Chrysler's $2.99 Gas Deal

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Chrysler's $2.99 Gas Deal

Short-term solution or sidestepping a bigger problem?

Hot Potato by jshilad

Chrysler offering $2.99 gas for 3 years: short-term solution or sidestepping a bigger problem?

By now you've probably seen the commercials or heard through the grapevine about Chrysler's pitch: buy a Chrysler vehicle anytime between now and July 7^th (extended from June 2^nd) and the good folks at Chrysler will cap your gas bills at $2.99 a gallon for the next three years. Given the increasing public concern over gas prices, as well as Chrysler's concern over their slouching sales, the deal seems like a win-win proposition for all parties concerned.

Of course, any win-win proposition will attract a dose of skepticism. Not very often will you find the Union of Concerned Scientists and Marketwatch in agreement, yet both dismiss the gas deal as a "gimmick." And that's not even taking into account Chrysler's own caveat-laden description of the plan: participants are limited to 12,000 miles a year while under the promotion (anything over that quota and the normal gas rate applies), and using unleaded fuel with an octane rating higher than 87 incurs extra charges per gallon.

But for those of us who view the world through green-colored lenses, this promotion churns up some uncomfortable questions. Given the ever-expanding consensus about global warming, is Chrysler actually encouraging its customers to use more fuel? Does this deal make any business sense at all? Wouldn't Chrysler's profits and public image benefit more from a push to develop more fuel-efficient vehicles?

Why this gas promotion? And why now?

Of course, we're jumping the gun a little bit. None of Chrysler's ads even mention anything about CO₂ emissions or climate change; their only claim is that they're bringing relief to consumers hit hard by gas prices. But it's not just consumers who are being hammered by gas prices. The automakers are paying the price too, mainly because customers are running away from the gas-guzzling SUVs and trucks that have been so heavily marketed for the past decade.

So maybe this isn't about consumers at all, it's about Chrysler: faced with the prospect of thousands of unsold Dodge Rams and Jeep Grand Cherokees crowding dealership parking lots, they're looking for a way to get rid of products that have become dead weight on their profit margins. And, taking it a step further, in the long run this is a truly green-minded move in both senses of the word: if Chrysler increases their profits and gets rid of their fleet of gas-guzzlers, it would free them up to finally develop more fuel-efficient autos.

But why not start developing the fuel-efficient autos now? Why push a deal that ends up putting lots more gas-guzzlers on the road in the short-term, with predictable long-term effects on CO₂ emissions? Surely it makes more business sense to invest in a product that's already in high demand rather than to hedge their bets on something as volatile as gas prices, right? And maybe if Chrysler had gone a step further and started developing and marketing fuel-efficient vehicles a few years earlier, instead of, say, leading the lobbying effort against raising fuel-efficiency standards for autos, they wouldn't be in this crunch now. Alas, hindsight is 20/20, and given the economic climate now, fuel-efficiency will most likely take a back seat to the more immediate concern of gas prices.

A distraction, or a debate waiting to happen?

The issue of gas prices is a contentious one. While there's an increasing consensus on the need to reduce our fossil fuel consumption as individuals and as a society, the necessary reduction will certainly not come overnight, given how much our lives are molded by energy-intensive forms of technology. Driving less is a good idea, but what about those who don't have access to public transportation, or who live too far from their jobs for biking to be feasible? In the debate over climate change legislation, many people, whether they're friends of the green movement or shudder-inducing foes, claim that any laws reducing CO₂ emissions will raise fuel prices, adversely affecting the poor.

Right now it's too early to say what effect Chrysler's promotion will have on sales or their customers' driving habits. But as Americans start to make the long-term shift towards reducing their carbon footprints, they will also have to confront the facts: due to limited public transportation infrastructure and the short-sightedness of automakers, a large percentage of the population is still dependent on gasoline. The long-term benefits of increased gas prices coupled with decreased fossil fuel consumption may be tangible, but the immediate pain felt by so many people is undeniable, and Chrysler's latest consumer pitch encapsulates this debate.

Lessons learned from Chrysler

Those of us who dismiss this pitch as a shortsighted quick fix may need to start asking tough questions about reconciling sustainable living with day-to-day economic survival; otherwise, there will be a lot more quick fixes in the pipeline. What better time than now to start asking those questions and having that discussion?

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