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Thread: Obama nails the coffin shut

  1. #1
    Vulture of The Western World Eric's Avatar
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    Obama nails the coffin shut

    Can you hear that? It's the sound of the final nail being hammered down onto the coffin lid of the U.S. car industry.

    President Obama wields the hammer - in the form of a massive uptick in federally required fuel economy standards that will require each automaker's lineup of new vehicles to achieve an average of 35.5 MPG by 2016.

    But what could be so bad about forcing the automakers to make cars more fuel efficient? Dig deeper and you'll see.

    Even the Obama people concede the new mileage standards will cost American consumers about $1,600 per vehicle by 2016 - in effect, a massive tax increase in the middle of a neo-Depression. The difference is this tax increase will be optional. People can avoid it by avoiding new cars - which will make it that much harder for the car industry to recover from the catastrophic state it finds itself in right now, with sales down anywhere from 30-50 percent depending on the make.

    Pure genius!

    Boosters of the 35.5 MPG standard talk up the fuel savings (current cars must meet a 27.5 MPG average) but if the car costs $1,600 more to buy, the roughly 8 MPG uptick is probably a net wash, at least until the car is several years old and the fuel savings amortizes the considerably higher up front costs. Obama and Co. are millionaires, so this is small potatoes from their point-of-view. But ask most Americans whether they think $1,600 is chump change.

    But all this is secondary. The real killing aspect of CAFE (the federal government's cutesy acronym for the fuel economy standards) is that it will mean the summary execution of perhaps one-third to one-half of all the vehicles in GM, Ford and Chrysler's product lineups - including the best-selling and most profitable models, virtually none of which achieve close to 35.5 MPG.

    The law doesn't say an automaker can't continue producing cars that don't meet the 35.5 MPG cut. But it does impose "gas guzzler" fines on any automaker (and individual car) that doesn't. And since the fuel economy standards represent average mileage - the presence of just one "gas guzzler" has the same effect on an automaker's overall CAFE ratings as a D- has on a high-schooler's overall GPA.

    That means automakers (and not just American ones - Toyota makes many "gas pigs," too) will be under tremendous pressure to cancel countless models - including models just now coming to market (or soon to be here) that represent huge sums of money in the form of R&D, tooling, assembly lines and so on. The 2010 Chevy Camaro is one example.

    Say sayonara.

    Prettyy much anything mid-sized and larger is on the Endangered Species list. Trucks and SUVs are done.

    Normally, the huge investments in the development of new car lines would be amortized over the life cycle of the car "platform" - which is typically 5-8 years, on average. But at the stroke of Obama's pen, a vast fleet of barely-born cars will be rendered economically untenable. All the money poured into them will be flushed straight down the pipes - adding to the vast ocean of red ink that's already sloshing around.

    The industry can only take so many hits below the waterline. This might be the coupe de grace. And if it's not, the 35.5 MPG's follow-up will definitely do the job.

    Obama also wants to cut new car "emissions" by another 30 percent. Sounds good - except that it's a hugely dishonest number. Most people innocently assume "cutting by 30 percent" represents a substantial cut. In reality, all 2009 and newer cars are already virtually pollution-free in terms of their exhaust emissions. Literally 98 percent of the gasses coming out of the tailpipe are just water vapor and carbon dioxide - neither of which have any impact on air pollution whatsoever,

    Only about 2 percent constitutes "emissions" - things like carbon monoxide and the remains of incomplete combustion (unburned hydrocarbons).

    It is this remaining 2 percent that Obama wants to cut by 30 percent. Work that out. The number is very small.

    But the cost will not be. These minor, incremental "improvements" in exhaust emissions grow increasingly expensive. It is the law of diminishing returns. The majority of the "easy" improvements/reductions have already been achieved. Getting at that last 1-2 percent will involved Hurculean effort and huge sums - and probably will never fully be realized since the act of internal combustion necessarily is going to produce some unhelpful byproducts, however minor, no matter what we do.

    The question is - or ought to be - is it worth it to kill the industry in the process of going after these final few vapors like a latter-day Inspector Javert?

    Obama shows his ignorance of both economics and engineering by these potentially devastating diktats. If he really wanted to improve the fuel efficiency of new cars without killing off the car industry in the process, all he'd need to do is rescind federal bumper-impact standards, which have increased the curb weight of the average new "economy" car to around 2,500 pounds (vs. around 2,000 lbs. 20 years ago).

    Cars that weigh less burn less fuel. They cost less, too. In the '80s, there were dozens of cars that got 40 mpg. Today, only one or two achieve that mark - despite all the technical advancements of the past quarter century - because they are so much heavier, courtesy of the federal government.

    Would lighter cars be less "safe"? Maybe. It depends, for one thing, on whether you have a major accident. Most of us don't. Maybe we'd like to exchange the very real, everyday advantage of 40-plus MPG (probably 50-plus, given modern engine management technology) for the hypothetical advantage of a "safer" car weighed down by government-required argle bargle.

    Shouldn't it be our choice?

    Apparently, not. The Great Engineers in DC know best. And they're not stupid enough to let a good crisis go by unexploited - to paraphrase Rahm Emanuel.

    But they won't pay the price. The car industry will. And then, so will we.
    Last edited by Eric; 05-20-2009 at 07:43 AM.

  2. #2

    The Sore Thumb...

    Eric,

    Tell me you didn't see this coming. My Town Car will probably be confiscated and sent to the crusher.

    My question is this: How long do you think it will take, when DOT, etc. realize they're asking too much, too soon of the automakers (including foreign) for them to drop us back to the good old default position of the Double Nickel? GOVERNMENT studies (emphasis intended) show a 21% increase in fuel economy at 55 over 70. It's only a matter of time, and herein lies the "sore thumb" syndrome.

    And remember what some say about this Administration- while the right hand is working, watch the left.... I'm greatly disturbed by what the new, RADICALIZED NHTSA and EPA are up to. No one seems to be talking, but I know they're involved with this, and will probably act quickly.

    To the NMA, I say get ALL your State Coordinators deployed right now to resist federal pressure to return to a national speed standard. If we could get 20-30 states to refuse, then at least THAT much of our driving freedom might hang on. I really don't think this will be as hard to do as one might think. Eric, if you'll go to work in VA, I'll go to work in TN. Let's make a deal here and now.

    We're currently riding in on a small, but momentum-gaining movement to assert state sovereignty. I know that every state will be able to set their own limits, but will lose billions in highway funds doing so. That's why we have to attack the whole premise. We did it in the '90's, let's get busy and protect what we fought so hard, over so many years, for.

    HAWG

  3. #3
    Vulture of The Western World Eric's Avatar
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    Hi Hawg,

    Absolutely; I follow this stuff - and also have a (well-founded, I think) general suspicion of everything the government and those who control it do.

    I try to do my part by writing/spreading the word. By nature I am not an extrovert, so I make a poor organizer/political type. But like you I am convinced we're approaching a nexus. Either it will be some type of secession/devolution of authority and return to the relatively free society we once had - or it will be a Total State, perhaps not openly brutal, but nonetheless one that severely limits our range of free action. I am willing to do whatever I can to avoid that.

    So, let me know!

  4. #4
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    There will be a few states that openly revolt at the idea of having a national speed limit. A few others will cave at the prospect. This is not 1974 in that people are a lot more skeptical about relinquishing control of speed limits to the federal government.

    That said, what I see coming is a back door attempt to "encourage" states to reduce limits or install automated speed enforcement. What is encouraging is that some states have banned the practice. Of course it is going to take work to keep those bans in effect.

    In my state of Florida, I am NOT encouraged. The legislature just took a $315 million bribe from the feds to enact a primary seat belt law. I think that they would likely do the same thing as far as speed limits go.

    Texas, on the other hand, may just tell an Obama government to stick their thumb in their ass. Other western states may follow suit, depending on whether they are red or blue.

    We will see. If Florida goes to 55, I'm moving out.

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