot of it is self-inflicted."
Indeed, dismissing Detroit as a relic of the bygone American Century is politically popular just about everywhere at the moment. In fact, Obama didn't even have to leave town to find support on that front. After his speech, he raced off to two fund-raisers in Detroit, including a $2,300-a-plate dinner at Seldom Blues, a hip jazz restaurant atop the General Motors headquarters building along the Detroit River. The restaurant was packed with about 250 people, but the crowd didn't include auto execs, UAW leaders or Mayor Kilpatrick. That might work for now, as Obama attempts to define himself as an independent thinker. But ultimately, like Al Gore, Obama will have to make nice with those he criticized in Motown. Why? For the last four presidential elections, Michigan has gone Blue, unlike many Midwestern states. "In the end, the presidential race is all about electoral votes," says Kilpatrick. "If Michigan is not important to a particular candidate, that's fine. But we've got 18 electoral votes. That's pretty significant." If Obama hopes to win the White House, he might make his next drive through Detroit more of a joy ride.
Switching Gears: Griping and Guzzling
While the Detroit power elite debated Obama's speech this week, regular folks were busy griping about gas prices.
Joan Witte suffered sticker shock at the gas pump last week when it cost her nearly $50 to fill up her Ford Taurus. When she got home, she and her husband sat down and computed their new monthly gas bill: $500. "That's more than my first house payment," she groaned. And yet the PR exec at the University of Michigan isn't about to ditch her daily commute of 72 miles from her home in a bucolic exurb of Detroit to Ann Arbor. "The pain point hasn't hit yet," she says. "Maybe we'll eat out less."
As pump prices reach record levels again this spring, American drivers show no sign of letting off the gas. Even with gas above $3 a gallon, gasoline consumption is expected to rise at nearly twice the rate of last year, according to the Energy Information Administration. Every day in America, drivers burn through 380 million gallons of gas, up 18 percent from a decade ago. This record guzzle rate is being driven by all our driving. On the road last year, all the odometers in America combined to turn over 3 trillion miles for the first time. That's nearly 15,000 miles for every driver on the road in 2006, up from 10,616 miles per driver back in 1982, federal highway statistics show. Our insatiable demand for petrol, combined with ill-timed refinery shutdowns, has left spring gasoline inventories at their lowest levels since 1956. And that's causing all this pain at the pump. "This caught oil companies by surprise," says oil analyst Phil Flynn of Alaron Trading. "People are shocked that demand is not going down with gas prices going up."
Why won't we stop guzzling? Part of the reason could be the generation behind the wheel. After the oil shocks of the '70s, our parents embraced the need to sacrifice and cut gas consumption by 12 percent between 1978 and 1982. These days, affluent boomers don't feel as much of a pinch at the pump since fuel costs make up 4.5 percent of the household budget, half what it was in the '70s. Back then, mom and dad parked the gas hog and started driving one of those new little economy cars. These days, boomers are switching from SUVs like the Ford Explorer, which gets 15mpg in the city and 21 on the highway, to modestly more fuel-efficient crossover utility vehicles like the Acura MDX (17mpg in the city; 22 on the highway). And hybrids, for all their buzz, still account for less than 2 percent of auto sales.
The one thing we do better than gulping gas: grouse about gas prices. There's even a viral Internet effort afoot to get drivers to boycott gas stations May 15 in hopes of hurting Big Oil. It won't, energy experts say. "That will be like the fat guy not eating Biggie Fries for a day," says energy analyst Tom Kloza. The best way to stick it to Big Oil—and get pump prices falling—is simply to stop buying so much gas. "Even if we all just gave up one gallon a month," says Kloza, "you'd be shocked at the impact that would have on prices." Fat chance, though. When it comes to kicking our oil addiction, we can't seem to put our motors where our mouths are.