Gas price hikes could hamper Big 3 But Detroit carmakers are better prepared for $3 fuel than in past Christine Tierneyand David Shepardson / The Detroit News
Auto executives were upbeat at this year's Detroit auto show, buoyed by a sales recovery that's gaining momentum, rising profits and renewed consumer interest in American cars and trucks.
But a rise in gas prices is casting a shadow across the industry's otherwise sunny outlook.
Prices at the pump have climbed above the $3-a-gallon level that catches drivers' notice, and Detroit's automakers are more exposed to rising gas prices than most of their rivals.
General Motors Corp., Ford Motor Co. and Chrysler Group LLC displayed an impressive lineup of small and fuel-efficient cars at the North American International Auto Show. But they still generate their biggest profits from light truck sales.
The U.S. automakers benefited last year from a rebound in truck and SUV sales, underpinned by stable gas prices. Two years earlier, truck sales had collapsed when gas prices surged above $4 a gallon.
Gas prices fell back during the recession, but now they're rising again. Since late August, nationwide prices have risen 15 percent to $3.09 a gallon for regular gasoline. In Michigan, regular gas retails for $3.12 a gallon, on average.
"As fuel prices go up, people put more emphasis on fuel economy," said Ford Chief Executive Alan Mulally. "We saw previously that as gas prices get above $3, people start making different decisions."
Ford's business plan assumes gas prices will be in a range above current prices, said Mark Fields, president of the Dearborn automaker's North and Latin American operations.
"When the snows fall and the white winds blow, the lone wolf dies but the pack survives." Winter is Coming Now this is the Law of the Jungle—as old and as true as the sky; And the wolf that shall keep it may prosper, but the wolf that shall break it must die. As the creeper that girdles the tree-trunk, the Law runneth forward and back; For the strength of the Pack is the Wolf, and the strength of the Wolf is the Pack.
