END OF AN ERA? It looks like Toyota is on track to pass GM as the world's largest automaker next year, and last month, they passed Ford to become America's second leading car company. Their second quarter income rocketed up 39.2 percent, and their July sales increased by 12 percent. GM and Ford, meanwhile, saw sales drop by 23 and 24 percent, respectively. I hate to harp so often on this point, but it remains true that unions are not the ill racking GM and Ford -- it's their inability to make cars that people want to buy that has so hampered them. Toyota's sales are being driven by fuel efficient autos (Corollas are up by 37 percent, Priuses by 15 percent), while GM and Ford's drop comes anchored to losses in their trucks divisions. Over the last couple of decades, the American automakers bet on power and size, leaving wimpy efficiency up to their Japanese competitors. They bet wrong. And they're paying dearly for it. But, speaking as a Ford owner whose car posts dismal mpg readings, I, for one, welcome our new Toyota overlords.
--Ezra Klein
