By Raymond Viger
Over a century ago, the enterprise created by Henry Ford had as its aim to motorize the rural population. This objective was achieved in the 1920s. Were automobile manufacturers content to rest on their laurels once this occurred? Certainly not. Expansion is healthy and laudable for any business. But were the means they used to grow their businesses socially acceptable? Was the end result something harmful to the common good?
In this era, cities weren’t exactly inviting places for the automobile. There were parking problems, a 20 km/hr speed limit, horses everywhere, electric trains… On top of all this, major cities already had an adapted urban transportation system, with tramways and streetcars on the surface and subways underground.
Alfred P. Sloan, President of General Motors from 1923 to 1956, launched a war cry: Eliminate the streetcar! Sloan created a working group, called a “special unit,” whose mission was to think up strategies to replace electric streetcars with gas-powered buses. By discrediting public transport, car manufacturers would sell automobiles as a sure way of traveling in urban centres. This went on until 1960.
The Elimination of Streetcars
The U.S. had 1,200 separate electric street and interurban railways, a thriving industry with 44,000 miles of track, 300,000 employees, and 15 billion annual passengers. The purchase and dismantling of smaller streetcar transit companies posed no problem for GM. It was the big networks, like New York Railway and Los Angeles’ Pacific Electric, that posed bigger issues. If GM couldn’t get rid of those, the strategy to make tramways disappear would fail.
To achieve their goal, GM learned that the owners of these urban transport networks were electric companies that used these concerns, usually unprofitable, to compensate for the profits made by the sale of electricity, and therefore not pay tax.
In the early 1930s, GM denounced this practice by showing how much the government was losing in taxes. Congress adopted a law forbidding electric companies to own streetcar companies. The electric companies had no choice but to sell off their railways at a discount to GM. In 18 months, the 150 km of tramway rails in Manhattan were dismantled. It was the end of the New York network.
To camouflage its acquisitions and dismantling efforts, GM founded a front company, National City Lines (NCL). NCL created several sub-companies that each worked on a separate section of U.S. territory. An alliance was forged with Standard Oil and Firestone.
The result: Over a hundred rail networks in 60 cities disappeared. For being behind this antisocial plot, in April 1949 a federal jury declared GM guilty of colluding with Standard Oil and Firestone. They were slapped with the ridiculous fine of $5,000. GM’s chief financial officer was also found guilty and fined one dollar!?!
Montreal’s Tramways
On March 19, 1946, the president of the Montreal Tramways Company, Robert Watts, raised the problem of tramways blocking automobile traffic on the city’s roads. It was an era in which Montreal’s tramways accommodated 1,200,000,000 passengers each day, or 398,349,773 passengers per year. Robert Watts questioned why the city government hadn’t replaced any vehicle since the war’s end. By 1959, Montreal saw its last tramways disappear.
Oil Crisis
To reduce gas consumption, on January 2, 1974, U.S. President Richard Nixon limited the speed limit to 55 miles an hour. That was better than nothing, but with vehicles that consumed 17.4 litres /100 km, the efficiency of this measure was limited.
Nixon forced the industry to produce cars that consumed less gas. He adopted the CAFE standards (Corporate Average Fuel Economy), which required manufacturers to produce more fuel-efficient vehicles, to reach a target of 8.6 litres3100 km in the 1980s. Despite putting 35% more vehicles on the road, Americans managed to reduce their oil consumption by 2 million barrels a day. An excellent result.
Manufacturers carried out research to reduce gas consumption. They came up with prototypes that could go as low as 2 litres per 100 km using conventional technology, without any kind of hybridization or electrification (Renault Vesta 2 in 1987: 1.94 litres per 100 km).
This work, sadly, had no impact on production vehicles that just got heavier and bigger to satisfy security standards and assure more performance and comfort for users.
The American automobile industry was on the brink, close to being bankrupt. It had to build smaller cars, which it didn’t know how to do. Japanese manufacturers took control of over 20% of the U.S. market.
President Ronald Reagan, who began his term in office in January 1981, went to the rescue of the industry and eliminated CAFE. He thought it was too high a price to pay to eliminate America’s dependence on oil. During this time, the world oil industry played with prices and pocketed billions in profit.
Can we talk about financial extortion? Gangsterism?
How should governments have reacted to this fraud, which had been going on for far too long already?
One of the green solutions for helping the planet is to guarantee cities better public transit. And here they were, closing public transit networks down! When does the good of a few shareholders trump the interest of the entire community? Just how far do they have to go to provoke governments to stand up to lobbyists?
The Electric Car
The first electric car was commercialized in 1852! The arrival of rechargeable batteries in 1859 and improvements in 1881 were technological advances. In 1899, 39% of the U.S. auto market was electric.
By 1920, the electric car had fallen into oblivion with the dominance of the Model T Ford.
Starting in 1966, pollution, along with oil supply fluctuations, revived interest in electric vehicles.
California has long been a leader in its efforts to reduce air pollution. In 1990, California required that 2% of the vehicles that large manufacturers produced for sale in California in 1998 had to be green vehicles with zero emissions. To comply, GM developed the EV-1; Ford came up with the Think.
Destruction
GM and Ford, associated with major oil companies, contested the right of a single state of the union to make such a requirement. When George W. Bush came to power, a federal court invalidated the law. That same day, despite a long list of customers and profitable rentals, GM announced the recall of about 1,000 EV-1 cars that they were leasing out. They were all destroyed. A few months later, Ford did the same.
In 1997, Japanese manufacturers started selling hybrid cars. In 2003, California withdrew its Zero Emission Vehicle law. Hybrid cars disappeared from American roads at the same moment. We had to wait until 2008 for Nissan and Tesla to relaunch the race to electrify automobiles.
Where would we be if GM and Ford hadn’t abandoned electric cars? Can we accuse GM, Ford and other businesses of collusion? Do they deserve large, harsh penalties for such antisocial behavior? For being complicit with them, should Ronald Reagan and George W. Bush be prosecuted for crimes against humanity?
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