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Hooray for Ford! Detroit News, Get Some Clues April 25, 2008

Posted by davidzweig in Energy.

I suppose the only thing worse than being in the newspaper business these days, is being in the newpaper business in Michigan.

The state is thoroughly depressed, and not just economically. Unlike Ford Motor Company, whose CEO Alan Mulally continues to work his magic by embracing reality, the Detroit News remains as mired in the Permian Age as does Ford’s crosstown rival. (Hint: it makes Buicks.)

An editorial “New fuel economy rules unfair to auto industry” in the April 23 edition says it all. Nevermind the standards are decades overdue, and might be decades delayed as were their predecessors in the late 1970s. The illogic and unreality behind the editorial, which speaks for certain automakers and definitely for certain chairmen of the House Energy Committee, is appalling.

If the car industry had adopted the same can’t-do attitude in 1941, we’d all be driving Volkswagens now.

“General Motors has said meeting the 2020 fuel mandate could add $6,000 to the price of a vehicle and require a shift to more hybrid vehicles, while Ford has said it expects to change its lineup to include smaller and lighter vehicles.”

My comment: good on you, Ford! The Explorer not sustainable? Do ya think?

“As the experience of the last few months and the oil shocks of the 1970s have demonstrated, gasoline prices are far more effective than fuel economy rules in shifting consumer demand toward more fuel efficient vehicles.”

Gas consumption has fallen, but not nearly enough. We’ll get a gas tax passed in this country only when the last molecule of shale oil is wrung from deposits under West Palm Beach, Florida. Until then, we had better have a different Plan A.

“The federal government instead continues to draw a bead on the auto industry and is doing nothing to ensure that there will be a market for the smaller, lighter vehicles its fuel mandates will require if gasoline prices decline from their current levels.”

Time to shed the victim mindset, and make a high mileage car that people want to buy.

“Nor has Congress adopted language that would pre-empt states such as California and more than a dozen others from imposing even stiffer fuel economy standards on the industry — balkanizing the auto market and adding even more costs. The administration should make it clear that there will be one national fuel economy standard set by the federal government — not a number of different states.”

A canard, because these states want to impose a single common standard. The states, led by a Republican governor, are acting precisely because the current temporary occupants of the White House will not act. If the Detroit News had not endorsed the current president back in 2000,  perhaps they would not have to take this silly position in 2008.

“In nominal terms, national gasoline pump prices are at record highs, though adjusted for inflation they are below 1979 levels. And analysts note that the relatively high gasoline prices are causing motorists to cut back on driving and gasoline consumption, prompting some to suggest a return to $3-a-gallon prices.”

This is risible. If Americans drive less, it doesn’t mean Chinese and Indians are likely to follow suit.  Chinese citizens bought almost 9 million cars last year, a 21% year-over-year jump. They are now the world’s second-largest car market.  A return to rickshaws doesn’t seem likely just because Detroiters are hurting. No, they will buy up that slack oil supply.  It would certainly be tidy to have a tax on gas guzzling cars, wouldn’t it? Or feebates, as Amory Lovins has suggested.

Until the mugwumps “get it”, the world will continue to leave them behind. Whining about a return to the past won’t change the future.



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