U.S. firms wasted no time shifting toward light-truck production. In the new economy, business profitability is supposed to be gained through the use of novel, high-tech capabilities that allow for continuous product development and manufacturing, a previously unattainable goal. But U.S. auto industry growth in the last decade took an almost exactly opposite turn. By late last year, the favorable market conditions that enabled short-term U.S. manufacturing successes were rapidly eroding. The most important condition was cheap, plentiful fuel.
Light trucks are far less efficient than passenger cars.
Volatile gas prices would have curtailed their sales. After the Gulf War, however, Americans could freely import as much oil as they wanted from grateful Middle East emirates. Like the 1950s, it just didn't seem to matter if vehicles became steadily bigger and heavier, or if average U.S. fuel economy dropped to its lowest level in 20 years. Also crucial was the continued relaxation of light-truck pollution and safety regulations. Originally intended to lower costs for farmers and small businesses, Congress never dreamed that these provisions would be used to evade more broadly applicable consumer-vehicle standards.