Car companies dig their own graves again....

[webbie]

Here they go again.....

After 20 years of virtually NO increase in the gas mileage of the US fleet, our car companies are once again trying to head off or water down modest increases in the standards:

" AP
Auto Execs Go to Hill to Discuss Mileage
Wednesday June 6, 8:15 am ET
By Ken Thomas, Associated Press Writer
Auto Execs Visit Congress on Wednesday to Try to Head Off Higher Fuel Economy Standards "


I assume they will win their case as usual, string it out way into the future with a watered down bill. Makes you think these dudes are sitting in a board room with Osama.....it's a national disgrace that even when we clearly see the results of our poor energy policies, we are still not willing to change them!

This is another great place for US to vote. If we buy only the cars with the best mileage, they will either have to put up or go out of business (ala Chrysler). I already own some Toyota stock....I think I will purchase some Honda if the price is right.

 

[TMonter]

I have no problem with them making bad decisions as long as our government doesn't prop them up when they go bankrupt. Let them make less efficient cars, they simply will continue to lose market share.

 

[webbie]

Ah, if only it were that simple - but, yes....while they are on the hill for these sessions they are lobbying government to allow them to dump all their commitments to health care (promises they already made!). In plain English, that means they want to stop paying people pensions that they earned and make the government foot the bill in some way or another.

So their decisions are more than simple business ones. You only need to take one look at Detroit to find out that failed business decisions end up doing a lot more harm than making companies lose market share!

 

[TMonter]

Ah, if only it were that simple - but, yes....while they are on the hill for these sessions they are lobbying government to allow them to dump all their commitments to health care (promises they already made!). In plain English, that means they want to stop paying people pensions that they earned and make the government foot the bill in some way or another.

Which makes it a government failure then Web. They should not be allowed to back out on their contracts. This is why government should not be involved in business. If the government tomorrow said "sink or swim, but you still have to honor current contracts" then I guarantee Ford, GM, and Chrysler would clean up their act.

You only need to take one look at Detroit to find out that failed business decisions end up doing a lot more harm than making companies lose market share!

That doesn't mean however that we should prop up those businesses, regardless of the number of employees laid off.

 

[webbie]

Of course government should not be building cars, but that is where the "lead" in leadership comes in. The government should (we all seem to agree on this) not allow companies to back out on their promises to employees.....AND, in this case, the government should see what is coming up the pike (the need for cleaner and more efficient transportation) and help the car companies understand this (with a carrot or a stick). It then becomes a win-win-win situation, because the car companies produce higher mileage cars, which are in demand (sell), and then can pay their obligations and also a lot of taxes....and the air stays cleaner, etc. etc.

I think we agree that this will not happen, so it is obviously a failure of business to be able to see more than one year into the future......what irks me is that business goes to DC and asks the lawmakers to give them larger shovels to dig their graves with!

 

[restorer]

Correct me if I'm wrong, isn't the efficiency based on across the board ratings as total units sold. That allows manufacturers to build the huge gas guzzlers that are a big part of the profit and sell fewer of the high efficient ones. Now that standard trucks to 1 Ton are counted. Why oh why are they not changing their manufacturing practices and building more of the effiecient vehicles.

If they are adding on the modifications to their labor contracts through some legislation they are certainly doing the wrong thing. It will be a big, how to put the Democrats in office to the point that they can override everything without help. That will simply galvanize all unions to defend all members.

 

[webbie]

The profit is in taking a 14,000 pickup frame, adding sheet metal and options, and selling it for $35,000 (SUV).

It would be as if the stove industry all of a sudden could enamel 55 gallon barrels, put volgelzang doors on 'em, and be granted exemptions as well as customer incentives (business has incentives to buy SUV's) to buy them! Wouldn't we think such a thing would be ridiculous?

It is a lot harder for the car companies to think, plan and invest than it would be for them to just enamel some old barrels.

Unions as a whole are pretty much dead for now, and I don't expect any resurgence, but promises made by companies to workers (unions or not) should be enforced. When those workers get the rug pulled out (which is happening big time already), guess where they go to make up the difference? They go to medicare, medicaid, extensions of unemployment, government subsidized training programs, etc. etc.

As far as CAFE standards, they have not really changed in 20 years.

-----------------------
Are any vehicles exempted from CAFE standards?

Light trucks that exceed 8,500 lbs gross vehicle weight rating (GVWR) do not have to comply with CAFE standards. These vehicles include pickup trucks, sport utility vehicles and large vans.

----------------------

Lighter trucks (under 8500 GVW) and suvs are included in the average. Manufacturers can build a certain amount of these vehicles as long as the average calculated MPG of the fleet meets the regs.

BUT HERE IS WHERE THE BIG LIE IS.....

# What is meant by “maximum feasible fuel economy standards?”

Congress specified that CAFE standards must be set at the “maximum feasible level.” Congress provided that the Department’s determinations of maximum feasible level be made in consideration of four factors:

(1) Technological feasibility;
(2) Economic practicability;
(3) Effect of other standards on fuel economy; and
(4) Need of the nation to conserve energy

-------------------------------------------------------------------------------

Anyone with 1/2 a brain knows that our current CAFE standards are not at the "maximum feasible level". When the EPA standards for wood stoves were under discussion, the government made certain we used BAT (best available technology) to set these. In other words, the current EPA standards for stoves represents very close to the best that can be expected with current technology (within reason).

So, the car manufacturers are telling us that in 20+ years of R&D and advances, we should not be able to expect an improvement?

 

[Charlie Z]

I had an '83 civic that got a lot better gas mileage than the present model (I think it even had a carburator)and the Tundra pickup (would Toyota be moving into your wasteful high-profit truck market there, Web?) and those Q-whatever models are pretty guzzly. Sounds like your honest japanese makers aren't living up to your standards.

Tundra mileage discussion - 14-17mpg (http://townhall-talk.edmunds.com/direct/view/.ef55111!make=Toyota&model=Tundra&ed_makeindex=.ef55111) makes my old F150 sound pretty good...

Bad mileage and you get to send those high profit margins overseas to do your part to damage our economy... ah, that doesn't sound too good to me.

 

[restorer]

This gives a lot of detail in a few words:

(broken link removed to http://tinyurl.com/2dc6d4)

 

[jjbaer]

Ah, if only it were that simple - but, yes....while they are on the hill for these sessions they are lobbying government to allow them to dump all their commitments to health care (promises they already made!). In plain English, that means they want to stop paying people pensions that they earned and make the government foot the bill in some way or another.

So their decisions are more than simple business ones. You only need to take one look at Detroit to find out that failed business decisions end up doing a lot more harm than making companies lose market share!

Web,

they've already done most of this.......effective 1 Jan 2006, GM white collar employees hired after 1 jan 2001 were moved from a defined benefit to a defined contribution plan.......GM white collar employees hired after 1993 will NOT get medical benefits when they retire.........GM caps its medical contributions to retirees and those white collars hired after 1993 at 2006 levels..... so GM has hammered the white collar force but has done virtually nothing to the hourly workforce.......so.......if they go bankrupt it's their own damn fault........