Congress: Look in the Mirror Before You Abandon Detroit
cute little fuel efficient Japanese car
When I last wrote about how Suburbs + Cheap Gas = Big American Cars and suggested that as long as gas was cheap Americans would keep buying big cars, I was roundly criticized. Only one commenter sort of got the relationship when I suggested a big honking gas tax was the answer:
The sales figures clearly show that left to our own devices, most of us prefer an F-150 (or in my case, a Nissan Titan) to some crap-tastic, over-priced sissymobile. You don't like Prius sales figures? Well, then why don't YOU put your money where your mouth is, and YOU can own one. I don't tell you what to drive, so I'll thank you to keep your nose out of my business. Left-wingers (whingers?), like Lloyd Alter are always eager to use endless government meddling and regulation to force the rest of us into line. Tell you what Lloyd, if you think life in Europe or Japan is so great, why don't you move there?You think I want meddling, what about the New York Times editorial page?fuel sipping (17 MPG City) little Honda
Before giving General Motors, Ford and Chrysler the money they need, Congress should require much tighter commitments on fuel economy.It should establish a stringent system to ensure compliance and demand that top management be replaced.
G.M. said it would offer 15 hybrid models by 2012. Its Chevy Volt, which can travel up to 40 miles on electric power, is scheduled for production in 2010. Chrysler also said it would offer an all-electric automobile. Ford said it would cut trucks, vans and sport-utility vehicles to 40 percent of its portfolio from 52 percent in three years and would put more fuel-efficient engines in most of its cars.
Congress should ask for more. There are solid grounds to mistrust Detroit’s Bit Three. As the price of gasoline drifts back below $2 a gallon, they face a powerful incentive to slip on the drive for better mileage and new fuels and to fall back on the gas-guzzlers they know. (emphasis mine)
They admit it- if gas is cheap then the Big Three are going to "fall back on the gas-guzzlers they know." No talk from Congress and the New York Times about putting a floor price on gas to create the conditions where people want small cars. For once I have to agree with the Wall Street Journal:
Congress must revisit one of its own special-interest shibboleths if it really wants to save Detroit. Requiring car companies to meet corporate average fuel economy (CAFE) standards forces them to lose money on small cars that people don’t want so they can sell big cars that people do want, at least until gas prices soar out of sight. Proof positive came last month, when the Toyota Sequoia and Honda Pilot SUVs posted big gains while sales of most other cars plunged. The obvious reason: gasoline prices plunged too.Useless 65 MPG Ford Fiesta from company that can't build small fuel efficient cars
The reason Europe has fuel-efficient cars is high gas prices, not CAFE laws. What’s more, the only times that Americans have switched to smaller cars is 1973, 1979 and the spring of 2008, when gas prices here were high. So the time has come for Congress to stop pretending that fuel-economy can be legislated and to put market forces to work. That means raising gasoline taxes — offset by cuts in income taxes and by gas vouchers for needy people. These measures would succeed at raising fuel economy and in reducing automotive emissions where the CAFE law has failed.
We know that the American car manufacturers can make small, fuel efficient cars in a unionized environment; they do it in Europe. Blaming them for not being competitive in America with small, efficient cars from companies that make them all over the world in the single big market where gas costs two bucks instead of six per gallon is just dumb.
Lend them the money to survive this downturn and retool; get it back by adding a gas tax that makes small cars attractive in America. And stop blaming the car makers when you don't have the guts to keep gas prices stable and high enough to incent American buyers into small cars.