Thursday, July 09, 2009

GM's Last "CAFE"

CATO's Alan Reynolds in the July 2nd Wall Street Journal:
General Motors can survive bankruptcy far more easily than it can survive President Barack Obama's ambitious fuel economy standards, which mandate that all new vehicles average 35.5 miles per gallon by 2016.

The actual Corporate Average Fuel Economy (CAFE) results will depend on the mixture of fuel-thrifty and fuel-thirsty vehicles consumers choose to buy from each manufacturer -- not on what producers hope to sell. That means only those companies most successful in selling the smallest cars with the smallest engines will, in the future, be allowed to sell the more profitable larger pickups and SUVs and more powerful luxury and sports cars.

Sales of Toyota's Prius, Yaris, Corolla and Scion, for example, allow and encourage Toyota to market more Lexus 460s, Sequoia SUVs and Tundra pickups in the U.S. without incurring fines. Hyundai's success selling Accent and Elantra compacts allows it to sell 368-horsepower Genesis sedans. . .

General Motors is likely to become profitable only if it is allowed to specialize in what it does best -- namely, midsize and large sedans, sports cars, pickup trucks and SUVs. The company can't possibly afford to scrap billions of dollars of equipment used to produce its best vehicles simply to please politicians who would rather see GM start from scratch, wasting more taxpayer money on "retooling" to produce unwanted and unprofitable subcompacts and electric cars. The average mileage of GM's future cars won't matter if nobody buys them.

Politicians are addicted to CAFE standards because they create an illusion of doing something sometime in the future without voters experiencing the slightest inconvenience in the present. Tighter future CAFE rules will have no effect at all on the type of vehicles we choose to buy. Their only effect will be to compel us to buy larger and more powerful vehicles from foreign manufacturers. Americans will still buy Jaguars, but from an Indian firm, Tata, rather than Ford. They'll buy Hummers, but from a Chinese firm, Tengzhong, rather than GM. The whole game is a charade; symbolism without substance.
(via Planet Gore)


OBloodyHell said...

> The whole game is a charade; symbolism without substance.

And this is different from decades of libtard SOP how?

Results don't matter, only how it makes you "feel". "Duh", "Duh", and "Double Duh".


Trialdog said...

I am dumbstruck when I carry a gallon of milk out to my full size F150. I hold the gallon of milk up and gaze at my amazing truck. That truck will travel 17 miles on just one gallon of gas. It is a miracle.
It is unfortunate our President is a simplistic ideologue.
GM and Chrysler are done. They may be subsidized for a while, but they are done.
There is another thing the statists don't realize while they are busy planning our lives. That is people like me. Always dedicated and loyal to GM, I sporadically own Fords too. I'll never buy a GM vehicle again. Many other people will not either. I'm not buying a government vehicle. Ever.

Carl said...

OBH and Trialdog:

Agreed. And see this:

"June sales figures show that GM’s hottest product was -- not the government-favored small Chevy Aveo or any of the company’s eight hybrid models -- but the testosterone-pumping muscle car, the Chevy Camaro."

Carl said...

From the July 8th Investor's Business Daily:

"It's much the same effect we saw when the Corporate Fuel Economy Standards were passed in the '70s. Aside from forcing us into less-safe downsized vehicles that increased highway fatalities, the promise of more miles per gallon caused people to drive more miles. The promised energy independence never materialized as we imported more foreign oil than ever before."