On June 1, General Motors will announce plans for restructuring its business or entering bankruptcy. No matter what happens, the impact will be seismic. Looming changes at the Big Three will undoubtedly result in job losses and closed factories, with health care plans and retirement savings at risk for thousands of workers and their families.
While we face these challenges, we may also have a once-in-a-lifetime opportunity to radically transform the auto industry. More than 50 years ago, GM President Charles Wilson reportedly said that, “What’s good for General Motors is good for the country.” The opposite may also be true – that what’s good for the country’s air quality and energy security may help lift GM out of chaos.
Last week the auto industry bowed to the inevitable and accepted new higher fuel economy standards. This is a step in the right direction, but it represents only a fraction of what the auto industry could do. Instead of a piecemeal approach, car companies could use their unique place in American life to bring environmental leadership into the design, production, sale, service, financing, insurance, and even use of the cars and trucks they sell.
The most immediate opportunity is at Saturn, which GM has said it wants to sell, and for which there are at least two interested buyers. Launched in 1985 as a competitive response to the success of small-car imports, Saturn has sold over four million vehicles, of which 3.3 million are still on the road. The Saturn brand stood for distinctive, low-priced, fuel-efficient cars and a best-in-class customer experience with “no haggle” pricing.
At launch, then GM CEO Roger Smith declared that "Saturn is the key to GM's long-term competitiveness, survival and success. Its mission: … [to] affirm that American ingenuity, American technology and American productivity can once again be the model and the inspiration for the rest of the world." We now know that vision was never fully realized. Still, the Saturn brand is distinctive in the car marketplace, and Saturn buyers exhibit a loyalty to the “Saturn experience” that positions it to lead the way to a new kind of car company.
Imagine a car buying experience that really is no hassle for the customer and the planet. What would this look like? Saturn showrooms would become showcases where customers are guaranteed not only no haggle pricing, but also no haggle mileage, with all vehicles meeting high fuel economy standards as well as “green” design standards for materials, production and recycling
Saturn dealers would do more than just sell cars. They would offer training on how to drive and maintain your vehicle to get peak performance and lower fuel costs. They would develop new financing programs with better rates for higher mileage cars, and build partnerships with insurance companies to provide mileage-based policies that reward lower mileage (and therefore lower risk) drivers. After all, as fuel bills and insurance bills and car payments go down, customer satisfaction, return business and word-of-mouth reputation goes up.
Some dealers might even help their customers find car-pool options, or might offer hourly rentals on small, fuel efficient cars. On the surface it might seem nonsensical for a dealer to offer alternatives to car ownership, but it fits right in if we think of dealerships not as sellers of cars, but as providers of mobility. These kinds of mobility services have environmental benefits, but they also represent new revenue streams for the dealer and create an entirely new customer base and experience.
Last but not least, dealers will need to “walk the talk” by building and operating their showrooms and service centers with the lowest possible environmental footprint. Energy efficient lighting and ventilation systems, water conservation, minimal use of toxic materials, waste recycling – all would be hallmarks of a Saturn facility.
Shareholders and regulators should challenge any party interested in acquiring Saturn to demonstrate how it will create a different kind of car company, committed to building high-quality, fuel efficient cars that are designed, manufactured, sold and repaired with both the customer and the environment as objectives.
This truly would be a new kind of car company. And might just be a glimpse of a hard-to-find silver lining in the auto industry downturn that is impacting so many hardworking Americans.
Gwen Ruta is vice president of corporate partnerships at the Environmental Defense Fund. She is based in Boston, Massachusetts.
This post originally ran in the Detroit Free Press on May 29th.
