One might think their business decisions had something to do with a world where gas was under $2/gallon less than 4 years ago, and not stupidity or other negative qualities often ascribed to them. Japanese and European car makers, in contrast, always needed to make tiny fuel-efficient cars for their domestic markets, and then happened to be in a great position in a suddenly fuel-scarce world.
We have a habit of ascribing causality to human virtue and vice too much when the world is actually much more random. Had the executives of Ford or GE known what fuel prices would do from 2005-2007, of course they would have made different decisions.
Let's see, state of the "stability" of oil in the world in 2005:
Russia is run by a former KGB head who extra-legally destroyed their private oil producers.
Venezuela, one of the world's largest producers, has a president who thinks america is evil.
Continuing war in Iraq.
Gas prices at the pump have been rising on average for years. I just rechecked this and indeed, since before 2003 even prices have been on a long average upward trend. Even after our current plunge, prices are much higher than the LOWEST price in 2006.
Outside the US (where even US automakers should have known the bulk of their growth was going to come from) small efficient cars continued to outsell SUVs.
And yet instead of fixing their money-losing operations, they went all-in on their highest risk area: expensive inefficient trucks.
The geopolitical situation of the oil producing nations has been problematic for a long time. You might be right about gas price trends, but I seem to remember gas staying below $2 until Hurricane Katrina (at least in the Southeast), and then the price undergoing a few discontinuous rapid increases. A long upward trend in prices doesn't disrupt their business plans, as long as the slope or the change in the slope remains roughly constant.
Do you really think foresight in the auto-industry is that easy? Do you really think the executives of the American companies were that stupid? Is every company failure due to the stupidity of its executives? Can every failure be avoided?
It often seems that way in hindsight. But personally I find it striking that the automakers in trouble were all catering to the American domestic market, and the ones doing well were all catering to small-car oriented foreign markets.
We have a habit of ascribing causality to human virtue and vice too much when the world is actually much more random. Had the executives of Ford or GE known what fuel prices would do from 2005-2007, of course they would have made different decisions.