UH2L

Auto MPG: The Economics of CAFE, Part One

CAFE doesn't restrict what kind of car you can drive. It restricts the average fuel economy of vehicles sold by a given manufacturer. And even then manufacturers can sell all guzzlers as long as they pay the fines. Mercedes has been paying fines for years but you can still buy a souped up AMG Mercedes getting 12 mpg.

And as for fuel tax increases being the way to go, that's like asking kids who are addicted to sugar if they want less sugar and they can vote to have parents that will give them as much sugar as they want or parents who will restrict how much sugar they can have. We are like such children in this regard. We want cheap gas and are outraged when the price goes too high. We feel that cheap gas is our God-given right and would never collectively vote in politicians that would raise gas taxes significantly, even if it was done gradually. There's also the part about such tax increases slowing down our economy and making transportation unaffordable for poor people.

CAFE is a decent solution but far from ideal. I think tax rebates on a sliding scale for cars more efficient than the standard are the way to go. These could be offset by sliding scale tax penalties on cars that get below the average.

General Motors, Chrysler: Cutting Their Way to Greatness

If the Detroit 3 can't cut their way to greatness then what would you have said if they didn't make major cuts, perhaps that they're bloated an inefficient.

The line "making cars people want to buy" is so overused and misleading, it's getting highly frustrating. Do you know who has recently sold the most mid-sized cars? GM, but just because the volume was spread out over many models, the press jumped all over it as GM doesn't sell cars people want. Sure, there were a lot of fleet sales a few years back, but that has been significantly cut back. GM also has many loyal buyers and so do Ford and Chrysler. Read the most recent quality stats and you'll see that the domestics often outperform imports. So, it's not as if the products are so bad.

I think automotive press writers need to start writing articles that are more fair so that people aren't convinced away from buying from companies based in OUR country.

Cars: What It Means to 'Buy American'

It's amazing how us Americans can be so Anti-American, and more specifically anti-Detroit. There's this grudge from prior bad product experiences and jealousy for people working on assembly lines making more money than people with degrees. I have two degrees and I admire these workers because I don't know how they do it day in and day out. Also, it's not just workers screwing parts together. There are many skilled trades that require lots of training and experience including tool maintenance, model-making, test-driving.

I applaud Obama's stance. He realizes how important our auto manufacturing industry is economically, technologically, and for energy independence / national security.

People tend to forget that it's not just about where the vehicle is built, but where the work behind the design, engineering, marketing, finance, accounting, takes place too.

I think the unions did ask for too much up until recently, but if it weren't for unions, none of us would enjoy the benefits and protections we have today.

I was in Germany recently and I would say 80% of the cars I saw were German. If only we had that kind of patriotism here.

What else is made here anymore? We need manufacturing here for a strong economy. That's because we need to bring money into our economy by selling goods to other countries. We cannot survive as a service-based economy. You can't export haircuts and carwashes!

William Holstein on Why GM Matters

We need a manufacturing base in our country because it leads to exports that bring money into our economy. I always say, "You can't export haircuts and carwashes." Manufacturing-based jobs also are better in pay and benefits than service-based ones. The only major products made in this country anymore are cars and trucks. Other industries are so intertwined as well. So we have to assure that the industry stays alive.

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As Gas Prices Fall, Fuel Economy Loses Importance to Auto Shoppers

This phenomenon just proves that people are generally stupid and that CAFE doesn't work. I totally disagree with Lazaris because I think people don't do what's best for them or our country. They are buying these guzzlers and then when gas prices spike up again, they'll complain. To be fair, some of the sales are driven by all the rebates on trucks. For us to become energy independent would require an increase in gas taxes and now that prices have. Making manufacturers produce efficient vehicles doesn't mean people will buy them! The loans for the Detroit 3 may have conditions to make them produce highly efficient vehicles, but the government will have to incentivize the purchase of those vehicles while taxing the purchase of inefficient vehicles. That would be an alternative to an increase in gas taxes.

Aid for Chrysler: Why I'm Saying NO!

The Cerberus acquisition of Chrysler just goes to show that managing an automotive company is not as easy as outsiders often make it out to be. I do think Daimler did do some things to hurt the future of Chrysler though. They abandoned the only small car Chrysler had, the Neon, and didn't do a very good job with the new version of the Sebring and Avenger.

Big Bank vs. Big Car: The Bailouts Have Just Begun

At least if the Detroit 3 get loans, they'll keep building cars. The banks haven't been loaning out money but have instead used it to bolster themselves financially.

As for justification behind the Detroit 3 loans, read my article, from somebody that actually knows the auto industry...

uh2l.blogs.com/things_...

Will Detroit's Loss Be Japan's Gain?

Vienna and bs_o_meter,

You both touch on the fact that the Japanese and other transplant plants here are much newer. I agree that the US companies should have made more flexible plants for when market demands change, but is this possible at all of their locations without starting from scratch? I don't know.

As for arrogance, when I worked at GM, many of our engineers noticed even stronger arrogance and stubbornness from their German counterparts within the company. (That's not to say our American executives don't suffer from it).

Automakers: A Pitiful Trio

The main problems behind our economic issues are short-sighted thinking, as Vienna notes, and greed, from both the corporate side and the private side. This greed led to predatory lending, fake financial instruments, speculation, and people buying more than they could ever afford, selling houses for more than what they were truly worth. This all fueled the bubble of fake value in the stock market.

I wrote an article about the loans to the auto industry and why they're necessary. The situation is not all the fault of the Detroit 3 and their products are better than the media gives credit for...

uh2l.blogs.com/things_...

UH2L

Who Might Benefit From Detroit's Failings

Here's my take on the whole situation.

uh2l.blogs.com/things_...

I agree with the earlier comment that industry (and people) will be coming back to the Great Lakes in 10-15 years because they will need WATER, (the next oil). The Southwest and California are running out and Atlanta ran out last year.

Saab May Be GM's Best Hope for the Future

I am a long-time Saab fan, but unfortunately, most people never caught on to how far ahead of the curve Saabs have been. People didn't want, (and still don't) want a FWD 4 cylinder turbo entry luxury car that gets 30 mpg with 60-70 cubic ft of cargo volume, (my 9-3 wagon has more cargo volume than a Ford Edge and a Mazda CX-7. I also average 28+ mpg with half city miles. Saabs have always been the true AntiSUV. They are light, safe, efficient, and sharp looking. It's always funny how people criticized them before for being quirky. That was supposedly why they never sold in higher volumes, then when GM tried to make them more mainstream, then many of those same people criticized them for being too generic.

As for the whole GM and Detroit 3 loan issue, I summarized all my thoughts on an article I wrote on my blog here...

uh2l.blogs.com/things_...

Detroit's Big Three and the Democrats' Economic Illiteracy

I got tired of retyping my thoughts on the government loans for the Detroit 3, so I summarized everything here...

uh2l.blogs.com/things_...

This guy has some decent points but, it's not about who's to blame; it's about what should we do now for the good of the country.

UH2L

Does the Auto Industry Deserve To Be Bailed Out?

Bababooie,

For you to bring up the fact that the writer is not an American born citizen has no place in our comment. I am not one either. I was born in India, (presumably where Nirav is from based on his name), but I grew up in the Midwest from when I was a baby. I'm also a liberal and I have an MBA from the University of Michigan.

Don't go stereotyping people based on ethnicity and education.

Does the Auto Industry Deserve To Be Bailed Out?

It's not a matter of whether the companies deserve the loans, (notice I didn't use the term bail-out). God knows, the banks didn't deserve them due to their greed and stupidity. But, giving them the money was the best thing to do for the good of the world economy. I would argue that the same holds true for these Detroit 3 bridge loans.

Auto workers are not unskilled!!! Do you even know what the workers do besides screwing in bolts? Have you ever been to an assembly line, design studio, stamping plant, test track? They do modelmaking, tool maintenance, durability driving, data acquisition, computerized machining. What you call a "worker" is not just a person on the assembly line. And to say a monkey can do their job is insulting. Even with simpler jobs, what the lineworkers do is admirable considering the monotony, physical exertion, and risk of injury in certain cases. Desk jobs don't kill people but plant jobs can and do occasionally.

Perhaps they do make too much, but it's a legacy from prior UAW contracts that aren't the fault of current management. They are doing the right thing by fulfilling obligations and if they go bankrupt, (which will mean disaster for sales and our economy), then they will get out of the obligations but the healthcare and pension burden will be shifted onto the government. And nobody will buy a car at a reasonable price from a bankrupt company for fear of not getting parts and service.

By the way, I'm a white collar former GM employee, but these arguments by supposed "experts" have to stop. Learn what really goes on in the industry before you write such articles. You are doing a disservice to our workers, our auto industry, and our economy.

UH2L
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Automakers: Bailout Arguments, Pro and Con

A car company can't survive while bankrupt! Very few people will buy a car from a bankrupt company when they can't be sure that parts and service will be available for 4+ years. It's way different than an airline ticket which is consumed and done within a few months if not days.

UH2L
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