Does'nt cafe apply to all manufacturers selling cars in america? DRE
> I disagree with 90% of this, but it's still interesting and I still > agree with the let-the-market-solve-it idea -----------------------------> --------------------------------------------------------------------- > The Drive-a-Toyota Act > July 2, 2007; Page A14 > > The next time Democratic leaders lament the decline of American > industry, please refer them to the current Congressional brawl over > auto fuel-efficiency standards. Nancy Pelosi, Harry Reid and most of > their colleagues are siding with upscale environmental lobbies over > American carmakers and workers. Call it their Drive-a-Toyota Act. > > Foreign automakers were cheering in June when Senate Democrats > muscled > through energy legislation to raise Corporate Average Fuel Economy > (CAFE) standards, requiring that automaker fleets hit an average of > 35 > miles per gallon by 2020 (up from today's 27.5 mpg). GM, Ford and > Chrysler all warned Congress that this would add to their financial > burdens, making their vehicles even less competitive with those made > by Toyota, Honda and other automakers. The United Auto Workers warned > that even a small mileage increase could cost more than 65,000 jobs. > [John Dingell] > > Yet Senate Majority Leader Reid's response was to scold Detroit for > opposing him, and to assert that if the U.S. carmakers had only > signed > onto CAFE sooner they wouldn't be in their current predicament. Had > they "joined us instead of fighting us these last 20 years [over CAFE > standards], they might not be in the financial mess they're in today, > " > he said. His apparent point is that if only GM and Ford had invested > in new technology and smaller cars the way Toyota and Honda have, > they > wouldn't be losing market share. This is a bizarre reading of recent > automobile history. > > Detroit has made its share of mistakes, but refusing to compete with > smaller, more fuel-efficient cars isn't one of them. GM tried and > failed with its Saturn project. And one reason for that failure is > that the main competitive reality facing Detroit for a generation has > been the burden of its worker pension and health care costs. The > consensus is that those costs add about $1,500 per vehicle compared > to > Japanese or Korean competitors. The best way to recoup those costs is > by making larger vehicles that earn more profit per sale than smaller > cars do. Making trucks (protected by a 25% U.S. tariff) and SUVs was > entirely rational, and failing to do so would have meant more > financial trouble earlier. > > Mr. Reid also forgets that, until this decade's surging gasoline > prices, those larger, U.S.-made cars were what Americans wanted to > buy. The Ford Explorer SUV was a huge consumer hit. With gas prices > as > low as 90 cents a gallon during the 1990s, U.S. drivers preferred the > safety and power of SUVs, pickups and large sedans. We don't recall > Bill Clinton proposing a 50-cent-a-gallon gas tax to spur gas > conservation, or for that matter lecturing Detroit to stop making > those vehicles. > > Amid today's much higher gas prices, more Americans are choosing more > fuel-efficient cars -- a market phenomenon that will do far more to > reduce fuel consumption than any Washington mandate. As most > economists understand, mileage mandates are an inefficient way to > limit fuel use. They don't reduce the number of cars on the road, and > owning a car that gets more miles to the gallon often encourages > people to drive more miles. > > If Mr. Reid truly cared about cutting gas consumption, he and his > party would increase the gas tax. But voters are already steamed > about > $3-a-gallon gas, and Mr. Reid's commitment to lower carbon > consumption > doesn't go as far as the personal sacrifice of losing Democratic > Senate seats. > > CAFE is a way to appease the green lobby immediately, while taxing > Detroit, its workers and American consumers indirectly but > significantly over time. Technology exists to further increase fuel > efficiency, but that technology costs money. The Big Three will have > to pass those costs along to consumers, which will make their > products > less competitive, while yielding a smaller profit margin on those > they > do sell. Ford lost $12.7 billion last year as it is. > > One Democrat who understands all this is Michigan's John Dingell, the > House Energy and Commerce Chairman who has so far refused to include > sweeping new fuel-efficiency standards in his energy bill. He prefers > the more modest, flexible standards favored by the Bush > Administration > and U.S. carmakers. Ms. Pelosi has refused to budge from her plan to > pass standards like the Senate's, however. And so the House CAFE > showdown has been postponed until the fall -- or until enough > Democrats and wealthy Sierra Club donors can beat Mr. Dingell into > submission. > > Journalists and greens are starting to highlight this debate as a > test > of Ms. Pelosi's political manhood, saying she needs to show the > venerable Mr. Dingell who's boss. But it's more accurate to say this > debate is a test of who has more clout in today's Democratic Congress > -- the men and women who work in American factories, or the affluent > greens on both coasts who can afford to pay a premium to own a Prius > to indulge their concern about global warming. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Create Web Applications With ColdFusion MX7 & Flex 2. Build powerful, scalable RIAs. 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