By Steve Schifferes Economics reporter, BBC News, Detroit Motor Show
By Steve Schifferes Economics reporter, BBC News, Detroit Motor Show
Many US firms are predicting that demand for bigger cars will pick up
Many US firms are predicting that demand for bigger cars will pick up
Chrysler's chief economist Van Jolissaint has launched a fierce attack on "quasi-hysterical Europeans" and their "Chicken Little" attitudes to global warming.
Chrysler's chief economist Van Jolissaint has launched a fierce attack on "quasi-hysterical Europeans" and their "Chicken Little" attitudes to global warming.
His attack is in sharp contrast to the green image that the US car companies have been trying to promote at this year's Detroit motor show.
His attack is in sharp contrast to the green image that the US car companies have been trying to promote at this year's Detroit motor show.
Mr Jolissaint was speaking at a private breakfast where the chief economists of the "Big Three" US car firms presented their forecasts for auto industry sales this year.
Mr Jolissaint was speaking at a private breakfast where the chief economists of the "Big Three" US car firms presented their forecasts for auto industry sales this year.
Most of the audience - which was mainly made up of parts suppliers - seemed to nod in agreement with Mr Jolissaint.
Most of the audience - which was mainly made up of parts suppliers - seemed to nod in agreement with Mr Jolissaint.
Neither Ford's chief economist Ellen Hughes-Cromwick, nor General Motors' chief economist Mustafa Mohatarem, who were on the panel with Mr Jolissaint, questioned his assertion.
Neither Ford's chief economist Ellen Hughes-Cromwick, nor General Motors' chief economist Mustafa Mohatarem, who were on the panel with Mr Jolissaint, questioned his assertion.
Uncertain magnitude
Uncertain magnitude
Mr Jolissant, who was recently appointed the chief economist for the German-US DaimlerChrysler Group, said that since he started spending more time at the company's corporate headquarters in Stuttgart he had been shocked by the absurdity of European attitudes towards global warming.
Mr Jolissant, a Chrysler veteran who was recently appointed the chief economist for the German-US DaimlerChrysler Group, said that since he started spending more time at the company's corporate headquarters in Stuttgart he had been shocked by the absurdity of European attitudes towards global warming.
In response to a question from the floor, he said that global warming was a far-off risk whose magnitude was uncertain.
In response to a question from the floor, he said that global warming was a far-off risk whose magnitude was uncertain.
He said that from an economic point of view, it would be more rational to spend lots of money on today's other big problems, and only make small and limited changes in policies relating to global warming, such as a slight increase in gasoline or carbon taxes.
He said that from an economic point of view, it would be more rational to spend lots of money on today's other big problems, and only make small and limited changes in policies relating to global warming, such as a slight increase in gasoline or carbon taxes.
Airlines and factories are being urged to help cut global warmingMr Jolissaint was particularly scathing about the Stern Report, which was recently published by the UK government.
Airlines and factories are being urged to help cut global warmingMr Jolissaint was particularly scathing about the Stern Report, which was recently published by the UK government.
The report urged governments to take urgent action now to tackle climate change, arguing that it would be much cheaper to act, rather than face the $10 trillion cost of not doing anything until later.
The report urged governments to take urgent action now to tackle climate change, arguing that it would be much cheaper to act, rather than face the $10 trillion cost of not doing anything until later.
Mr Jolissaint said the report was based on dubious economics, did not include a discount rate, and was written by an informal adviser to Gordon Brown - in fact, at the time of the report, Mr Stern was the Second Permanent Secretary at the UK Treasury.
Mr Jolissaint said the report was based on dubious economics, did not include a discount rate, and was written by an informal adviser to Gordon Brown - in fact, at the time of the report, Mr Stern was the Second Permanent Secretary at the UK Treasury.
He said that he had been surprised by how much support there had been in the Daimler office in Stuttgart for these "quasi-hysterical" policies that smacked of "Chicken Little" politics - referring to the US children's story in which Chicken Little runs around in circles saying "the sky is falling".
He said that he had been surprised by how much support there had been in the Daimler office in Stuttgart for these "quasi-hysterical" policies that smacked of "Chicken Little" politics - referring to the US children's story in which Chicken Little runs around in circles saying "the sky is falling".
If nothing else, Mr Jolissant's remarks illustrate the yawning gap between mainstream opinion on climate change among the educated elites of Europe and America.
If nothing else, Mr Jolissant's remarks illustrate the yawning gap between mainstream opinion on climate change among the educated elites of Europe and America.
But they are also consistent with the cynical view held by some in the US environmental lobby that announcements by car companies about the future development of green vehicles are nothing more than window dressing.
But they are also consistent with the cynical view held by some in the US environmental lobby that announcements by car companies about the future development of green vehicles are nothing more than window dressing.
Bigger cars?
Bigger cars?
On Sunday, GM boss Rick Wagoner told the world's press that there was "now an irrefutable business case for producing green cars" and that the company recognised that fossil fuels would eventually run out, or be in such short supply as to force prices much higher.
On Sunday, GM boss Rick Wagoner told the world's press that there was "now an irrefutable business case for producing green cars" and that the company recognised that fossil fuels would eventually run out, or be in such short supply as to force prices much higher.
At the same time, GM's chief economist - who last year forecast that oil prices would average $40 a barrel when in fact they topped $60 - was predicting that oil prices would fall this year as new oil supply came on stream.
At the same time, GM's chief economist - who last year forecast that oil prices would average $40 a barrel when in fact they topped $60 - was predicting that oil prices would fall this year as new oil supply came on stream.
Will a drop in the price of oil boost demand for larger vehicles?As a result, he argued, demand for big, gas-guzzling cars would recover.
Will a drop in the price of oil boost demand for larger vehicles?As a result, he argued, demand for big, gas-guzzling cars would recover.
Despite the fact that the chief economists have not forecast growth in US vehicle sales in 2007, after 16.5 million units were sold in 2006, they were more optimistic about their outlook than many Wall Street analysts.
Despite the fact that the chief economists have not forecast growth in US vehicle sales in 2007, after 16.5 million units were sold in 2006, they were more optimistic about their outlook than many Wall Street analysts.
One reason for their relative optimism was a remarkably sanguine view of the other economic risks facing the auto industry.
One reason for their relative optimism was a remarkably sanguine view of the other economic risks facing the auto industry.
There is widespread agreement that the US economy will slow next year, partly because of a sharp drop in house prices.
There is widespread agreement that the US economy will slow next year, partly because of a sharp drop in house prices.
But Ford's chief economist Ms Hughes-Cromwick said there was little to link house prices and auto sales.
But Ford's chief economist Ms Hughes-Cromwick said there was little to link house prices and auto sales.
She also argued that the US central bank, the Federal Reserve, was likely to cut US interest rates by half a percentage point in coming months to prevent the US economic slowdown turning into a full-blown recession.
She also argued that the US central bank, the Federal Reserve, was likely to cut US interest rates by half a percentage point in coming months to prevent the US economic slowdown turning into a full-blown recession.
This has not been the consensus view in financial markets, and in fact many analysts have stated that Ford would suffer most if the US economic slowdown was more severe than expected.
This has not been the consensus view in financial markets, and in fact many analysts have stated that Ford would suffer most if the US economic slowdown was more severe than expected.
And some, such as Sean McAlinden of the Center for Automotive Research, have warned that it could even push Ford close to bankruptcy.
And some, such as Sean McAlinden of the Center for Automotive Research, have warned that it could even push Ford close to bankruptcy.
Have you been affected by the global changes in the car industry? Perhaps you work for a car company or a supplier and are worried about your job?
Have you been affected by the global changes in the car industry? Perhaps you work for a car company or a supplier and are worried about your job?
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Or have you benefited by the shift of production to other regions? Send us your experiences using the form below:
