Mercedes Fined Over $29 Mil For Lousy Mileage
by Lloyd Alter, Toronto 
on 01.12.09
Whenever I suggest that perhaps one reason Detroit got into trouble is that they were building the cars that people actually wanted in a country with cheap gas, I get told to move to Europe or Japan if I like expensive gas so much. Or that the transplants and foreign manufacturers are so much more responsible in offering smaller, more efficient cars.
That's why Mercedes-Benz just got hit with a whacking $ 28.9 million fine for failing to meet the CAFE standards last year. That other paragon, Volkswagen, got hit with $ 4.5 million dollars.
Mercedes could have left the big cars and engines in Europe and just brought the fuel efficient cars over and easily met the standards. Volkswagen could have left the Touareg in the mountains of Bavaria. But hey, when gas is cheap and people want big cars, we are not going to miss that market just because of the stupid CAFE rules, are we?
No, Lexus and Mercedes will sell all the big gas guzzling SUVs that the rich people in America want. Look in any upscale parking lot and that is all you will see.
The recent fines prove once again that the problem isn't in Detroit; it is in Washington. Price gas appropriately and everybody, even Detroit, will be selling small cars.
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What I wonder about those fines is how the amounts they had to pay for not meeting CAFE standards compared to the profits they made selling those gigantic things in the states. I wonder if they consider the fines just the cost of doing business?
The problem isn't 100% in Detroit, but Detroit does have issues. The recent talk of the hourly expenses of the various automakers shows that the unionized labor that the big 3 use is a serious expense, especially when it comes to benefits and retirement costs.
This isn't exactly new news. BMW, Mercedes, and others like Porche have been paying fines for years for failing to meet standards. They don't care, they just pass it onto the consumer.
Assuming Mercedes sells about 200,000 vehicles a year in the US and that my math is correct, a 29 million dollar fine ends up costing Mercedes $140.00 a vehicle. I don't see how this could be much of a burden to Mercedes. Maybe part of the problem is with the EPA?
"I wonder if they consider the fines just the cost of doing business?"
Absolutely.
http://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy
Do the math, it's pocket change compared to big car profits. All of the $5-10k off MSRP stickers should give a clue to the huge amount of profits
@ Becky
They very well may have. for sure as hell VW did. Merc may have done so as well, being Merc.