The feds made us do it! I'm tempted to say that the Dow Jones' Marketwatch interview (via CNNMoney) with GM's Car Czar is Maximum Bob unplugged. But that assumes that Mr. Lutz was, at some point, connected with reality. Anyway, here we have Maxi Bob taking his "raised federal fuel economy standards are like forcing fat people to wear small clothes" argument to the next level. "With the federal mandates at 35 miles per gallon coupled with cheap fuel, it puts us at war with our customers. At $3 a gallon (for gas) many people still want full-sized pick up trucks (and) full-sized sport utilities with V8 engines… and we're not going to be able to sell it to 'em because we if we do we won't make (the federal mandates)," Lutz told the Dow folk, adding, "It's ridiculous." Strengthening his already bullet-proof rep for spouting Pollyanna prognostications based on sweet FA, Lutz also says he's spoken to bankers who think the worst is over for the "mortgage meltdown crisis and the liquidity crisis." Anyway, who cares? "If everything goes well in the rest of the world, we can take a couple hits in the U.S. and still be okay." And just in case you thought Bob's reality divorce papers weren't signed yet, how about this: "We are working on the electrification of the automobile because my personal theory is the best way to save fuel is to use none at all."
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“If everything goes well in the rest of the world, we can take a couple hits in the U.S. and still be okay.”
Note to Bob:
We’ve already taken a decade or two of hits and we’re not OK.
I find myself in the odd positon of agreeing with MB on this issue. CAFE standards make the manufacturer responsible, rather than the consumer. A tax on gasoline would improve average fuel economy more than CAFE standards do.
The problem with the tax -aside from being politically unpopular- is that GM isn’t well placed to provide the kind of vehicles people will be demanding. But that’s another story. Bob is right, there are still people who want 3/4 ton V8 powered trucks, and GM ought to be able to sell them w/o worrying about fines.
Dynamic88: Bob is right, there are still people who want 3/4 ton V8 powered trucks, and GM ought to be able to sell them w/o worrying about fines. I agree as well. CAFE is a joke. But "ought" ain't gonna cut it. The rules of the game were and still are clear: if GM wants to sell loads of big ass high-profit pickups and SUVs they gotta balance that out by selling (you know, selling) smaller, more fuel efficient vehicles. Toyota: Prius, Tundra. Do the math. Anyway, what's the bet GM and the domestics find sufficient regulatory wiggle room to sell all the pickups and SUVs they can? And what's the bet that "all that they can" still won't be enough to stave off Chapter 11?
RF
You’re correct, “ought” isn’t going to be a winning defense when the fines are levied. As you say, the rules are in place and clear, so less bitching and more engineering is in order.
Still, we pistonheads should defend the automakers on those rare occassions when they are correct. Even Maximum Bob can’t be wrong all the time.
The sad thing is GM is already a couple model generations behind on Hybrids. And Toyota will probably beat them to market with Plug ‘n play cars too.
“We are working on the electrification of the automobile because my personal theory is the best way to save fuel is to use none at all.”
So he has a way to pull electricity out of thin air or otherwise produce it without burning fossil fuels or using nuclear fuel? Does GM have a solar- or windmill-powered car that we don’t know about?
Agreed with Dynamic88.
As for Bob and his bankers, I sure hope their golden parachutes will cover the declining cost of their homes. Cause guess what: it’ll get worse before it gets better. just think of all those baby boomers who will progressively sell their assets, including their houses.
Did Maximum Bob go to Congress and urge a significant carbon or motor fuel tax? I’m sure GM retains lobbyists; did GM instruct them to work for a significant carbon or motor fuel tax?
“Did Maximum Bob go to Congress and urge a significant carbon or motor fuel tax? I’m sure GM retains lobbyists; did GM instruct them to work for a significant carbon or motor fuel tax?”
No of course not. GM doesn’t want to be seen as lobbying for higher taxes. It’s up to congress to raise taxes, but they are too gutless, so we end up trying to make the manufacturer make the cars that we aren’t choosing.
Of course Maximum Bob may be looking a gift horse in the mouth. W/o cafe how much farther behind would GM be in fuel efficiency ?
KixStart That would hurt GM if gas prices went up, naturally or from taxes. They want their high profit trucks and SUV’s to keep selling and as everyone can see from the modest price jump in gas people are downsizing away from what they want/wish. I think GM has been hoping(predicting who knows) another significant drop in oil prices will happen again like in the mid 90’s, then they can forget the Volt and all this hybrid BS and get back to making big bucks sell trucks and SUV’s. And the new CAFE regs put a huge ding in that wishful thinking, so they are bitching about it. How any large company like that could be so blind to the economic realities in the future is beyond me, wishful thinking and telling everyone sunny days are ahead doesn’t change reality just makes them look even more out of touch.
Well, if you drill through to the DJ article, you find that Lutz favors a gradual increase in gas prices until we catch up…
Gosh, I’d be awfully surprised if he didn’t clearly convey that message to Congress…
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If I recall correctly, Toyota had a similar problem with demand for their gas hogs (like the Rav-4!) skewing their fleet fuel economy downwards. So, they raised prices on the thirstier models to shift demand back to the higher-mpg end of their fleet.
Maximum Bob could try that trick.
Which ever way you slice it, CAFE is a stupid idea. Instead of using gas prices to curb demand for gas guzzlers, the government has pushed the responsibility for fuel economy to the manufactureres who then face the problem of having to sell a product range that does not match consumer demand.
While this will most likely cause them to invest in technology that makes large vehicles more efficient, it will still result in unhappy consumers who will perceive these high tech efficient products to be too expensive given the relatively low price of gas.
Awww…Lutz…just slap an E85 sticker on it and that 14mpg SUV gets 27mpg (actually worse mpg than normal gas if it did use e85). Those SUV sized loopholes are still in CAFE.
The idea of raising the price of cars to negate the extra fees for gas guzzling SUV’s and trucks is basic arithmetic. Of course, that means a smaller customer pool, so ironically GM might have to subsidize the cost of CAFE for their customers to keep moving the iron. This of course would negate the purpose of CAFE, and there we are full circle!
To state that this is nothing more than poor old GM being penalized for selling What People Really Want is a load of crap – CAFE, even the new one, is full of loopholes put there at GM (and Ford and Chrysler’s) request which actually make large cars and trucks more attractive than they would be in a neutral standard.
GM, in other words, is whining because new CAFE doesn’t make trucks quite as artificially cheap and attractive as old CAFE did. Meanwhile, Toyota and Honda just shut up and make small cars that don’t betray a seething hatred for their drivers.
Attention Planet Zarcon, you have an inhabitant missing. What is this guy smoking? The US mortgage mess is about run its course according to him? I think he should look at what is going on with the London Stock Exchange today, a meltdown, and that the worst is over “in the liquidty crises” LMAO as such stupidity. Can I get his job? If I made such stupid statements I would have been out of business (and job) yesterday.
Personal note: A relative of mine purchased a new Toyota yesterday, after being a life long domestic car builder owner. She wanted better fuel efficiency. She looked at the Cobalt, the Focus and the Toyota Scion Tc, it was no contest. For about the same money, she got a fully loaded Scion, the Cobalt felt and drove like a “tin box” in her words. And she checked the resale values of Focus, which was about the same as a Lindsey Lohan used dvd. One more lost lifetime customer for the 2.8
What I don’t get is that Rick Wagoner is always complaining at every public opportunity that the U.S. doesn’t have an “energy policy”, and that somehow the US automakers would be better off if we had an “energy policy”.
Well … here’s you energy policy. Shockingly, GM execs are still complaining.
GM can’t sell relatively small cars and trucks profitably. You know this, I know this, and they know this and that’s why they’re sh**ting bricks over CAFE. The nonsensical, seemingly off the cuff remarks made by Lutz are indicative of a company that has no plan for the future and is in a reactive position rather than a proactive one.
The Volt is a prime example. It’s a vehicle that exists with lots of promises (more efficient than the Prius) but without a powertrain. Even if the batteries are developed in the next two years, you would be crazy to start using them right away in a vehicle that may be put to use in extremes of temperature, extreme vibration (America’s roads are literally crumbling), and varying altitudes without years of test data and refinement.
If you believe that higher gas prices are the better alternative to CAFE regs, I ask you, “To whom should the extra gas taxes go?” because a tax is what you’re proposing. Shall the monies go to the Saudis, or the most-profitable-ever-in-history gas companies, or to the bureaucrats in Washington?
The smart car company will be the one who sees this as an opportunity to wean America off her insatiable, empire-building, oil war mongering appetite, and to take the credit therefrom.
factotum: “If you believe that higher gas prices are the better alternative to CAFE regs, I ask you, “To whom should the extra gas taxes go?” ”
Make it revenue-neutral. Cut some other tax to match the [realistically] projected revenue from this.
Or do set it up as a new tax and revenue source and fund this:
A Solar Grand Plan
Newsflash Bob – the Dow tanked 450 points on opening this morning.