Here's How Congress Can Help GM, Ford and Chrylser

December 4, 2008

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.

Posted by Doug Smock on December 4, 2008 | Comments (5)

February 17, 2009

In response to: Here's How Congress Can Help GM, Ford and Chrylser
tcampbe3 commented:

The 800 lb gorilla is really a ten dollar per hour difference. The non-union in the south pay rates are on par with their union brothers and sisters in the north. The difference is in health care and pension. The contract in 2007 is set to take care of the health care difference and attrition will take care of the wages with the two tier system. The south will then be be in for a few wage cuts. The job bank is gone with U.S. based companies but I see that Mitsubishi (Normal, Ill)is stopping production for 4 months while keeping everyone in plant. If that is not a jobs bank, I\’ll kiss your southern –se!

December 17, 2008

In response to: Here's How Congress Can Help GM, Ford and Chrylser
tom L commented:

Perhaps the CAFE levels should be INCREASED so that instead of being able to meet the regulations with a non-competitive small car strategy, the automakers would have no choice but to apply technology to make the SUVs more fuel efficient. That strategy shuold take precedence over the use of technology to continuously boost horsepower (to generally excessive levels for most owners) and add wow factors. Many people still want and need the utility of the bigger vehicles, so imagine when gas prices are back up to $3+ per gallon the attention (and sales)that fuel efficent SUVs and truck would get. It\’s time for more long-term thinking in our auto industry.

December 17, 2008

In response to: Here's How Congress Can Help GM, Ford and Chrylser
Dave O commented:

The CAFE applies to all cars sold in the US. If there is a distinction those made in the Us and those made elsewhere, why no remove the distinction?

December 17, 2008

In response to: Here's How Congress Can Help GM, Ford and Chrylser
What a load... commented:

Come on. I think the unions are cutting off their nose to spite their face in not being willing to cut their wages, but saying US automakers are FORCED to pay unions wages is total B.S. They entered these contract by their own choice. I have not sympathy for them…

December 8, 2008

In response to: Here's How Congress Can Help GM, Ford and Chrylser
kerry bradshaw commented:

I note that Lynch obviously avoided the only issue that has any importance - the extortionary union labor rates that the US automakers are forced to pay. Any claims to know how to run a profitable US auto business that don\’t mention such an 800 pound gorilla, are totaly baloney. Lynch is a complete idiot.

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