Although the Senate voted to increase fuel economy standards, the standards are too low and take effect too far in the future. (See below)
By Joel Peskoff
At the end of World War II, we turned a similar challenge into an historic opportunity and, I might add, an historic achievement. An old order was in disarray; political and economic institutions were shattered. In that period, this Nation and its partners built new institutions, new mechanisms of mutual support and cooperation. Today, as then, we face an historic opportunity. If we act imaginatively and boldly, as we acted then, this period will in retrospect be seen as one of the great creative moments of our Nation's history.
The whole world is watching to see how we respond.
-President Gerald R. Ford, January 15, 1975
President Ford’s 1975 State of the Union address proposed ambitious programs to cut long-term energy consumption. The programs included legislation for thermal efficiency standards in new buildings; a tax credit for homeowners who install insulation equipment; and legislation which would improve automobile gas mileage by 40 percent by 1980.
Indeed, the world was watched to see how we responded and they saw us deliver very little. Fast forward to 2007 - the Senate passed energy legislation on a meager energy plan that mandates vehicles achieve a fleet average of 35 miles per gallon by 2020. 2020? Big deal. To illustrate how feeble these new mileage standards are, China imposed a 45 mpg standard to go into effect next year. Next year!
Once we consider that only 5% of the automobiles are replaced each year, it’s apparent how modest this plan is. By the 55th anniversary of Gerald Ford’s speech, only half the vehicles will have been built under the new standards, resulting in fuel economy of 32 miles per gallon for the average car on the American road– 13 mpg less than what China is mandating for next year.
What makes it worse is that the automobile industry had to be dragged to the table kicking and screaming, as if the new rules were unbearably strict, which they aren’t. It’s a far cry from Gerald Ford’s vision of "mutual support and cooperation." It shouldn’t surprise anyone. American auto executives historically are the anti-Jobs, as in, Steve Jobs. In the 1960’s, the auto industry resisted seat belts and safety glass; in the 1970’s, they fought removing lead from gasoline.
Carmakers cry that new mileage standards will cost the industry tens of billions of dollars in development and retooling costs and ask Congress for tax breaks to pay for it. It’s a tired and false tune and Congress should dismiss their claims outright.
Let’s not forget that American automakers manufacture and sell cars for the Chinese market. GM China alone has an 11.2% market share in China. That means that on one hand GM tells our Congress that they can’t meet the American standards within 15 years but on the other hand they’ll have to meet the much stricter Chinese standards in 2008. The two are mutually exclusive concepts.
Adam Lee, president of Lee Automalls in Maine said,
"Almost every single one of these safety devices [mandatory seat belts, front air bags and anti-lock brakes] was shot down at one time or another by almost every automobile manufacturer. They all claimed that they were too expensive and they would quote absurd figures as to what it would cost to put an air bag in a car... The American automobile manufacturers have a long history of pleading financial ruin, or that their competition has an unfair advantage, or of trying to prove that some technology like catalytic converters and unleaded gasoline, really is not better for us..."
The reality is that carmakers are constantly retooling and doing it without government handouts. It’s absurd that the industry needs public money to pay for advances set to go into effect in 12 years. Within that time, every car model sold today will already be redesigned several times and their factories retooled accordingly. The government’s mandated requirements can easily be built into those plans.
Carmakers make it seem as if these mileage requirements are difficult to achieve and requires investment in breakthrough technology. Once again, that’s not the reality. Over the last two decades huge advances in technology, paid by company R&D budgets, not government charity has made automobiles far more efficient. However, instead of improving mileage, automakers channeled those efficiencies into performance. The average new vehicle has horsepower equivalent to 1960’s muscle cars.
It would therefore seem that an obvious way to improve mileage is just to scale back horsepower. Other mileage improving technology has already been developed. Honda has an engine already in production that runs its V6 engine on three cylinders when power isn’t needed. Other companies have reduced weight with super-strong materials.
Automakers would have us believe that greatly improving mileage is onerously difficult, requiring unavailable technology. It just isn’t so. Solutions are readily attainable. All that’s required is that we act imaginatively and boldly so that this period will be one of the great creative moments in our Nation’s history.