American Automakers' Addictions
"More on Mileage and Politics: Last fall, after 20 years of strident inaction, Congress finally passed a bill to increase the fuel efficiency of cars, SUVs and pickup trucks. There was a lot self-congratulation on Capitol Hill. The law seemed to mandate roughly a one-third increase in new-vehicle MPG by 2020 - enough to eliminate the oil the United States imports from the Persian Gulf. Sounds great! But as your columnist wrote in December 2007, "TMQ is hugely suspicious … [there is] a waiver provision that says that if the new standards prove too onerous, automakers can ask they be waived. That is a formula for what Washington specializes in: the appearance of dramatic action while nothing actually happens." So what's going on in Washington right now? Pleading poormouth, the big three automakers are already asking for a waiver from the 2015 interim standard, which requires roughly a 15 percent improvement in fuel efficiency. That standard does not take effect for seven years, and already Detroit automakers are saying they can't meet it.
Or perhaps, they don't want to try. Lee Hyun-Soon, president of Hyundai, told the Wall Street Journal last week his company will meet the entire 2020 standard by 2015, and will do so entirely with conventional vehicles -- no complex plug-in hybrids, just sensible engineering using existing technology. Whenever Washington seems to get serious about oil waste, Toyota, Honda, Hyundai and Subaru put their engineers to work -- then build, at American factories staffed by American workers, vehicles that comply with MPG rules. Whenever Washington seems to get serious about oil waste, Chrysler, Ford and General Motors put their lobbyists at work to dilute or evade the standards. There are only 535 people in the United States so gullible they would believe Korean engineers can meet a technical standard, yet American engineers cannot. Unfortunately, those 535 people are the members of the United States Congress.
Has anyone from the mainstream media followed up on how last year's seemingly strict MPG bill is being watered down? As Eric Patashnik of the University of Virginia details in his powerful and timely new book "Reforms at Risk," reporters are often present when "dramatic" legislation passes, then treat the enactment as the end of the story -- paying no attention as lobbyists later water down a bill. As Thomas Friedman points out in his important new book "Hot, Flat and Crowded," the refusal of Congress and the White House to take any real action against oil waste has had the effect of transferring hundreds of billions of dollars to Moscow, and to the oil sheiks who support anti-Western and anti-Israel terrorism. If MPG standards were higher, oil demand would fall. Instead, high demand holds up barrel prices, enriching Persian Gulf dictatorships and Vladimir Putin. Why, Friedman asks, is Russia suddenly confrontational? Because in the past two years, Russian elites have gotten super-rich, owing to rising oil prices brought on at least in part by U.S. stupidity regarding petroleum waste. If Congress grants Detroit the MPG waivers it seeks, the stupidity will march on.
...At any rate, the moment another $800 billion worth of borrowing was authorized, supposedly for "emergency" purposes, lobbyists got to work trying to seize every penny now. The big three automakers are now asking Congress for $50 billion of that $800 billion, supposedly to retool to build the fuel-efficient vehicles they had no way -- just no way on Earth -- of knowing they would ever be required to build. As Paul Ingrassia pointed out in last week's Wall Street Journal, when Congress bailed out Chrysler in 1980, the deal was structured so that if the company recovered, taxpayers got most of their money back. But what's being asked for now is pure subsidy -- money taxpayers will never see again, and that will be used in part to fund the bonuses of overpaid auto executives who got their companies into trouble in the first place. (The Journal opposes the bailout, though the $50 billion would go to Corporate America.) Ingrassia further notes that when Chrysler's Lee Iacocca tried to weasel out of the deal and keep the money that was promised back to taxpayers, Ronald Reagan stood firm and would not budge. Contrast Reagan's sense of civic responsibility to the current president and Congress, both of which just cannot wait to give away other people's money.
Now connect the dots! The automakers are asking for $50 billion in handouts to meet new fuel economy requirements -- at the very time they are also asking for waivers from those requirements. If the past is any guide, they will get both the subsidies and the waivers. The net will be zero progress, more billions of dollars for oil shipped to anti-American forces in the Persian Gulf, and more debt handed to everyone under the age of 30."
Unreal, isn't it? Here we are in an obvious economic crisis, in a situation where Americans should be pulling ourselves up by our bootstraps and finding independent ways to solve our own problems. And here are the American auto companies -- the very same companies that aided our country in WWII by dedicating massive segments of their infrastructure and resources towards building machinery for the U.S. military -- saying they cannot comply with standards designed to wean this country of its foreign oil addiction. Oh, how the mighty have become despicable.
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since: 18 Oct 2004