I’m curious what everyone has to add about this latest government interference in the market. The interesting thing is that GM’s Chief Executive is actually supportive of this regulatory standard. Not that GM = the auto industry, but does this just prove that the guy is a fool, or is there something else going on here?
It seems to me that if states like CA weren’t putting stupid regulations out there to begin with, GM wouldn’t be so supporting anymore, so it’s just another example of “poor regulation creating more regulation”. Make sense?
The article says the standard is “expected” (heh) to raise the cost of vehicles by $1300 by 2016.
(Of course, as usual the idiotic government is not considering the employment and sales hit that car companies will take as a result of these higher prices, as it pushes consumers who could “just barely” afford a new car out of the market. So much for “just a $1300 price increase”–probably optimistically low anyway.)
Under the proposed standards, manufacturers must reach an average of 39 miles per gallon for passenger cars by 2016, and 30 miles per gallon for light lorries.
…
Carmakers are also hailing a single nationwide standard, after years of court battles to stop California and other states setting their own tough pollution controls.
“GM and the auto industry benefit by having more consistency and certainty to guide our product plans,” GM Chief Executive Fritz Henderson said in a statement.
In an indirect way, it seems we almost have CA to blame for adding (bogus) credibility to the whole concept. I’m sure the media will portray the GM exec’s support as “market support of regulation”, as bizzare as that sounds.
Didn’t your parents tell you that “If your best friend jumps off a bridge, you don’t have to.” The same holds with mileage requirements. The whole argument about “If CA is doing it, then we will too” is void of logic. Car companies can simply make different cars for CA and the North East than they do in the rest of the USA. If CA and the North East are too harsh then the Car companies can simply stop doing business in those states. The consumers of those states will vote with their feet and dollars and leave those states. Besides there will be room for other companies, most likely from other countries without unions, to step in the take up the demand left by the abandoning car makers.
The worst thing to do is what the Obama just did, that is adopt slight less harsh standards on CONSUMERS. The companies love this as they can either meet the standards or fail, it is of no matter. The Obama will simply change them later. This has happened several times in CA previously. Consumers on the other hand have the number of choices they have reduced and find themselves further regulated by the Obama in Washington.
Besides, 35 mpg is way too low. I vote for 75 or 100 or 1000. If we are going to live in a wind/solar power fantasy world then lets go all the way. Stop the entire industry of petro powered vehicles. Force users to get the benefits of electricity. I say go for it under one little constraint:
Every vehicle owned by the US Government and Military MUST obey double the standard. That is a tank must get 150, 200 or 2000 mpg.
I was just about to start a post about how the car industry killed itself but it seems I have been late. Always remember that when legislation is passed it’s never a unilateral government maneuver but it’s always carried out in complicity with the industry and after very expensive tests. I am also ready to bet that the increment in prices won’t be as steep (leaving inflation aside) as they say, but don’t think you won’t pay the price in some other way. When manufacturers have to cut corners they first fit cheaper suspensions, then cheaper brakes, then they fit cheaper plastics, cheaper ecofriendly tyres, then they start saving on paint etc. In short your new car/bike may have better fuel mileage or more horsepower than the old model you are trading in but there’s a high probability it won’t last as long and it will start falling to pieces in a few years time if not in a few months time. Honda did that with motorcycles, believe me I have experienced it first hand.
If you force manufacturers to improve fuel economy at any cost, what you’ll get is oversized cars full of fancy micro-electronics which will be so error-prone that repair costs will skyrocket. Ask anyone with one of those high-tech Mercedes limousines what it’s like.
There’s no need to force manufacturers to build these cars. They already exist. Here’s one that gets about 60 mpg and has become common in Europe:
Some people just need or want the extra power of a 15 mpg vehicle. Why ruin the fun for these folks and cripple their favorite vehicles? It’s all so arbitrary; why is 39 mpg acceptable when the Smart ForTwo above gets 60? Why is only fuel economy important and not how wasteful the building process of a car is (that would make hybrids look pretty bad)? Why only civilian cars and not military vehicles, as has been pointed out above?
You know, it really raises my time preference to undiscovered levels when I think about how politicians want to spoil all that’s fun to me. And it saddens me that I feed their apparatus every time I engage in white market activity.
Good points, good points. And I like this one: “If CA and the North East are too harsh then the Car companies can simply stop doing business in those states.”
And I definitely don’t think that CA doing it makes it justifiable–I’m saying it’s a ridiculous justification (regulation begetting more regulation), but of course I’m sure the media will exploit it via GM’s help.
The more I think about it, the more it seems like this new GM CEO is thinking more like a government official than a CEO.
I think I should file for some sort of “me-too!” tax credit, since I currently utilize the most fuel efficient method of travel that is also environmentally friendly: walking.
But then I might be out-lawed since I have an unfair advantage of having almost infinite miles per gallon of water I drink, compared to 30 mpg for certain cars.
Although I could sure use some new sneakers, preferably ones with airbags in case I trip at a crosswalk.
Actually, I said that I think the price will be far greater than the supposed $1300/per vehicle they claim will be the cost. I was thinking primarily of the reduced sales (increased cost of production) of course, but the point about encouraging cutting corners in other areas to cut costs is another good one. So Honda actually did that with motorcycles? That really adds credibility to the argument if that’s the case. What prompted Honda to cut quality?
Maybe now (armed with additional viewpoints) it’d be fun to have some discussions about this with an Obamafreak or two… [6]
Well Ansury, to quote but a few cost cutting measures they implemented:
Cheaper wheels on trail bikes (the old DID units were pretty much eternal)
Cheaper paint and trying to eliminate lacquer coats from fuel tanks (resulted in a host of warranty claims, hence they backstepped)
Even cheaper OE tyres, if that was possible
Moving assembly lines for some popular models from Japan and Italy to Spain. This was usually associated with a noticeable drop in build quality
Using components from new subcontractors in Spain and China instead of the customary suppliers in Japan, Korea and Italy.
This is by far the most ridicolous: cutting the amount of assembly fluids and grease used on bikes. Try removing the wheel spindle from a brand new Honda and it will be as dry as desert sand.
Final measure they took on the European market, which is strictly related to the enviromental craze, is shifting to 10W-30 engine oil and forcing their dealers to use it. I won’t even bother commenting this.
Bear in mind that while new enviromental and noise legislations added to the cost of each new bike (both at engineering and manufacturing stage) and in spite of inflation and commodity prices skyrocketing they managed to keep price down, not without cost though.