Why Did Detroit Need to Be Forced Into Fuel Efficiency?
Detroit automakers successfully lobbied to keep the 27 mpg CAFE (Corporate Average Fuel Economy) standard from increasing for nearly 30 years.
Publicly they argued raising it would be bad for their business as the gas guzzlers have higher profit margins than smaller, thrifty fuel efficient cars and hybrids. Despite decreasing market share and massive layoffs for the last 10 years they (Ford, GM, Chrysler) still lobby against increases to CAFE.
In light of Toyota’s and Honda’s tremendous sales success with fuel efficient cars the public and federal politicians have largely begun to disagree with Detroit’s point of view and to the automakers surprise the Senate passed a bill in June 2007 to increase the CAFE standard to a whooping 35 mpg by 2020.
Is GM and Ford only able to keep their stock values afloat (and executive bonuses) by laying employees off rather than selling lots of cars people want?
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