A key reason for Detroit’s woes is that for decades they successfully fought efforts to build the kind of fuel-efficient cars the public has increasingly wanted to buy. Virtually all independent observers acknowledge that fact, but no conservative leader can. After all, they provided the political support and the votes that blocked repeated efforts by progressive to toughen federal fuel economy standards.
Denying their contribution to the current mess, however, is not enough for these master deniers. In the Alice-in-Wonderland world of conservatives, somehow a law passed last year to boost fuel economy standards to 35 mpg by 2020 — a weaker standard than China and Europe already have — is a key cause of the Big Three’s current troubles.
ThinkProgress has the surreal quotes:
– MITT ROMNEY: Well, government did [cause a lot of this]. There’s no question but that the CAFE standards have put an unusual burden on the domestic automobile manufacturers. And our energy policies as a country continue to put burdens on domestic manufacturers. That’s just — that’s reality. [11/19/08]
– WILLIAM KRISTOL: Well, one problem with the auto industry is we have been telling them how to operate an awful lot, you know, in terms of CAFE standards and other things, probably which should not have been most — may have been the most — not the most intelligent way to help that industry. [11/16/08]
– SEAN HANNITY: They [the government] — you know, between the unions, between trade policy, safety standards, CAFE standards, you know, economy, fuel economy standards, they’re forcing these auto companies to be in a position where they’re not as competitive. [11/14/08]
[Note to Sean: You're saying that requiring seatbelts and then requiring air bags killed the car companies? Really?]
I have another recent quote, from Charles Krauthammer:
Seriously. In Krauthammer’s Bizzaro World, mandates that haven’t been changed for a quarter century killed Detroit, not, say, Detroit’s monomaniacal pursuit of ever larger — and, yes, ever unsafer — SUVs, despite repeated warnings that higher oil prices were inevitable.
As for those blaming the 2007 law, how could fuel economy standards that only became law a year ago, impact the car companies profitability today? In fact, after no change in CAFE standards for over two decades, the car companies have more than enough technology today to meet the standards:
A 2002 report by the Board on Energy and Environmental Systems of the National Research Council found that technologies existed then that “would significantly reduce fuel consumption within 15 years” — technologies that manufacturers were “already offering or introducing” in overseas markets. What’s more, those existing technologies would hardly bankrupt the auto industry. NPR reported that technologies to raise fuel-efficiency “to around 33 mpg across the fleet pay for themselves within three to four years.” Indeed, Tom Cole of the Center for Automotive Research, said that with only about $1,000 worth of changes, “a conventional, gas-powered car could go 25 percent farther on a single gallon of gas.”
Given that avoiding catastrophic global warming will require plug in hybrids averaging 100 mpg, how will the conservative stagnation ever reconcile itself to the government led efforts needed to spur that automotive revolution?
Related Posts:
- Notes from the conservative stagnation, Part 10: Grover Norquist
- New GOP energy message — same as the old GOP energy message
- 64% of GOP voters say Palin is their top choice for 2012, 69% say Palin helped McCain
- Krauthammer, Part 2: The real reason conservatives don’t believe in climate science
- The Deniers are winning, but only with the GOP
- The intellectual bankruptcy of conservatism: Heritage even opposes energy efficiency
- The American Enterprise Institute: Still crazy with denial and delay after all these years
- The intellectual bankruptcy of the Cato Institute
- Can This Planet Be Saved? Not if conservatives rule
- George Will nails the difference between conservatives and progressives
Previous in TP Climate Progress
The lead sentence: A key reason for Detroit’s woes is that for decades they successfully fought efforts to build the kind of fuel-efficient cars the public has increasingly wanted to buy is wrong on the facts.
Detroit has long been and is now producing and selling fuel-efficient cars. I have owned many plus 30 mpg’rs and drive one now.
The key cause of the Big Three’s current troubles in achieving market share is that built into the cost of every car is the cost, not only of their 181,000 current employees, but also of their 450,000 retirees and 120,000 surviving spouses.
Contrary to this post, Detroit is the world leader in efficiency innovation. GM is currently tooling up for plug in hybrid production!
[JR: Seriously?]
Here are some assumptions under which I have been operating. They could easily be wrong, so feel free to correct me…
1) American car manufacturers have been paying higher labor costs due to union won contracts. (Now saying that unions are bad, just sayin’.)
2) “Efficient” in general means smaller, thus lighter and more aerodynamic.
3) Foreign car manufacturers, mostly Asian, could market a higher quality car in the US due to their cost advantage. They didn’t (until quite recently) attempt to enter the larger vehicle market.
4) In order to stay in business US car manufacturers served the large vehicle market niche where they didn’t have to compete against lower priced imports.
5) US manufacturers made some small vehicles in order to meet CAFE standards. They made little or even lost some money on each small, efficient vehicle that they sold.
6) I doubt that they developed any love for those smaller vehicles. And no love = no serious efforts to make them better.
7) Ford and Chevy saw the change coming. It takes several years to develop new models and both companies have hybrid models on the market. They started tooling up for those hybrids prior to $4 ($5 here) gas. Chevy has one of the most interesting “next generation” vehicles almost ready to sell – the Volt.
8) Both the manufacturers and unions have been dealing with the labor inequalities. New hires will not get the expensive packages that current union workers have. Some (all?) of the retiree benefit packages have been taken over by the unions, taking that expense out of the production costs.
Based on all that, I suspect GM and Ford were a couple of years from having their operations turned around when the financial markets collapsed. They were not responsible for the collapse, but are victims.
We have a lot of manufacturing capability in the upper MidWest. Throwing it, and millions of jobs, away rather than make some bridge loans makes no sense to me.
Rather, let’s keep these companies going. Let them continue their product line changes to more efficient hybrid vehicles and later to BEVs when the batteries are ready. And have them there to build the “boxes” we need for public transportation.
Sending our dollars overseas is not in our best interest. Better to have our dollars slosh around in our economy creating jobs and tax revenues.
(BTW, I drive a Japanese car. I’m not a Detroit driver/defender…. ;o)
(Oh, yeah. Hannity has his head up his butt (as usual) regarding the safety stuff. All cars sold in the US have to meet the same safety standards.)
Hum…
How did “Joe Cool” get into my post? I didn’t stick him there….
bob w.:
this is doubtful. it could have been true if the housing bubble hadn’t created a speculative construction boom creating a giant market for pickup trucks creating huge overcapacity for the US companies which they would have had to have dumped somehow. not as hard as this but by no means, easy.
ps. hint: 2) 4) 6) 8) 10) 12) 14) 16) 18) 20)
We are on the brink of a world wide leap in automotive technology that will make CAFE standards irrelevant. The question is can US manufacturers stay afloat until production capacity is realized. The Volt and the hybridizing of the entire product line including SUVs are no longer breakthroughs; they are reality.
we are on the brink of a world wide leap in financial technology that will make bank regulation irrelevant. the question is can anyone believe i am even trying to make this argument with a straight face.
The Volt won’t save GM or Detroit, unless it is a well-made, high quality car, because, be assured, Toyota and Honda will produce a PHEV that is all those things.
Detroit does operate at a disadvantage in terms of labor costs. One of the elephants in the room no one is talking about is health care costs.
Health care adds as much as $1000/car in the US. Countries that provide universal, single payer health care not only get better health care, but also get more competitive industries.
It would be possible to pay laborers a wage sufficient to put them firmly in the middle class; produce a high quality, competitive car, and rescue the US auto industry by doing two things — scaling back mid-and senior executive pay to levels comparable to what Japanese and European executives get; adopt a single payer universal health care system and take that monkey off the back of US industry.
Oh, we might need to train some engineers, too, so that we could build a high quality car.
But of course, that solution is anathema to conservatives — including, ironically, the idiots and ideologues who run the car companies. Just as global warming, energy efficiency, and peak oil seem to be.
At the end of the day, if we keep trying to live in the world as it was in 1950, we will never compete in the 21st century.
Paul K has it right. My Impala is bigger, prettier and faster than my friend’s Camry but gets the same or better mileage. (But repair costs have been pretty bad.) It doesn’t take as many people to build a car today, and GM has been losing market share. GM simply isn’t selling enough cars and trucks to afford the lavish benefits it pays to over 500,000 people. GM also needs to outsource research (or find another outsource) on batteries before the Volt gets left in the “slow lane”.
I think blatantly stupid neocon conclusions like the CAFE standards and safety regs being the demise of GM are what put Obama over the top. Kinda like ACORN causing the financial meltdown.
John – when people talk about labor costs they are typically including health care and all the other benefits that accompany the hourly wage.
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Bob Wright – I took a look at specs for the Camry and Impala.
Both 6 cyl. automatics…
Gas mileage 19/28/22 – 18/29/22 (Camry first set of numbers)
Curb weight 3483 – 3555 pounds
Length 189.2 – 200.4 inches
Height 57.7 – 58.7 inches
Width 71.7 – 72.9 inches
The Camry isn’t much smaller than the Impala, nor much lighter. Seems like GM did a good job to get roughly the same gas mileage with a slightly larger/heavier vehicle.
I’d guess any difference between your Impala and your friend’s Camry might be due to driving style. Or, perhaps aerodynamics plays a role.
It’s not so much how large a car is, it’s more about how much is weighs and how “slippery” it is. Large size does tend to influence aerodynamics.
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GM does not make its own batteries. It only very recently chose the manufacturer that they would use for the Volt’s batteries. Two companies had been vying for the account.
The choice was mainly based on the selected supplier having a longer track record and judged to be more likely to be able to deliver the volume of batteries needed in a timely manner.