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?

Mr Fezziwig, administrator for Green Cars Now, http://www.greencarsnow.com , a website promoting fuel efficient cars and cleaner alternative fuels and Car Repair Ratings http://www.carrepairratings.com , a website devoted to consumer reviews of auto repair work.

The way many of us see it, the biggest obstacle to higher fuel economy standards is not the domestic automakers alone, but rather an organization of manufacturers called the "Auto Alliance". This organization has been lobbying for far more relaxed fuel economy standards and it may appear that they are succeeding.

Since you mentioned Toyota and Honda's sales successes with high FE cars, It is VERY sad that Toyota is a member of this infamous group. Which begs that many questions be asked. Fortunately, Honda is not.

Cheers;

MSantos

CAFE is a bad idea to begin with. Detroit needs to be forced to do anything that isn't profitable. There hasn't been profit in fuel efficiency until recently, and there's probably still not much profit in it.

A more productive path would have been to make fuel efficient vehicles profitable. And the way to do this would be a much higher gas tax, or more broadly a tax on oil.

truedelta.com
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I agree with mkaresh that fuel efficiency standards are a poor alternative to a carbon tax which is the simplest way to reduce demand and increase investments in alternatives and fuel efficiency. Fleet averages can be manipulated, but they are better than nothing, given the current lack of support for a tax on fossil-fuels. I see several reasons why Detroit is so reluctant to move away from big, heavy vehicles and a couple of them are:

First, they have a lot of corporate "know-how" in the drivetrains and other components used in rear-wheel drive trucks and cars, so they are good at building those types of vehicles. They also have a huge legacy pipeline of parts, suppliers and methods associated with those vehicles. Do not underestimate how important this is to logistics and manufacturing efficiencies. Conversely, they are not particularly good at building high-quality, small, front-drive cars - this is a holdover from the days when a compact was for those who could not afford a bigger car. They have a huge learning curve here and not much time, so they keep stalling, even though it just delays the inevitable.

Second, their C-level executives are all inbred (from the industry) and hence are blind to what we see as an obvious future of fuel scarcity, higher costs and climate change. They still get assurances from execs at oil companies and energy associations that supply will be able to keep up with demand, and their existing (aging) customers still like what they produce. As a result, their strategy lacks any comprehension of, or response to, the new market dynamics. I was dismayed when I saw both Ford and GM introduce completely redesigned SUV and truck lines in the past five years that were HEAVIER and MORE POWERFUL than their predecessors. And the ongoing investment to build retro cars (Mustangs, Chargers, etc) shows how desperate they are to build what they know how to build at all costs.

Third, it is well known that Detroit has the highest pension commitments and healthcare overhead of the auto manufacturers worldwide. Large cars and trucks historically were the most profitable and it is difficult for them to make the strategic shift necessary to vehicles that will undoubtedly be less profitable per unit than before, when faced with these legacy costs. It goes against all traditional thinking.

It would appear to me that unless the Detroit manufacturers make radical shifts in their strategy and technologies (for manufacturing, logistics and the vehicles themselves) they will continue to lose market share and eventually be relegated to niche players.

I've spent time inside GM. All certainly true. Frankly, wanting to do what you already know how to do is true of most people and most organizations. It's hard to get people to learn to do something new.

truedelta.com
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Detroit isn't the ONLY ones introducing less-efficient new models of their vehicles.
Just look at Scion (Toyota). Their new xB now has only the 2.4 liter engine available, instead of the old model's 1.5 liter (I think that's the size). That's great for extra get-up-n-go, but a BIG step back for fuel economy. The great fuel economy of the older xB is the ONLY thing that made me ever think about one. The new version still has respectable MPG numbers, but not the stellar numbers (for its size) of the prior model. Sad.

Steve

STOP terrorism - Drive a HYBRID

Vehicles:
350 miles a week ------------ 2006 HCH II, Magnetic Pearl, w/NAVI (born on May 25, 2006)
350 miles a month ---------- 2003 Mazda Tribute ES-V6
350 miles a year (for now) - 1986 Mercedes 560SL

All they need to do is say "We're working on hydrogen and it will be here shortly" and everyone quits talking about CAFE.
Yes, I do think its a conspiracy.
--des

Very true about the new xB.

All of the companies produce what they feel will sell. It's important to realize that only a few people will pay for higher fuel economy just because "it's the right thing to do." They're like there to be higher fuel economy small cars--for other people to buy, not for themselves. There's no conspiracy.

This is why I think some form of gas/oil/carbon tax would be a much smarter way to go. If people truly wanted to buy more fuel efficient cars, manufacturers would develop and offer them. You get all kinds of distortions when you try to legislate supply rather than influence demand.

truedelta.com
Vehicle reliability, fuel economy, and price comparison information

People buy what they're told to buy, a wit once said. I tend to believe it. People want more fuel efficient vehicles, in sizes and capacities that work for them. So far, with clean diesel around the corner, it will hopefully happen soon.

I've long been thinking the ideal hack would be to transplant a Prius drive train into an xB shell. It would not have the MPG performance of a Prius but it would shine compared to a standard xB. . . . Maybe next year.

Bob Wilson

Operation Iraqi Oil Freedom:

Automatic, stock, project car.

My other 1500 cc car:

Automatic, stock, backup car.
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