As readers of this blog know, I am a staunch opponent of a federal bailout of the US automotive industry. And I’m sticking to my guns despite a flood of hate mail and comments. I do, however, feel there are steps that could be taken to help make US automakers more viable:
1) Get rid of the Corporate Average Fuel Economy (CAFE) regulations enacted by Congress in 1975. The goal of CAFE has been to improve fuel economy of all vehicles manufactured in the United States. So in order to sell profit-making SUVs and light trucks, GM, Ford and Chrysler had to make small cars in US plants staffed by members of the United Auto workers. There’s no way those cars could economically compete with small cars made by Japanese transplants in the South. US automakers should have the freedom to make those cars wherever they want.
2) Use a higher federal gas tax to create an incentive for consumers to buy more fuel-efficient vehicles.
3) Use federal money to underwrite a massive campaign to develop electric and other fuel-efficient vehicles. There’s plenty of precedent here from defense and other projects. Maybe hydrogen could be in the mix. Green light pebble-bed nuclear plants to produce hydrogen.
I’m sure there are other constructive ideas that make sense. But we don’t want Congressional nitwits like Stephen Lynch, a Democrat from Massachusetts (sadly, my congressman) lecturing the auto CEOs on how to run their business.