Government assault: forcing the automakers to think safety and fight smog

Oil and water. The Hatfields and McCoys. Ralph Nader and the Corvair.

The auto industry's relations with Washington for most of the last three decades have been contentious, to put it mildly.

This political head-knocking didn't really begin until the early 1960s, the heart of the post-World War II boom.

Oh, President Harry Truman did convene a National Traffic Safety Council in 1946, declaring that motor vehicles should be "progressively designed and constructed for safer operation and maximum protection from injury in an accident." But the war had just ended. Folks wanted to begin enjoying the good life. Factories were shifting from tanks and bombs to cars, refrigerators and television sets.

Six years later, a 1952 Cornell University study found that seat belts like those used in airplanes could reduce injuries in traffic accidents. But consumers weren't beating down dealers' doors to order them.

It would take more than a decade for safety to develop a political constituency. From 1950 to 1966 the number of people killed each year in traffic accidents sky-rocketed from 34,763 to 53,041. The dream of unlimited mobility didn't come without risk and tragedy.

More cars were on the road. The muscle car era had arrived. Younger and less-experienced drivers were squeezing the maximum power from Herculean engines.

In 1964 Congress established the first safety standards for the 50,000 cars purchased each year by the General Services Administration. Within a year, the drumbeat for broader government action was pounding deeper into the public consciousness.

"Automobile accidents are as familiar as the common cold, and far more deadly," editorialized the New York Times in July 1965. "Fifty thousand Americans will lose their lives in automobile accidents this year, almost as many as were killed in World War I. The responsibility lies with the industry. If Detroit doesn't exercise it, Washington will, and should."

Suddenly, America's romance with the automobile was under assault from cranky corporate critics and indignant consumerist gadflies who couldn't give a rip about the thrill of thrusting from 0 to 60 in 8 seconds or less.

Ralph Nader was the new movement's pied piper. His 1965 book Unsafe at Any Speed landed a broadside into General Motors Corp.'s Chevrolet Corvair, transforming the rear-engine compact into a dubious icon of the industry's failures. The car tended to spin out in high-speed turns due to a less-than-firm suspension.

But he didn't stop there. Mr. Nader projected the sins of one ill-conceived car onto the entire industry. The car was "the greatest environmental hazard in this country." He spoke of children impaled on "the dagger fin of a Cadillac," and "an intransigent, unified industry that produced millions of little pollution factories on wheels."

Rather than confining their debate to facts, GM unfortunately launched a vindictive personal attack on the quixotic consumer crusader.

Just as Sen. Abraham Ribicoff opened a series of hearings on automotive safety in March 1966, news broke that GM had been stalking Mr. Nader across the country, trying to convince reporters that he was a homosexual. GM President James M. Roche, who was scheduled to testify, wound up apologizing for his company's excesses.

Mr. Nader later sued GM for invading his privacy. The company settled out of court for $425,000.

The entire episode set the adversarial tone that defined the government's attitude toward Detroit for decades. The more activist regulatory environment has since added tens of billions to the cost of building cars. But it has made driving safer.

Congress established the National Highway Traffic Safety Administration (NHTSA) in 1966. The new agency, reporting to the Department of Commerce, quickly set 17 standards, which included requiring seat belts, padded visors, padded dashes with recessed control knobs, safety door latches, standard bumper heights and collapsible steering columns.

More than two dozen new standards were adopted by 1969, and NHTSA envisioned itself as a catalyst for improved quality and began publicly announcing recalls.

As early as 1969, NHTSA began pushing for air bags. GM responded first, investing $80 million to outfit up to 300,000 1974-'76 Buicks, Oldsmobiles and Cadillacs. Despite selling them far below cost ($300), only 10,000 customers wanted them.

Meanwhile, the activist regulators in Washington already had turned their sights on another undesirable impact of increased mobility: air pollution.

California, where increasingly dense veils of smog were erasing once breathtaking views, took the lead. It required exhaust-control devices in the 1966 model year. The feds followed suit in 1968, imposing nationwide standards similar to California's.

Then Sen. Edmund Muskie (D-ME), led an effort to amend the Clean Air Act in 1970. Emissions of carbon monoxide, hydrocarbons and nitrogen oxide were to be cut by 90% by 1976. While Honda, Mazda and Mercedes-Benz came up with engine technology to easily meet those goals, the Big Three lobbied hard, and successfully, for a two-year delay in the deadline. Thanks to GM's catalytic converter, which required drivers to use only unleaded fuel, all three domestic makers were able to meet the goal without drastic break-throughs in engine technology.

Chrysler thought it could bank on "lean-burn" technology, but wound up buying converters from GM at more than twice GM's cost, a disadvantage it could ill afford as it drifted into a crisis that would require another form of government intervention.

From the spring of 1973 to the spring of 1974 the average retail price of regular gasoline had jumped from 38 cents a gallon to 54 cents a gallon. It was the nation's first glimpse of how the global economy would jolt our post-war prosperity. But the second "oil shock" in 1979 more than doubled gas prices between 1978 and 1981.

With Republican President Richard M. Nixon weakened by the intensifying Watergate investigation, the Democratic Congress flexed its regulatory muscles and passed the Energy Policy and Conservation Act of 1975, creating the acronym that Detroit loves to hate: CAFE, or Corporate Average Fuel Economy.

By 1978 the average of a manufacturer's line of passenger cars would have to be at least 18 mpg (13 L/100 km). The standard was set at 27.5 mpg (8.5L/100 km) by the 1985 model year and remains there.

Considering that the Big Three averaged a collective 13.2 mpg (17.8L/100km) in 1974, CAFE forced a fundamental rethinking in automotive engineering.

The industry complained.

When Chrysler teetered on the precipice of bankruptcy in 1979, Chairman Lee A. Iacocca blamed the cost of regulations for exacerbating the company's problems.

"Government helped us get into this mess, so government should be willing to help us get out," rationalized Mr. Iacocca in pursuing a $1.5 billion guaranteed loan.

Between 1966 and 1985, the government spent nearly $20 billion on safety research and development alone.

In contrast to Japan, where automakers historically shared some research and development, anti-trust laws prohibited such cooperation among the Big Three.

But what the federal bureaucracy was encouraging, the Japanese automakers were forcing GM, Ford and Chrysler to do. The Big Three were losing market share to Toyota, Nissan and Honda, which in 1973 introduced its Civic. The small car already exceeded the 18-mpg (13L/100 km) standard CAFE had set for 1978 without needing a catalytic converter.

More recently, especially for the Big Three, relations with Washington have edged slightly in a more cooperative direction. The Clinton Administration has taken a more aggressive position with Japan to open its market to American producers.

And anti-trust restrictions on cooperative research have been loosened in areas such as battery technology, safety and electronics. The Big Three also are working with the Commerce Dept. in the Partnership for a New Generation of Vehicles, which is hoping to develop a safe, viable, family-size car that can get 80 mpg (3L/100 km) by 2004.

Debate continues about whether government has helped or harassed the industry.

"It's true the regulatory requirements have produced cleaner and safer vehicles more quickly," says Michael Stanton of the American Automobile Manufacturers Assn. "But it has unnecessarily enforced compliance schedules that resulted in less than optimal equipment and higher than necessary costs to the consumer."

But Daniel Roos, a Massachusetts Institute of Technology engineer and co-author of The Machine that Changed the World, disagrees.

"Were it not for government intervention, the American automotive industry would be even worse off versus foreign competition," Mr. Roos writes. "Practically every recent move by U.S. automakers to adopt advanced features -- lightweight metals, high-strength plastics, electronic ignition devices -- can be traced to the influence of government regulations."