This is an honest inquiry about the proposed CAFE standards. By that, I mean that I’m writing about something I honstly don’t know about. I read the headlines and everything available to be read. And I still don’t know.
So I’ve come to to share my ignorance.
This isn’t about the deep debate whether automobiles, American and foreign, should get better mileage. It’s about the details of what the new CAFE regulations are, how they will work, and what the result will be.
And it’s like reading the label on the back of a peanut butter jar.
I’m not an expert on cars. I’m pretty good at what I do, which - thank goodness - isn’t writing laws or building cars. But I’m no expert on cars, and laws. I’m pretty ignorant about the whole thing, really.
But I’m an interested observer. I live in Detroit, I know lots of folks in the car business, and I’ve watched the whole car scene for 40 years and counting. And I’ve learned a little about the marketplace, because I’ve been buying stuff, and selling stuff for a long time.
Here’s the quick summary. Oil prices are through the roof, and some think they’ll go higher. Lots of folks think cars should be more efficient. It looks like there will be a new set of regulations that are supposed to improve things. The current regulations aren’t considered appropriate any longer.
Fine so far, I hope.
Where I start to get lost is what the new regulations really say. And I wonder, because the old CAFE standard is full of surprising things, and they have created a marketplace full of surprises. And I know the market can be full of surprises of its own.
I’ve watched folks buying huge, gas swilling cars for a long time now. I’ve watched excellent cars come to market, just to sit on the lot, unloved, because the wisdom of the American Marketplace was not interested in 30 mpg.
And I’ve seen the long term planning of American car makers to coordinate world wide design and manufacturing be ignored by the media. It takes years, for instance, to design a common 'platform' that can be implemented for global markets: not so much because engineers are stupid but because land has to be purchased, factories built, suppliers coordinated, politicians ‘encouraged’, and workers hired and trained. And so on.
Each local variation of design has to be suited to its market. The American version needs more elbow room, for instance, and lots of cup holders. It needs survivability in a crash with an SUV, and it needs more horsepower and an automatic transmission. Which is why the American version of a car marketed worldwide is heavier and more expensive than everywhere else. And why it doesn’t get the same economy .
It seems obvious that a heavier car will get lower mileage than a lighter car, and a bigger engine will get lower mileage than a smaller. My engineer friends say there really aren’t any secrets. And everybody but the network News Anchors know that Granpda’s secret carburetor design is just the old man pulling your leg.
I've learned that there really isn’t much difference in the production cost of a big car and a small car. But there is a big difference in what folks are willing to pay. The perceived value of a small car is less. The perceived value of a big car is more.
The current CAFE standards, caused the building of a certain number of small cars relative to big cars. Since cheap gas and American market choices led to BIG cars, big cars were built. Since small cars HAD to be made, and had to be sold, small cars were made and priced according to the market.
And to nobody's surprise, the big cars made money and the small cars lost money. And specialty vehicles, like the trucks for tradesmen, could only be built in numbers relative to the cars ’in the fleet’, which was a pity because they made a LOT of profit, and the demand could never be met for them.
I’ve watched cars that I thought were pretty cool sit on the lot. Not because they weren’t innovative or well executed, but because the American marketplace wasn’t ready for a hybrid SUV that got 30+mpg in city driving. Urban cowboys wanted V8s, big tires, and zero aerodynamics, that resulted in 15 mpg. So, the big gas hogs were made in huge numbers, and millions of dollars went down the drain developing better vehicles.
If you haven't given up yet, I figure you're probably politely reminding me that Detroit has been forcing Americans to buy big crappy cars instead of cute little cars for decades, and that if Detroit actually made a good little car, people would buy it.
Maybe, I guess. But in my little business, I’ve know that THE MARKET will buy what it wants, regardless of whether I think it’s what they should buy. I think it’s pretty much the same in all markets, even though I’m neither an economist, Republican, or rich. I’ve NEVER been able to force my little market, even when the customer was dead wrong, and I’ve never seen the automakers do it either.
So, the problem with the CURRENT CAFE is that establishing fleet standards has no bearing on the marketplace, it just ties the hands of the automakers trying to meet the desires of the buyers. CAFE has had no effect upon what the public wants to drive.
My own view is simply that when gas was cheap, Americans wanted big honking cars, and when gas was expensive, we wanted little cars. And the automakers try to fill the need. And make tons of money.
Being a tree-hugging, granola crunching kinda guy, an overeducated child of the ‘60s, I think getting 60 mpg is pretty darn cool. Of course, I learned along the way that carrying a load of bricks and building supplies in an economy car is far more costly and fuel inefficient than in a pickup truck. So, I’ve got as small a truck as I need for what I do, an F-150 with a manual transmission and a small engine. Talk to me when I can load drywall into a Prius.
The truck does NOT go to shopping malls. It goes as few miles as possible, and I walk to the store, or ride my bike. I don’t own a second car, and will replace my truck when I don’t need it, or when something better comes along. I know what I want, a vehicle Ford offers in Europe but I can’t get here because its a super-efficient diesel, and it can’t run on the crappy fuel we’re stuck with in the USA.
For that matter, there are lots of neat cars available in other parts of the world that COULD solve a lot of our problems here, but for one reason or other they won’t go on the road here. I think that a Ford KA getting t-boned by an Escalade is a scary proposition, and that might be one of the reasons we won’t see the smallest eurocars anytime soon.
The thing I really don’t know, that I can’t find any reliable information about, is HOW the new CAFE will work. The most information I’ve found is from a couple conservative friends that KNOW their business, even if they voted for "He-Who-Must-Not-Be-Named." It looks like the fleet performance increases will be applied uniformly, which is a troublesome idea.
It seems to me that you get better efficiency with a smaller engine than a larger engine, and you need to design the surrounding car accordingly. I haven’t found a half ton truck to get better mileage than a 2 seater car with a 1.3 liter engine, so maybe there’s some truth there. Making a car smaller and lighter is the way to get better efficiency, and today we choose how small we can go, and get the relative fuel efficiency.
If we want to lower fleet gas consumption, and demand a given improvement across the board, does that mean we expect small efficient vehicles to somehow get that much better ? And can we expect BIG vehicles to get better, given they have to still haul a load ? The only way it seems fleet efficiency CAN improve is to take gas guzzlers away from dentists and soccer moms.
Of course, magic COULD happen, and I don’t know that it can’t. Fuel cell technology can materialize by edict, and hydrogen pumping stations can show up next to the local gas stations. But that’s kind of like betting Jetson air cars will come along. I don’t see it happening, I don’t know HOW a Hummer can triple it’s gas mileage. Or a Prius could improve by 20%.
But it seems that if I could get that diesel Ford that’s on the road in England, I could reduce my gas consumption by half. More than half. OR if folks bought excellent small cars like a Mazda 5 or an Escape Hybrid, instead of SUVs or minivans, consumption could be cut in half.
But that’s a market choice. You can’t compel folks to buy what they don’t want to buy.
It seems, though, we can legislate what carmakers will build. And I don’t really get it. It isn't like keeping melamine out of my peanut butter. I don’t see how the proposed CAFE can be accomplished, without some sort of unforeseen technology dropping down from the sky. And even if it CAN be done, improving the mileage of a Prius or an F-150, how will folks be encouraged to NOT buy that big SUV or luxury car ?????
The only way gas consumption will be reduced is to get the guzzlers off the road. That alone would greatly reduce our fuel problems... with current automobiles. Further improvement could be met by building smaller cars in the US, which are already proven in Japan and Europe, be they current Ford, Toyota or GM vehicles.
I just don’t understand how anything can be accomplished until the ‘average american’ WANTS a small car instead of a big one. And I don’t see how new CAFE can accomplish that.
I guess even progressives can be confused. I am. Thanks for taking the time to look this over.
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