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Connecting the dots: The mind-numbing stupidity
of GM and the American auto industry
by Mr. Chuckles Saturday, July 5, 2008
PERMANENT LINK
Automakers fought for years, both in court and in the halls of Congress, against state laws requiring fuel efficiency and pollution reduction. They fought themselves into a death spiral, waging a futile war against intelligent people of vision and foresight.
Today GM surrendered, after squandering untold billions of dollars and costing millions of American jobs — despite claiming for years that doing the opposite would cost billions and destroy millions of American jobs.
Adding insult to our injuries, all of a sudden GM can produce 40 MPG cars, something they claimed would be impossible to do before 2016 without massive cost increases and technological advances. Has there ever been a more self-destructive company with such fat headed management that survived for so long?
GM may sell mini-cars to fuel-conscious U.S. buyers| |
Excerpt: GM may bring the production version of the Chevrolet Beat to the U.S., people familiar with the plan said. The car, which would normally be reserved for markets such as Asia and Latin America, gets as much as 40 miles a gallon, a fuel efficiency topped in the U.S. only by hybrids. ...
GM, turning 100 this year, has few options to re-inventing itself. The company reported its largest annual loss in 2007, $38.7 billion, after a tax accounting change, and hasn't had a profitable year since 2004. The carmaker's U.S. market share hovers at the lowest level since 1925, and last year GM was 3,000 cars away from being dethroned by Toyota Motor Corp. as the world's largest automaker.
The company's current market value is smaller than that of Mattel Inc., maker of Matchbox cars, and a 10th of what it was in 2000. A Merrill Lynch analyst said yesterday that a GM "bankruptcy is not impossible if the market continues to deteriorate.'' |
State, auto industry face off in court over greenhouse gas law| |
Excerpt: ... Lawyers for the state and the auto industry clashed over the fine points of a California law that would force manufacturers to significantly reduce vehicles' greenhouse gas emissions, starting with next year's models. The auto industry, arguing that the technological obstacles would explode the prices of new vehicles — harming sales and erasing tens of thousands of jobs at America's auto plants — is suing to have the law tossed out. ...
The flood of litigation shows how California has struggled to turn its lofty ideas on global warming into something with teeth. It has been fighting the automakers for three years over AB 1493, which passed in 2002. The fight with the EPA could mean considerable delays in implementation of the law. ...
Monday's tussle turned on a key argument by the automakers: that the California law would require a huge leap in fuel-economy standards, an issue they say is exclusively under the authority of the National Highway Traffic Safety Administration. The automakers contend mileage standards would have to improve to 43 mpg from the current 27.5 mpg for passenger cars by 2016.
"They call it a greenhouse gas regulation. ... At its core, this is a fuel-economy standard,' attorney Andrew Clubok, representing the world's automakers, told the judge. He said California regulators' internal documents refer to "the dreaded two words: 'fuel economy.' "
Clubok said California is doing something that is fundamentally unfair. It is seeking a "free license" to impose its will on Michigan, Ohio and other states where car manufacturing is a big part of the economy.
"This regulation will lead to job losses — the only question is the magnitude," he said.
Automakers have calculated that AB 1493, which was signed into law by then-Gov. Gray Davis, could raise vehicle prices by as much as $6,000 per vehicle. "There's no free lunch," Clubok said in an interview during a break, adding that job losses in auto plants would total at least 65,000 as vehicle sales plunge. |
Automaker suit against greenhouse-gas regulations
may be dismissed as early as tomorrow afternoon| |
Excerpt: If the suit is dismissed, it will be, in practical terms, a much more significant consequence of Mass. v. EPA than any regulations EPA is likely to pass during Bush's presidency. It will set the stage for California and eight other states — possibly soon more — to implement tough greenhouse-gas regulations on vehicles.
That would be the automakers' worst nightmare: CAFE standards or no CAFE standards, state air-pollution standards would force them to start making fuel-efficient vehicles.
Some background: As most GRIST readers know, in 2002 California passed what's known as its Pavley law (AB 1493, named after California Assemblywoman Fran Pavley), instructing the California Air Resource Board (CARB) to develop and implement greenhouse-gas restrictions on new vehicles, beginning with the 2009 model year. In 2004, CARB approved such regulations, which would require around a 30% reduction of greenhouse gas emissions by vehicles by 2016. Those regulations have since been adopted by eight other states (two more states are considering them). |
Mr. Chuckles
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