Austere Detroit Looks To Electric Cars

Toyota Prius_Detroit Auto Show_011109
The Toyota display is seen at the North American International Auto Show Jan. 11, 2009 in Detroit. (AP Photo/Carlos Osorio)
AP Photo/Carlos Osorio

After a dismal year, Detroit is trying to generate some electricity at North American International Auto Show there, CBS News business correspondent Anthony Mason reports.

Chrysler unveiled the prototype for an electric sports car. GM rolled out the Chevy Volt again and announced plans to build a factory to make the lithium ion batteries that will power it.

"This a further demonstration of our commitment to the electrification of the automobile," said General Motors' CEO Rick Wagoner.

The electric car is coming. The question is: how soon?

"Its about where personal computers were back in the early 1980s," said auto analyst Brian Johnson. "Clearly it's the next big trend. How fast they take off is anybody's guess."

Electric may be the future, but first Detroit has to get past the present. This is a distinctly more austere auto show.

Last year, Chyrsler drove cattle through the streets of Detroit to launch its latest truck. This year, "We left the cows behind. It's a bear market, anyway," as Jim Press, the president of Chrysler, said.

The industry, which sold a record 17.4 million cars in 2000, sold just 13.2 million last year. Analysts say that could fall to 11.4 million this year.

Can an automaker survive if the industry is selling 11 million cars a year?

Robert Lutz, vice chairman, GM, said, "There is a question of whether any automobile company anywhere in the world can survive at a consistent $11 million industry level. Now if it continues, I would see massive consolidations in the industry. Massive shut downs. Massive layoffs."

And a bailout from Washington could get very expensive.

John Casesa, an auto industry analyst, said: "If demand doesn't pick up, it will cost anywhere from 50 to 100 billion dollars to underwrite Detroit for the next two years."

So the fate of the industry is in the hands of the Obama administration, which may have to decide not just how much taxpayers are willing to invest in the auto companies, bug what the industry it saves is going to look like.

  • Anthony Mason
    Anthony Mason

    CBS News senior business and economics correspondent; Co-host, "CBS This Morning: Saturday"