GM Urges Dealers to Oppose California Waiver
by Andrew Posner, Rhode Island, USA on 02.10.08
General Motors, already unhappy about the new CAFE standards, is even less happy about the fact that California wants to impose even more stringent standards. And while the EPA has denied the waiver it needs to do so, California is challenging that decision in court. The possibility that California will win , combined with the new federal standards and increasing consumer demand for efficient vehicles, has backed GM into a corner. Nowhere was this more clearly seen than at the four-day National Automobile Dealers Association (NADA) convention, where GM's CEO Rick Wagoner urged dealers "to lobby against individual states trying to set their own limits on greenhouse gas emissions," and instead arguing for "the importance of tough but national standards." Of course, we've heard this kind 'patchwork' argument before, and know it to be false: under the Clean Air Act, California may enact stricter standards, and states may choose to either adopt the Federal Standards, or the California standards. In other words, the result would not be a patchwork, but rather two standards.
Much as Toyota has not always walked the green walk, GM's words ring a little hollow. They want tough standards, so long as they aren't too tough. What's more, Mr. Wagoner claims that if California's standard goes into effect "and automakers must focus on state regulations, they won't be able to focus as much on alternative fuel vehicles to reduce oil consumption and pollution." He hopes that dealers will help GM in its lobbying efforts to prevent California from getting its way. "Dealers are very effective in the political process because we don't have a plant in every state," he said. But "we have dealers in every state."
We understand that corporations are reluctant to embrace regulations they feel will hurt their bottom line, but we've become very skeptical of the argument that any regulation will kill an industry. Mr. Wagoner is even claiming that with a California standard in place "we're not going to be able to accomplish everything that we otherwise could." Of course, members of the US Climate Action Partnership (US-CAP) seem to think that the risks of inaction on climate change outweigh the costs of action, and the companies that comprise US-CAP aren't exactly lightweights. It's time for GM to stop claiming it doesn't have the capacity to meet the engineering challenge of making cleaner vehicles, and start taking advantage of American ingenuity and entrepreneurship. After all, what's lost in all this talk that we can't solve climate change is the fact that Americans pride themselves on their ability to meet great challenges. The real question is, why is GM spending so much time telling us it can't tap into that well of talent, knowledge and energy to turn itself around and become a leader on this issue? That's bad for shareholders, the climate, and workers.
Via: ::Yahoo! Green
See Also: ::For GM, The Cars Are Greener on the Other Side, ::GM Banks on Coskata's Cellulosic Ethanol Breakthrough, ::Conceptualize This: GM Unveils Yet Another Concept Car, ::Sorry Detroit, Heavy Cars Are Not Safer and ::GM Keeps Its Greener Cars Out of America
Crocodile tears for GM.
Do they not realize that focusing on alternative energies WILL meet the more stringent standards? Or why not just overshoot them all and focus on beating the proposed standards and - as stated in the article - leading the industry?
This is where it proves that having an industry controlled by the proverbial "old boys club" really just emphasizes their fear of change -- and the possibility of losing their station.
New blood. New Eyes. New Minds. Fearless ingenuity. That's what America was built on and that's what will save the car industry. Not fighting new standards, not churning out gigantic oil-guzzling machines. Fearless ingenuity. It's the American way.
Shame on GM.
Every year they introduce another 'muscle' car?!
Is it really a muscle car, or perhaps 'fallic' car?
When will GM, and Ford; Chrysler, for that matter, start redirecting the money they obviously have into what we obviously need? Divert just a pittance of their muscle-car marketing budget and imagine the possibilities.
GM has the power, money, and resources to make every one of their cars exceed CAFE standards, and we're supposed to feel bad for them because putting money toward any real progress might hurt their profits for a year or two?
As much as I'd like to buy American, the American auto companies are even worse than Toyota as far as greenwashing is concerned. GM's hybrids hardly have any advantage over the standard models, fuel economy from even their smallest car (Aveo) is disappointing, and they continue to hype the Volt even as they admit it'll be too expensive to become the ultimate green car. A couple of cars that can run on E85 (which returns worse gas mileage and is difficult to find) do not make GM "gas-friendly to gas-free."
While Toyota should be ashamed that their most fuel-efficient car gets about the same mileage as any traditional European subcompact, GM isn't even TRYING to make efficient cars that people can afford to drive. It's unfortunate that the government has so much sympathy for whiny corporate execs.
GM wants the dealers to do their dirty work? I'd really like to see California dealers break California law and endanger their solvency in order to safeguard the solvency of GM. California dealers are not GM's puppets; they will do what is in their own best interests - not GM's.
I am going to play Devil's Advocate for a moment. GM is, arguably, further along in the development of a true electric car alternative than any other major auto manufacturer. The main hang-up is batteries (specifically, batteries that will behave exactly as needed), which happens to be another category that they are much further along than any other major manufacturer.
It is reasonable to argue that regulations on emissions will force them to move engineers from that project to try to clean up the current vehicle options. And, ultimately, the question comes down to whether a re-design of current vehicles is more beneficial than having their engineers continue with the vastly better (environmentally) vehicles they have in the pipe. In theory, it is better for them to continue the aggressive design work of the Volt than to attempt to make small improvements to the current vehicle line-up.
However, I think it is reasonable to ask 'why can you not do both?' It is also reasonable to question whether this is purely politics and there is not an ounce of truth in it.
That said, I am convinced the most important thing the American auto industry is doing right now is the Volt. Anything that will delay the technology that is being introduced in that vehicle is not in our best interest.
And you wonder why states like Washington want to impose a tax on fuel efficiency. GM and other automakers want to fight the future.
When I read stories like this it reminds me why I've never bought an American vehicle & probably never will, although I'm wary of saying never. GM is an embarrassment for the United States & I can't imagine them doing anything differently, they've ALWAYS dragged their heels at any type of change that would benefit the public & get this, ultimately benefit themselves. While the rest of the world gets on with it, GM prefers to remain a dinosaur. Is there any difference between Philip Morris & GM?
If CA were really concerned about emissions, it would have planned for, designed and implemented world-class mass transit for it's smog-ridden cities.
But alas, CA wants other people/corporations to clean up the mess from its lack of planning and its lack of willingness to pay for its own mess.
Pony up the money and build a transit system that people want to use instead of their cars.
"If CA were really concerned about emissions, it would have planned for, designed and implemented world-class mass transit for it's smog-ridden cities."
Well said! :)
"Every year they introduce another 'muscle' car?!
Is it really a muscle car, or perhaps 'fallic' car?
When will GM, and Ford; Chrysler, for that matter, start redirecting the money they obviously have into what we obviously need? Divert just a pittance of their muscle-car marketing budget and imagine the possibilities."
Chevy Aveo that sells for ~$10k results in less than $10k in dealer and GM profit.
SUV/Muscle car that sells for ~$40k + absurd options can result in MORE than $10k PROFIT for the dealer and GM. It's a no brainier, you make high profit margin cars as long as you can and hope you don't make them for TOO long.
IMHO, the BMW Mini was a brilliant design in that it got people to love a small car, and a small car they could assign a fairly hefty price tag to (I have no idea if this is a high percentage profit margin car or not, but you get the idea).
Are Hybrids low or high profit margin relative to small compact cars, or even compared to SUV's? Remember, this is business, and the bottom line is, well the bottom line.
Major Oil companies own shares in the domestic automakers, more so than the average person on the street. It's not suprising they don't want to improve fuel economy. It might cut into their revenue stream.
As far as that "when the right batteries come along" arguement, they've already come. The large format NiMH batteries that GM bought controlling interest in and then sold to an oil company when they (literally) scrapped their EV program.
Finally, if the EV-1 could do over 100 miles with it's late 1990's battery pack, are we expected to believe that the engineers forgot how to make them. What, nobody wrote the concept down and they're all too stupid to remember. Shame on GM.
Maybe an independent will come along and put them out of business while they continue to claim it can't be done. The "Big Three" embarrass us on the world stage.
"If CA were really concerned about emissions, it would have planned for, designed and implemented world-class mass transit for it's smog-ridden cities."
we here in CA used have those actually.
Then the auto companies lobbied for the public sale of these, as opposed to a government owned monopoly. the Auto companies then bought up these companies, liquidated them, and sold us the new concept of the Freeway
Don't forget the power of the private lobbying industry to get in their way.
Thornhill GM in West Virginia?
Oh, sad 'ole GM. Refusing change is just what they need to cripple the aging car company even further. How far down the rabbit hole will they travel before someone (govt??) has to try to dump money in to bail them out. Hopefully, GM still has their government contracts because I have no idea who else is buying those lackluster, uninspiring hunks of rolling metal. One word: EV2! And this time, let the people keep them.
What confuses me a little bit here is the fact that GM already has to make a lot of their cars different to sell in the CA market anyways. Go to the GM website and 'build a car', when you get in far enough you'll hit a section about California emissions and equipment.
What will probably happen in the long run will be that auto manufacturers will tweak and tune to get the best possible mileage from the EPA tests for certain models, but offer better powered models in states that don't have such strict rules.
Another thing that gets me is that people will simply buy cars out-of-state and bring them in to CA anyways. Police departments did something like this when Ford stopped selling the 351W-block engined cars in the US but they still sold them in Canada. They went to Canada, bought a bunch of 351W cars, brought them down and use them.
Oh well. At least we are feeding the 'GM is evil' crowd something to keep them foaming at the mouth.
-Lego
Do you remember when VCR's and then DVD players were $1000.00 each??
When camcorders were a camera and a huge recorder that you had to put over your sholder?
If fuel prices continue to stay at $3 per gallon, there will be a demand for more fuel efficent cars and trucks, and we don't need government regulation to make people do anything, the market will change all by itself.
If GM or Ford won't do it then another company will do it, like the Aptera and Telsa, but as companys find that the demand for these products is high the prices will come down and the technology will continue to impove, like eestor with its new energy storage device(we all hope!).
Should we rely on govt for out transportation? Look at any gov't program and all the mismanagement with money and rescorces overbudgets, and constant raising of taxes to support their corruption. To me it is insanity to think that the gov't will do anything right so we must be patient and rely on market forces.
In the future if I own a business in California and I need to own a 1 ton deisel pick up truck to do business, and extra taxes and fees I have to pay to our already bloated bureauracy, will be passed on to the consumer, and end up costing for money for the client and less proffit for the business person. That business person might think, with all this regulation, why am I trying to do business in California bwith all these challenges? I think I will leave and do business elsewhere. This means loss of jobs and competition which will inevidably drive costs through the roof, which is very bad for the consumer
As of now, companys are just realising the proffit potential of building efficient vehicle. The money consumers will save for fuel is a driving factor in the sale of these vehicles.
As we can see the new technology is being used and efficiency and costs are starting to come down. Nano technology for batterys and solar cells, new ways of thinking for storing energy and producing it.
There are batterys on the market that are 10 minute charge and have a 130 mile range but they cost $20,000. Don't fear remember the 1000VCR! Lets stop giving away our hard earned money and freedom to big government, which we all can agree is bloated, wasteful and corrupt, and be patient and save it for a day when technology catches up with demand and we have an electric car that meets all of our needs. IT WILL HAPPEN!
What are you guys talking about? The reason why GM doesn't want the CA rules to go through because they don't want to make a different model car for every state, which is more than reasonable. Also, GM always gets a bad rap from everybody for buiding trucks and SUVs, but it's not like Toyota doesn't (anybody ever see a Toyota Tundra--just as gas-guzzling as anything Detroit makes), it's just that the American car companies are just better at selling SUVs and trucks than Toyota.
Josh and JC:
I believe the Prius is sold at a small loss, and subcompacts generally make profits in the hundreds of dollars. That's why American cars lagged so far behind for so long--mostly because of the UAW, the American auto industry couldn't make a profit (litterally, some were sold at a loss), whild SUVs and trucks make thousands in profits per vehicle.
"I believe the Prius is sold at a small loss"
The Prius is now said to be making a small profit (if you don't include the hundreds of millions - maybe billions - of dollars that they lost during the first 7 years of production). I read that when the first Prius was produced, Honda engineers estimated that its cost was twice its $25,000 price. A few years ago I read that their per unit loss was down to about $1000, which at over 100,000 units per year was still more than a $100 million dollar loss. Toyota recently said that the Prius was now profitable, but I think by that they meant that its cost to produce is below its price, not that it had generated enough revenue to net a profit overall. In the US Toyota's profit comes mainly from the larger cars, trucks and SUV's and Lexus product line.
"and subcompacts generally make profits in the hundreds of dollars."
I believe that should read "foreign subcompacts generally make profits in th hundreds of dollars." As mentioned, with UAW obligations domestic production costs are higher than foreign manufacturers, even those that build vehicles in the US, because they are not organized under UAW, and the domestics' costs continue to increase at a higher rate.
Two decades of low fuel prices have pushed the market value of efficient vehicles in the US market to below the minimum cost to manufacture with UAW organized labor. To meet CAFE requirements, domestic manufacturers are forced to sell their compact products at substantial losses. Manufacturers don't like to disclose speciifcs, but a recent estimate of loss for the Ford Focus, for example, is $4000-$5000 (yes, thousands) per unit sold in the US. That's why the domestics push the larger vehicles. They are the ONLY products on which they make profit.
There is relief down the road under the recently signed contracts, but the benefits will not be seen for several years. In the meantime Chrysler, Ford, and GM will struggle to stay in business, and unfortunately they will depend on "gas-guzzlers" until the American buyers are willing to pay more for efficiency.