Higher Gas Prices = Smaller Cars … Again
General Motors announced today that it is restructuring by closing plants and changing production to smaller cars. I for one will certainly not miss seeing those tanks – er, Hummers – on the roads. GM execs said that higher gas prices represented a “structural change” of the economy, not just a cyclical change. I think it’s both.
My husband and I have been betting on how long it would take the care manufacturers to respond to this gas price increase. Like other Baby Boomers, we’ve seen it before. We saw it in 1973 when OPEC raised gas prices, and the energy crisis of 1979.
Almost instantaneously the automakers got rid of the big old “gas guzzlers,” stopped making V8 engines, and made smaller cars.
Remember that following these “crises” there was an oil glut in the 1980s? And slowly but surely the size of cars started getting larger, and larger, and larger….
Why is anyone surprised at all of this? The current gas crises is, in part, a restucturing the economy to cope with the current oil situation, but it’s also cyclical.
Those who do not learn from history are doomed to repeat it. And here we go again.
2 Comments
Jean,
One of the advantages of getting older is seeing cycles repeat themselves, and not buying into “the sky is falling” thinking.
Age gives us perspective and makes us more positive during the harder of economic times.
I’m glad for that and proud to be a Boomer.
I absolutely agree with you, Linda. But it’s surprising how quickly people forget. Ask some of your contemporaries is they remember the gas ‘crisis’ of 1973 and see what they say.