Senator Obama on Detroit

Senator Obama earned a lot of points in my book today because he took the leadership of the U.S. auto companies to task for being such retrograde, anti-progress morons. From the NY Times (italics mine):

In a speech that hit hard at the failings of Detroit automakers, Mr. Obama, a Democratic presidential candidate, said Japanese companies had done far better than their Detroit counterparts to develop energy efficient vehicles....

"For years, while foreign competitors were investing in more fuel-efficient technology for their vehicles, American automakers were spending their time investing in bigger, faster cars," he said, according to a text of his remarks. "And whenever an attempt was made to raise our fuel efficiency standards, the auto companies would lobby furiously against it, spending millions to prevent the very reform that could've saved their industry."

...In his speech, Mr. Obama proposed stricter fuel economy standards, greater availability of tax credits to consumers who buy hybrids or other ultra-efficient vehicles and subsidies to help automakers pay health care expenses in return for greater investment in advanced technology.

He asserted that his proposals would save the United States 2.5 million barrels of oil a day, which he said would be the equivalent of halting oil imports from the Middle East and would remove 50 million cars' worth of pollution from the road.

I would add that it was U.S. auto workers who paid the price for the car companies' idiocy.

Nicely done, senator.

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Rock on. I can totally get behind that kind of political courage. Corporate campaign contributions be damned, the greedy bastards -- in every industry -- are ruining the country, and it's time someone took a stand against them. That the someone is a charismatic and popular progressive Democratic presidential candidate with a real shot at winning the nomination makes it even better.

Unfortunately, the Auto Workers Union did a fair bit of lobbying against fuel standards, too. The company executives certainly deserve most of the blame, but they aren't the only shortsighted ones in the bunch.

Obama, even if he could win, won't change anything.

Who ya kiddin, Mike?

Unfortunately, the Auto Workers Union did a fair bit of lobbying against fuel standards, too. The company executives certainly deserve most of the blame, but they aren't the only shortsighted ones in the bunch.
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Some would contend that the UAW is run under the business unionism mentality, working with management with a top-down style of leadership, which would explain why the UAW leadership went with the big three on these issues.

When I heard about the automakers' complaint yesterday I thought I could hear them whine "It's not fair! It's not our fault that we're incompetent!" I get the impression that the American automakers will respond chiefly in terms of eyewash--build one model on which they can stick a Green logo, while continuing to build the usual fleet (a GM spokesman said almost as much, referring to a new hybrid Yukon). But by the same token, I see the new Toyota Tacoma pickup is bigger and will likely get poorer gas mileage than my 1996 model.

Can someone explain to me why raising fuel efficiency in cars would result in massive layoffs by US carmakers? My sense would be that it would create jobs, but I plead ignorance when it comes to Detroit economics.

While I agree completely with Obama on this issue, the thing everyone seems to be overlooking here is that the auto companies make more money on a $40K SUV than a $15K economy car. The price is higher and the margins are higher, so they make several times as much on a SUV. The companies want to maximize their short term profits, so they want to convince people to buy as many SUVs as they can. Most car buyers will get one car, so to detroit, bigger cars = bigger profits.