Tomorrow the White House will announce new federal fuel efficiency standards for motor vehicles that will require a 35 mpg fleet average by 2016. This standard will also serve as a de facto national greenhouse gas emission standard equivalent to the standard adopted by California, prompting California to "stand down" from pursuing its own separate GHG standards. I have also heard that, in response, the major automakers will drop their various challenges to state GHG standards. Do not be surprised if this new rule also becomes the new GHG emissions standard under Section 202 of the Clean Air Act. The NYT has more here.
UPDATE: I am quite sure this -- and not a pending Supreme Court nomination -- is the reason Gov. Granholm will be at the White House tomorrow. If I'm wrong, I'll owe Orin a beer.
Related Posts (on one page):
- More on the New Auto Emission & Efficiency Standards:
- New National Vehicle Emission & Efficiency Standard:
It's stunning, moving that timeline up 4 years like this. The 2013 programs are basically done right now... scoped, budgeted and turned over to their respective product development teams.
You couldn't bring an all new powertrain into those programs in the intervening model years, absent waterboards and a money printing machine. And bubbye profitability, if you try. It had to have been there by now.
And MY's 2014-2016 had to already be in the OEM's cycle plan, and the technologies to be used in them has to be near implementation ready today, i.e., ready to be plugged into a specific vehicle program in a responsible way, using responsible cycle planning. For example, there will be no hydrogen in those MY's, because it's not implementation ready.
And this clueless community organizer thinks he knows the path, to take the entire passenger vehicle fleet to a 53% increase in fuel economy, in 6 years? I guess taking over Chrysler and firing Wagoner has given him a lot of confidence in his abilities.
Meanwhile, there'll be more 50-passenger mass transit busses and rail cars carrying four passengers each.
A few years later, the bodies were downsized and a lot of new technology was used (second generation). The new technology was a problem for a lot of people. About the third generation, the US manufacturers started to get their act together. That was more than 10 to 15 years after the first deadline. I have had good US automobiles since then.
I figure we will see 10 to 15 years of crappy cars with this.
If a company does not meet emission standards it will be fined. The fine will be included in the cost of the vehicles.
The question is: will it include light trucks? That is a big loophole. Big enough to drive a truck through.
Those models are already designed and the production process has started.
It is a tax.
This is consistent with the Chrysler plan to sell Fiat cars in the US. Will the US car buyer suddenly want to drive CAFE inspired small cars? Some might (see the Prius) but I suspect a car company that gears its product line around this strategy won't sell very many cars and will lose even more money than GM/Chrysler/Ford already have been.
GM and Chrysler are under new management, which has a money printing machine. And which would be much more comfortable waterboarding American engineers who selfishly refuse to design water-powered cars, than foreign terrorists.
You know, I suspect not. It would be suicide to do so. The first OEM who starts turning out substandard product, in the information age, might as well shut the doors, because sales will plummet like a stone. They'd all have to slip together, which is possible I guess.
My guess is, the feds'll just fine the OEM's for non-compliance, same as they've been doing all along, and everybody just goes on about their business. Fines to be forgiven, depending on campaign contribution dispersals, free corporate jet flights, UAW pressures, etc.
This fresh meddling is for show, me thinks. The feds need to preempt the California fruits and nuts, and this is the way to do that.
But it's still so much useless blather and background noise, which the automotive industry needs less of, not more.
There's no reason to change the teams, just alter the balance of which cars are sold with which options. You can change the average fuel efficiency without changing a single model just by futzing with the proportions.
How do you do that?
You simply don't produce the less efficient cars, or produce them in small numbers (at considerably elevated prices). People can't buy things that don't exist. Now, this is likely to annoy customers and won't exactly help the car companies either, but there's no question it's technically possible.
This assumes, of course, that the car companies were dumb enough to realize that something like this was coming. Of course, dumb seems to be a standard trait of American car companies, so...
Don't change what you sell, just mandate different consumer preferences. But I think in the end what you end up with is if you won't sell consumers what they want, they won't buy anything at all. The auto industry is a consumer industry, at least half the cars sold because of a desire to buy, not a need to buy. Eliminate the desire and you'll eliminate half the demand. Check out this car review as an example.
When we say that the 2013MY programs are already in the hopper, that means sales volumes, financials, prices and production levels are already in the box, as well. Now, Obama Motors may throw those out the window, but welcome to Eastern Bloc Motors, if he does, because you taxpayers will own that company. We have a lovely shade of black this year... for everybody.
Supplier contracts are already signed through the 2011MY, if not beyond. I'm sure CEO Obama won't mind adjusting those contracts, for the revised and lowered volumes, with attendant cancellation fees, to accommodate his wishes.
He can also pay the additional costs required to buy his way onto supplier order books for the NEW parts he's decided to sell, for all those new vehicles in his revised production plan, at this late date. That is, if he can find somebody to ramp up those levels of production for those parts.
Now, you'll have to find customers to pay that additional cost for all those vehicles, costs you've suddenly driven into them.
The answer is no, it is not technically nor realistically feasible to adjust the product mixes already planned, not without significant cash outlays, or even then. This should be intuitively obvious.
The cited NYT article says:
Other than the philosphical aversion to government meddling in corporate affairs, I don't really see this as that damning. There will be fewer F150s, and those that are produced will run on ultra low sulfur diesel; that alone would meet the new standards.
Perhaps some of you suburban warriors in your 10 mpg suv's will hang on to them as the category becomes obsolete, but I suspect the status symbol of a 10 year-old Lincoln Navigator wont be quite the same as, say, a bluetec Benz.
Goodbye, Hummer. Too bad GM invested so much into such a waste.
Alter the pricing structure so that more buyers chose the more thrifty powertrains for their chosen model. Automakers like to boost their margins by coupling trim levels (and hence options) with powertrain upgrades -- you have to get the V6 if you want the sunroof when it's unclear that consumers necessarily want both.
Actually, it was a minimal investment, and they made a KILLING off that investment. Were but they would have made others similar.
I knew some of the program management on that program, and it was quite revolutionary. It proceeded very rapidly, and pushed the envelope in product development timing. They did this by platforming on the Silverado. That's right, the evil Hummer is just a reskinned Silverado. Very cheap product development cost.
We took one into the studio and stripped it down for comp res purposes. Bodywork gaps, margins and flushes were sloppy, and overall workmanship substandard, but they got it out quick and MADE A KILLING OFF THAT PROGRAM, for several years running.
Of course, who cares about making money off vehicle programs? With Obama Motors, other things are far more important than that foolish notion.
Ford was cleaning up on the Excursion, too. 40,000 sold per year, but about $20,000 pure profit from each one of those. That would be $800M clear profit each year, off one vehicle program, in case you're counting. But, the greenies won out, and Ford gave up on that profit, and cancelled the Excursion.
Thank goodness for government. What would the auto industry do without it?
I am for these sorts of changes though I think they may be a tad too aggressive (so my concern is on details not methods). Better fuel efficiency is good for our nation's energy independence, and hence good for our national security. It is also good for the environment, which is a nice side-benefit.
I guess my next truck will have to be a two-ton.
Point taken about the Silverado as the base for the H2; they made money in the short run on it. It's done super-fantastic the past few years, hasn't it.
But, uh, just for the sake of consistency, weren't you *just* arguing that it was impossible to roll out new autos on such a short schedule? I'll just defer that point to your bitchin' car knowledge.
Uh, be without roads, global petroleum security underwriting, traffic cops, etc. There would be no *interstates*! Now that would do wonders for GM and Chrysler. Adding a few more mpg to their standard is NOT that big a deal, especially when the new standard can largely be met by changing "light trucks'" inefficient gas engines to clean diesel (which can also run on bio, at this point un-subsidized).
What's the big deal? On a 45,000 truck, a $2,000 upgrade to a diesel engine isn't going to break the buyer (especially with tax incentives). On commercial passenger vehicles, these companies have been saying that they have plans in the hopper for better mileage, anyway.
With a stupidly low towing capacity to boot.
Hmmmm, so you consider the Hummer a "new auto"?
Well, it doesn't take much "knowledge" to understand that reskinning an existing platform isn't a new vehicle, and certainly not the changes required to engineer and develop a new vehicle with a 53% increase in fuel economy.
However, reskinning that vehicle did take place in <3 years, which as I say, does make it revolutionary timing. Obama Motors won't see that kind of timing with their coming changes.
Heck, I'd recommend the OEM's reskin any vehicle they can make a killing offa, similar to the Silverado/Hummer's. Unfortunately, Obama Motors has other plans in mind, and they don't include making money, it appears.
Actually, when the diesel fuel requirements changed a couple years ago, International increased the price for their product about $4,000 per unit, and it'll run you about $7,500 over gasoline. There won't be any payback on these diesel vehicles, biodiesel or otherwise. Medium fleet customers have been moving away from diesel for several years now, to avoid their excessive costs of ownership.
Try to keep up.
"But the standards will require huge investments by auto makers to remake their U.S. fleets so that they have roughly the same overall efficiency as vehicles they now sell in Europe"
So, no problem.
Sorry, had to bail the office. I know it's bad form, but I'm about to bail here as well. I have a life away from this evil box in front of me...
Where I live, diesel fuel is currently about .10 less than premium gasoline, about the same (depending) as medium, and .10 more than 85 (not E85). 30% bio is available at the same cost as premium gas, and it runs smoother. I bought an '05 Jeep Liberty with a MB bluetec and it gets high 30's on the freeway and mid 20's in the city, plus it's a blast in the mud and the turbo makes it haul ass, and importantly, heavy loads. It cost *the same* as the 3.7L, has a much longer lifespan, and demand blew out supply, but was discontinued.
Jeep instead opted to put a larger diesel in a Grand Cherokee, so they may not have made as much on this model; but there was demand outstripping supply. I thought that was #2 on the libertarian ten commandments (after step away from my gun).
As to CA standards, it is true that this car was not available in CA; however, that is because Ultra Low Sulfur diesel was not mandated there at that time. Now that that standard is in CA; MB is introducing diesel models on all its top SUV's, and VW's TDI is all over (and at 50+mpg to boot).
So, I think the technology is there, and is ready to implement; just cut down on the huge cars, but those "light trucks" that are left are made diesel.
BAM!
done and done. What's the tizzy about?
I think he's looking at something similar here. He needs to throw out the boob bait, sure, but behind that screen, will this be a departure from Bush policy? I question that.
I think the feds want to preempt California on all this, and make sure that they and they alone blanket the country with operative regulation. That's the congresscritters' and the Beltway crowd's prime interest here... power.
Frankly, I'd rather the feds stay out, and let the OEM's just tell California to go to hell, and not sell there. That's what Chrysler, BMW, VW and others have been doing over the last decade or so, with various models. But Obama's now solved that problem, by taking over Chrysler. Maybe he can do it with all the rest, too.
The technology for diesel particulate emissions control has only recently been manufacture ready, within the last 4-5 years or so. This diesel emissions control costs more, much more, than that of gasoline engines.
I'd also have questions about reliability of these new diesels. As I recall, Ford had issues with the Powerstroke turning into a flamethrower in certain operating conditions, and longterm durability is always at issue, until it's been out there longterm, of course.
The compression ratios for diesels are near double that of gasoline engines, meaning more iron in the engine, to contain that reaction. Thus, it's a heavier and more costly engine technology. They remove some of this weight by reducing cylinders and boosting with turbo, but this too adds cost, complexity, reliability issues, etc.
We're only seeing diesels implemented on pricier vehicles, because a $12-15k price point won't support that additional cost right now. I think we'll continue to see diesel in premium models only, and those requiring increased torque.
I am interested in that diesel VW TDI, however. Are they certified in limited numbers only? I've never been able to get good information on that rig. It does seem to run up to the $25-30k point, from what I've seen.
And if the law of supply and demand causes the price of gas to rise, Democrats will shriek about "Big Oil".
I don't understand why $5 (or pick your price) a gallon gas is so wicked if the money ends up in the private sector, but suddenly, magically becomes virtuous if the money ends up in the greedy maw of Big Government.
Rosetta: Nobody made the choice to make a bad automobile after the first oil embargo. The technology was just not there to make it work.
I remember when the Carter administration mandated that all trucks have anti-lock brakes -- because I worked on their design. There were no such brakes in existence at the time. Some of the mechanical anti-lock brakes used in sports cars were scaled up and had the same problems they had in sports cars. They were VERY easy to get out of sync. When that happened, it was worse than having regular brakes.
My company tried electronics. Being in the late 1970's that did NOT mean computers. It was analog. In fact, my company bought its first "desktop" computer for the engineers to use in design. It was a Wang that cost about $20,000, did not have a harddrive (it used cassette tapes), and had 8K memory (that was an expensive upgrade from the standard 4k). Note that I did not say meg or gig.
Our attempt did not work any better than the mechanical systems. A few years later, a judge threw out the law when it was proven that the "safety law" had increased accidents rather than reduced them. No one planned to do that, but the technology did not exist to do what the law required.
Antilock brakes are standard now on large trucks. They work. The difference is that they have computer chips in them that are as powerful as the room sized IBM computers used for accounting back in the late 1970's.
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