If you're not young enough to be a Gen-Xer, you know the tale:

It's 1973. The Arab oil embargo throws a thunderous scare into the industrialized world, particularly the car-happy U.S., heavily dependent on inexpensive imported crude oil.

A year before The Embargo, General Motors Corp., true to its reputation for conducting exhaustive in-house research, formed a group dubbed the Energy Task Force. An early ETF report predicted a looming, fundamental change in foreign energy supply and pointed out that U.S. policymakers had no genuine contingency plan to manage a potential drastic cutback of foreign oil.

Armed with those assertions, ETF recommended a radical and immediate examination of GM's future product plans, with the goal of markedly improving fuel economy, as GM's 1973 passenger-car fleet delivered a horrendous 12 mpg. The strategy was to make cars smaller and lighter. The oil embargo that came a year later only cemented the conclusion that cars must get smaller. Soon after, in 1975, Congress legislated Corporate Average Fuel Economy (CAFE) in an effort to force the auto industry to increase fuel economy and ease future worries about too much reliance on foreign oil.

The U.S.'s infamous "downsizing era" had opened.

The front-wheel drive era was right behind.

How It Played Out

The domestic industry's first downsized car's were not front-wheel drive (FWD). GM toyed with FWD production cars since 1965's Toronado, but its first volume-produced downsized FWD cars were the X-bodies, launched in 1979 as 1980 models.

The former Chrysler Corp. earned the distinction of being first to mass-market domestic front-drivers in the U.S. with the Omni/Horizon two years prior. Chrysler's small car wasn't the result of a progressive world view, though: The company drew up the Omni/Horizon simply because its model range didn't have a compact car to compete with GM's Vega (later Chevette) or Ford Motor Co.'s Pinto. Ford's FWD Escort followed in the 1981 model year.

Front-drive, then, was a technology for the time, a happy convenience for the domestic carmakers when they realized their cars must get smaller but were reluctant to compromise passenger space. The Japanese and some European imports proved to good effect the packaging benefits of a sideways-mounted engine/transmission driving the front wheels. The typical FWD car was tidily proportioned yet offered reasonable interior space because the intrusion of a longitudinally mounted engine/bellhousing and central driveshaft tunnel could be eliminated from the passenger compartment.

The Big Three's downsized FWD cars were embraced by consumers; the new-generation front-drivers offered markedly improved fuel economy to a public with fresh memories of gas rationing (another fuel "crisis" hit in 1979). There were unique driving characteristics - by and large advantageous, but some not so desirable. Best of all, these new-age cars, though smaller than what America grew up with, still "felt" roomy.

From there, FWD took on a life of its own, penetrating, finally, to today's almost absolute dominance in the U.S. passenger-car market. Rear-wheel drive (RWD) cars, which accounted for 72% of the market the year of GM's X-body launch, have endured a six-fold plummet to just 12% of the '99 mix (see chart, p.43).

"Regulation drove vehicles to go smaller. And we as an industry probably deserved it," admits Tom Gale, executive vice president, Chrysler product development and design for DaimlerChrysler AG.

The Times They are a 'Changin'

Why, then, is "rear drive" on the lips of every car-biz executive, engineer, planner and stylist? Front-wheel drive didn't dominate because it's an inherently shoddy configuration.

The answers are manifold, at least partly technical - and, it appears, at times nearly metaphysical. There is a confluence of forces at work in the industry and in the market fundamentally influencing the most basic assumptions about a most basic aspect of automotive design: drive configuration.

Consider a few of these explanations:

n Cars are returning to something approaching the proportions of the pre-downsizing era (see graphic, p.36). Larger cars, in general, don't necessarily need FWD's space-maximizing virtues. A corollary: Cars are getting larger because Americans are gravitating toward larger trucks and sport/utility vehicles (SUVs). And it's okay that everything's larger because gas has never been cheaper.

The $4/gallon gasoline predicted after the 1973-'74 Arab oil embargo never materialized; after the 1979 oil scare, gasoline prices have steadily hovered near historic lows. Consistently inexpensive gas - coupled with huge powertrain efficiency leaps in the last decade and a half - obviated the push for a succession of smaller cars.

"There's no need for an A class (Europe's smallest) car in this country," asserts Scott Badenoch, manager of vehicle performance at Delphi Automotive Systems. Mr. Badenoch is a chassis-development expert who's intimate with cars and trucks of every drive configuration.

"We're going bigger (with vehicles in the U.S.)," he agrees. "There may be (future) mitigating factors that kill that - but for now, in the U.S. there are no constraints on the size of the automobile. Fuel prices are completely decoupled from the size of the automobile."

That sentiment is echoed by Mr. Gale: "We don't have the political will to do something about the (unnaturally low) price of fuel," he laments. "You'll have people driving around in Kenworths." He agrees that all vehicles are getting bigger - perhaps too much so - but adds, "I refuse (as part of the automotive industry) to take all the blame," for artificially low U.S. fuel prices and the ever more portly vehicles such a policy has encouraged.

This all has a bearing on the aptness of FWD in today's market climate.

"Look at the big American cars like the (Lincoln) Continental and the Chrysler LH," explains one European engineer. "For such size, front-drive is incongruous."

n The nation is experiencing an unprecedented era of prosperity. During prosperous times, a society sanctions excess. What's selling in the car business traditionally has been the mirror held up to the nation's - and individuals' - perception of economic health. New and seemingly lasting wealth has incited demand for larger, more luxurious - or even spurious - cars. Luxury and sports cars are the province of RWD.

"Relatively few luxury cars are based on front-wheel-drive components," says Mr. Gale.

A solid point indeed, because almost to a model, new-generation RWD cars for the U.S. market are luxury or sporty cars, or both.

Ford's previously foundering Lincoln-Mercury Div. won back a serious chunk of its premium-car credibility with this year's acclaimed LS sedans, based on the same long-heralded DEW98 rear-drive platform that birthed Jaguar's new S-type. Honda Motor Co. Ltd. has laid down the gauntlet in the sports car market with its all-new S2000 roadster, only the company's second RWD car ever to be offered in the U.S. And Honda's upmarket Acura Div. - currently wedded completely to FWD - apparently has seen the light and plans a competitive strike with a new RWD luxury/sport sedan derived from the S2000 chassis.

The poster child for the age of RWD enlightenment has to be Cadillac, though. Cadillac executives acknowledge their miscalculation of RWD's influence on the luxury car formula; the once-mighty division's fortunes have tumbled almost in direct proportion to its gradual shift to "corporate" front-drive platforms. Caddy barely had shown to the door the last of its RWD cars, 1996's Fleetwood, before its planners were busy penning a lineup of RWD replacements, most based on the upcoming Sigma architecture.

Worth watching are Lexus' fortunes, too. Next spring it unleashes the handsome IS200 sport sedan, a trim RWD bullet that will join the already acclaimed GS300/400 rear-drivers and the quintessential example of prescient recognition of the RWD factor, the LS400 flagship.n Buyers are more kn owledgeable, more discerning in their tastes. That trend is pervasive in everything from upscale clothes at K-Mart to Starbucks coffee. More than ever, consumers reject plain-Jane products. Everyone wants to feel they're buying into exclusivity, something special. After nearly two decades of FWD in practically everything from the smallest car to the largest, nothing could be more mundane than the driving experience of a typical FWD car.

"Rear-drive cars are perceived as more stylish and purpose-built," claims Bruce Quisen-berry, national product planning manager for Toyota Motor Corp.'s Lexus vehicles.

"Rear-drive cars have become an image model," he continues. "Look at all the most expressive show (concept) cars of the last year or so. Almost all of them are rear-drive."

Lexus startled the industry when it announced it would sell the IS200 in the U.S., starting next July as an '01 model. The IS200's inline 6-cyl./rear-drive configuration is at once a serious strike at BMW AG's virtual stranglehold on the compact RWD sport sedan formula brief and a risky foray into compact RWD territory Japanese carmakers, until now, have studiously avoided.

But Mr. Quisenberry believes Lexus understands the fundamental undercurrents at work in today's premium-car market. He says the company has identified U.S. buyers' confidence in their incomes and their willingness to pay more for upscale products - provided those products slake the seemingly bottomless thirst for something not everyone can buy.

n It could be that after 20 years of FWD's monopoly in most market segments, buyers are ready for a change. Essentially, the old cliche about the cyclical nature of the car business may be coming to bear on FWD's fortunes.

Delphi's Mr. Badenoch believes that's precisely what's transpiring; his take on the industry's historic cycles incorporates a solid belief that auto companies have an almost biological need to return to previously used formulae - in this case, RWD.

"There's a natural circadian rhythm to the design and evolution of automobiles," he says, noting that the hodgepodge of thought regarding the place of FWD and RWD in today's car market is due to the vagaries of product cycles that aren't always orbiting in sync with the industry's near-biological cycles.

"There's a certain intertia to product cycles," he says, adding that industry thinking regarding fundamentals like drive layout often take time to align with already determined future product plans - thus, "There are other things that are on a different circadian rhythm," from basic decisions like 'Do we go with front- or rear-wheel drive?'

The Technical Equation: Push or Pull?

Apart from the somewhat obtuse discussion of FWD and RWD "philosophies," as always is the case in the auto industry, there are technical considerations.

The domestic automakers introduced the public to FWD with plenty of advice about the layout's dynamic and space-efficient advantages.

Most of the information was true and most of it focused on FWD's foul-weather traction. Whimsical animations showed a horse pushing a buggy (RWD) and a horse pulling same (FWD); pulling is better than pushing, they exhorted.

About FWD's tractive abilities there is no dispute. It's hard to argue with the physics of having the major masses of the car - the engine and transmission - resting over the driven wheels, which essentially can leverage the heavy parts of the car to "pull" through snow and rain-slicked roads.

"If you look at FWD's principal advantage, it's all-weather ability," says Mr. Badenoch.

"Front-wheel drive is great for all climates," agrees Mr. Gale. "But now (RWD) technology has moved along."

The technology to which Mr. Gale refers is traction control. Indeed, the ability to perform high-speed, electronically controlled traction control - developed, broadly, by the early '90s - can be linked directly to the the reinvigorated thought regarding RWD.

"Technology has evolved," asserts Mike Evans, director of Lincoln vehicles at Ford's Large & Luxury Car Vehicle Center. "With traction control and stability control, you get a lot of the dynamic features front-wheel drive provided with rear-wheel drive."

Delphi's Mr. Badenoch is more cautious, though, convinced that FWD still wins in the worst weather. "There have been outstanding advances with traction control and tire technology. They bring a rear-drive car with snow tires close to a front-drive car on all-season tires. If you're in Colorado, you probably wouldn't want a BMW," he says, regardless of its fitment with traction control.

Some industry insiders suggest, too, that they see a trend emerging from this discussion: Concurrent with the introduction of more RWD models will come a concerted auto/tire industry push to impress on customers in foul-weather markets the idea that fitting true snow tires in winter months is the best way to optimize a RWD car with traction control.

The traction issue is pertinent only to certain customers and certain markets, though. What's germane to all is the longstanding FWD bugaboo: basic handling.

Front-wheel drive cars inherently understeer - that is, when a corner is taken too fast, the front end will try to push straight, toward the outside of the turn. It is the handling trait average drivers feel most comfortable with; simply backing off of the power or applying the brakes usually solves the problem. Both are natural reactions when a turn is entered too aggressively.

Rear-drive cars are renowned for their more "neutral" balance: Because the driving wheels are not being asked to also take on steering duties - and because the mass of the engine does not rest over the driving wheels - RWD cars generally respond more fluidly to steering inputs. Their chassis are more likely to oversteer, or send the rear of the car off toward the outside of the turn. This dynamic has traditionally been viewed as the more entertaining - if potentially more challenging - way to interact with the car.

For generations who have grown into driving with little to choose from but FWD cars, a RWD chassis now feels quite unique. Those old enough to have driven pre-downsized RWD cars most likely have spent the majority of the past two decades in FWD cars, too.

We're back to that "special" feeling today's consumers crave.

"One of the objectives with the IS200," says Mr. Quisenberry, "is to bring back that feeling of driver control. A rear-drive car is more pure in its form."

"Overall handling is more capable with a rear-drive car," adds Lincoln's Mr. Evans. "Consumers want to be more in touch with their vehicle. More and more people are moving into luxury segments - consumer expectations are to purchase a vehicle that provides a complete driving experience. It's precision steering and good vehicle dynamics," that today's more affluent and discriminating buyers gravitate to, he suggests.

Finally, there is the manufacturing aspect. The industry largely is in agreement that FWD cars are less expensive to produce than are unibody RWD cars. Mr. Quisenberry says that FWD cars also are easier to design for a broad range of different body styles and sizes.

"FWD is easy to package; it's simple to engineer," he says. "There is a lot more development time required for a rear-drive car."

"You have much better packaging, and front-drive is usually somewhat more flexible for different body styles," says Joe Eberhardt, vice president of marketing and technical affairs at Mercedes-Benz USA.

"Front-wheel drive is much simpler to manufacture," adds Mr. Badenoch. "Look at all the hand-offs you have. It is a simple package, there's a large amount of modularity. Ultimately, it's cheaper to assemble and manufacture."

The downside: Manufacturing considerations may have caused the domestic carmakers to overlook the importance of RWD in the premium market.

One supplier engineer who asks to not be named, claims the cost savings for FWD development and subsequent production are what drove the U.S. domestic manufacturers to develop - and continue to pursue - FWD for large and premium cars.It was a decision made, the source asserts, largely to rationalize huge investments in FWD production.

"That's definitely what happened to Cadillac," says the supplier source. "Particularly when GM decided that all the (Cadillac) cars would come out of one plant."

Finally: The Marketing Angle

The technical arguments hardly leave a consensus as to why RWD cars are blooming as industry darlings. Yet a new wave of RWD cars is coming. What's the common thread?

Primarily, the strength of the U.S. luxury car market. Add to it a slightly re-energized prospect for sporty cars. The traditional bastion of RWD cars - the European manufacturers - are absolutely raking in the dough. Daimler-Chrysler's Mercedes-Benz USA, for example, has enjoyed a three-fold sales growth in just the last five years. BMW AG is in the same happy boat.

That's the target. Manufacturers not getting a piece of the Europeans' action are scrutinizing the European makers' winning formula and coming up with a common answer: a solid heritage that revolves around RWD.

But will RWD be actively marketed? Should it, considering the assertion by some industry executives that customers don't really know the difference between FWD and RWD, that they're simply buying prestige nameplates?

Lexus' Mr. Quisenberry provides insight: Rear-drive buyers have money. And they do know what they want. He says Lexus research indicates 52% of those purchasing RWD cars had a specific model in mind. "In other words, before they come into the dealership, you've already sold the car." In contrast, just 30% of FWD buyers know for certain which model they want.

Read closely, because Lexus is saying customers clearly know the difference between FWD and RWD and understand, at least partially, what it all means.

"Consumers today are very well-educated on their vehicles," concurs Lincoln's Mr. Evans. "They know the characteristics of the type of vehicle they're looking for."

Mr. Eberhardt thinks most manufacturers just happen to be waking up to what makes Mercedes and BMWs so coveted - the totally balanced, entertaining feel imparted by a RWD chassis. He believes RWD is critical "unless you are in certain segments where the package simply demands front-wheel drive. That's why we make the A-Class.

"For us," he continues, it's easy (the marketing of RWD). We don't have to make a change because we've always been rear-drive. For the (U.S.) domestics, I think it's much more of a marketing position."

Positioning is what it's all about for Lexus, asserts Mr. Quisenberry. He says the company has identified two distinct "silos" that are forming in the market: one for mainstream, bread-and-butter cars for whom buyers have a set of less demanding qualifications. For those buyers, FWD is essential for its all-around, utilitarian usability. The other silo, served by RWD, places a heavier value on the aforementioned "stylish and purpose-built" component in the car-buying decision.

Mr. Badenoch and Mr. Eberhardt counter with slightly less enthusiastic visions of acute buyer awareness of RWD. "I think that's a myth," says Mr. Badenoch. "If they (marketers) think rear-drive is what's going to be selling cars, no." And only "some" buyers know which wheels drive the car, believes Mr. Eberhardt.

Nonetheless, it's agreed RWD is the "new thing" for maintaining - or creating - premium-market competitiveness.

Most other "features" start in the premium segments and sift down to lesser vehicles. Will it happen with RWD, reversing the FWD downsizing trend of two decades past?

"I think there's always going to be a place for front-wheel drive," says Mr. Gale. "But some of the differ-entiators between front- and rear-drive have changed."

Chrysler is thought to be working on a few rear-drivers itself, namely for the next-generation LH large car platform and for a reincarnation of the Charger muscle car, but Mr. Gale won't bite:

"If there's an opportunity in the marketplace, we would look at any type of driveline layout. We've made no decisions about the LH platform."

But Mr. Evans is more enthusiastic. "I think in the future, it can happen. There may be some migration into other segments. It depends on the consumer."

Think of it: a rear-drive Taurus or Camry. To paraphase where's-she-been-lately comedian Judy Tenuta, Mr. Quis-enberry suggests 'It could happen!'

"The question comes down to what the universe of buyers wants to accept."