Today's Washington Post confirms what I suspected, the new automotive fuel efficiency standards to be announced today will double as national vehicle emission standards for carbon dioxide (which only makes sense, as controlling fuel economy limits carbon dioxide emissions and vice-versa). It also explains why the automakers would accept the deal: "clarity and predictability," along with a single national standard It will also raise the average price of new cars by several hundred dollars, some portion of which will be offset by fuel cost savings.
Under the compromise, the federal government would establish two sets of standards, one for mileage and one for tailpipe emissions of carbon dioxide.
The Transportation Department's National Highway Traffic Safety Administration would set the new fuel-economy standards, which would raise the average fuel efficiency of a new car by 30 percent. Cars, for instance, would need to average 39 miles per gallon by 2016, while light trucks would need to reach 30 mpg.
The EPA, using its power to regulate carbon dioxide emissions under a 2007 Supreme Court ruling, plans a tailpipe emissions standard of 250 grams per mile for vehicles sold in 2016, roughly the equivalent of what would be emitted by vehicles meeting the mileage standard. Vehicles sold in 2009 are expected to emit about 380 grams per mile, industry sources said. The EPA needs to go through a rulemaking process to allow responses before the standards would go into effect.
One person involved in the negotiation said the Supreme Court's ruling on regulating emissions helped push companies to bargain because they feared the prospect of having to comply with separate EPA standards in addition to those from NHTSA and California.
"That's what brought the companies to the table," the person said.
The other thing the story notes is that the EPA will also go forward with standards for vehicle air coolant emissions, and that compliance with these rules may generate credits toward meeting the fuel economy standards.
Related Posts (on one page):
- More on the New Auto Emission & Efficiency Standards:
- New National Vehicle Emission & Efficiency Standard:
Even if you pay for that several hundred dollars at an interest rate 3 times inflation, you'll break even before 100,000 mi.
If you are considering a car with decent horsepower, plan to buy soon.
Has anyone calculated how many people this regulation will kill?
So why isn't Congress regulating emissions around the world? The power to regulate commerce among states is the same as with nations.
At 28 mpg a car will use 3571 gallons in 100,000 mi.
at 32 it will use 3125 gallons in the same distance. At $2.50 the difference is $1,116. I doubt that the increases in technology needed to achieve this mpg savings will cost less than that amount, and 5 years of driving for the average driver is not "rather fast."
Well, you can't have everything...
Current standard = 27.5 mpg. (source: http://www.nhtsa.dot.gov/CARS/rules/CAFE/overview.htm)
I think you get a clearer picture using the inverse. Here's a table.
10 gal in 100 miles = 10 mpg.
5 gal in 100 miles = 20 mpg.
4 gal in 100 miles = 25 mpg.
3 gal in 100 miles = 33.3 mpg.
2 gal in 100 miles = 50 mpg.
1 gal in 100 miles = 100 mpg.
27.5 mpg = 3.6 gallons per 100 miles.
39 mph = 2.56 gallons per 100 miles.
You can see that going from 10 mpg to 33.3 mpg saves 70% of the gas. You can also see that the reductions available in the future are limited.
The 30% savings number seems to come from the following:
27.5 mpg = 3.6 gallons per 100 miles.
39 mph = 2.56 gallons per 100 miles.
27.5/39 = .705 or 30% less.
The average weight of passenger vehicles must fall dramatically, in order to achieve this 42% increase in fuel economy across the total fleet. Powertrain technology alone cannot achieve this increase, certainly not by a date certain 6 years from today.
Weight or power. Take your pick. You only get one.
Problem arises if they give you a choice of weight or safety...
They do appear to be retaining the truck classification, and I'm sure they've also retained wiggle room there, for your ocean liner SUV's.
And that's before you consider the impact on demand from a nationwide standard. With it pretty clear that demand is rising for oil exponentially given the huge number of people entering the middle class (er, before the recession, but also after) that is critical. From a cost-benefit perspective, this is a total no brainer.
I'm sure that this do will wonders for the profitability of car companies, too.
I'm sure it will. The fact is, if we had imposed stricter vehicle emissions standards and closed the SUV loophole ten years ago when we should have, then our auto companies would have spent most of the past decade desiging the fuel-efficient cars that will be able to compete with Japanese and European imports. Now what we have is dozens of factories producing gass guzzling cars that nobody wants, that have to be retooled at great (and largely taxpayer) expense.
Sometimes the governemnt is smart, and sometimes the market is retarded. The Japanese and MITI saw the coming oil crisis way ahead of time and started preparing for it. Our market driven auto companies saw the same threat and completely ignored it chasing the short-term dollar in the SUV craze.
I believe this particular myth goes back to the story of the time that Orpheus descended into the underworld to rescue his wife Eurydice from the clutches of a Ford Focus.
The government is always retarded, and the market is always whatever the market is.
The Big 3 produce all the 35mpg vehicles you want. You want one? Go buy one. They're sitting on the lot. Buy one. It's a free market, for now.
People buy SUV's because they want SUV's. That's the market. It is whatever it is.
What you really mean, but are too deceptive to say, is that you hate the market, and want to control what people do, drive and buy.
Amazingly, there are family vehicles that both hold more than two children and AREN'T Expeditions. And they also get 25% better gas mileage. Who knew?
Yes, those calcs are out there, and it will be in the thousands.
It's too bad those dead people weren't spotted louseworts or something worth saving.
Oh God, WIN.
What I really mean, and am perfectly capable of saying, is that the market is a tool to be used, not a God to be worshipped.
You should convert that into gallons per mile, as SeaDrive suggests. The savings is not constant for "each extra mpg," if you hold the miles in a lifetime constant. The savings from 28 to 29 is indeed ~$308. But the savings from 32 to 33 is only ~$237. From 33 to 34mpg is only ~$223. By comparison the gain from 20 to 21 is ~$595. The marginal returns decrease rather quickly as MPG goes up, because mostly people want to consume a certain amount of miles (or a car does a certain amount of miles in its life), not consume gas directly.
It's not a myth, it's physics. Please try to be reality-based, at least somewhat. Small cars are more dangerous. Tall cars (SUVs, etc.) are more dangerous than a car of equal size but low to the ground too, of course, so buying a giant SUV for safety is dumber than buying their kid a Lincoln Town Car for safety. But small cars are more dangerous than a larger car of the same size. The IIHS found mini cars much more dangerous when crashing into mid-size cars; a Toyota Yaris was at severe danger from a Camry.
It's not all car-on-car collisions, either. A substantial portion of crashes are car-on-stationary object, where other people driving smaller cars doesn't help. Clearly at some point a smaller car might make it easier to avoid a crash.
Did you know that almost all the European car companies pay the CAFE gas guzzler fines because they don't meet the current CAFE standards? And that Japanese and European companies manufacture lots of larger cars, especially to sell here, in Canada, and other places with lower gas taxes (like Thailand.) The Japanese and German manufacturers happily moved into the SUV, light truck, and crossover market because that's where money was.
Our auto companies would have spent most of the past decade losing money had they made more compact cars. Our auto companies had to make light trucks (or luxury vehicles like the Germans) to be profitable because the margins are higher there. The margins are lower on small fuel-efficient cars; to make them profitably you need the lowest labor costs and/or highest productivity in the industry. US car companies haven't had that for decades. (And the UAW contracts, combined with bad management, meant that that wasn't going to happen. Government regulation wouldn't have made them any smarter.) The Detroit companies have been losing money on every compact car sold, producing them only to meet CAFE. Had the requirements been stricter, they would have only lost money faster, because their productivity and labor costs made them inferior to the Japanese competition.
This is wrong in every respect.
First, GM, Ford and Chrysler do make fuel efficient cars. People just like Toyota's and Honda's cars better. That's why GM and Chrysler managed to lose billions well before 2008's spike in fuel costs which, by the way, has largely abated.
Second, Toyota makes trucks and SUVs too. Lots of them. Do you think they became the world's largest car company on the strenght of the Prius? More like the Tundra, 4Runner, Landcruiser, etc.
About 50% of vehicle fatalities involve single-vehicle incidents, where vehicle size disparity is not an issue.
And there is no question that vehicles of larger mass are safer than vehicles of smaller mass, in all incidents.
Remove mass, as these new regs will undoubtedly do, and you are sentencing people to death.
Like I say, it's too bad those dead people aren't red breasted mud minnows, or something else worth saving.
Yes, to be sold for export in the American market. But for the Japanese market, they sell fuel efficient cars, and that is why eight of the top ten cars in fuel efficiency are Japanese. The other two are European, and none are American. That is a list that reflects the degree to which American, Japanese and European car companies have made fuel efficiency a central aspect of their strategic planning. And over the past few years and into the next decade, American car companies are going to be paying the price for that irresponsible and frankly idiotic strategy.
The harsh reality is that the Japanese car companies, while not in the bad shape of GM and Chrysler, aren't doing well, either. The reason is the economic collapse. Remember that they are building low gas mileage SUVs and trucks, too, and for the same reason: there's strong demand for them.
Remember also that part of why SUVs took over the market in America was because environmentalists messing with the market. The CAFE requirement that passenger cars get 27.5 mpg originally only applied to cars built in the U.S.--exempting the imports. This led to bizarre, energy-wasting stuff such as Toyota shipping American-made 4 cylinder Camrys to Japan, and importing 6 cylinder Camrys from Japan. The American-made ones met their CAFE numbers; the 6 cylinder versions from Japan didn't count.
To hit that 27.5 mpg number, one of the first products to disappear were the traditional eight and nine passenger station wagons commonly used as big family movers. But the need for those didn't go away; instead, big families bought first vans, then minivans, then SUVs, because these were not subject to CAFE, then to a much lower standard. We would have been better off if those families had stayed in the station wagons, not moved to SUVs.
Environmentalists keep interfering in the market place--and then complaining that the market doesn't work.
No, Obama Motors insures that the American taxpayer is going to be paying for irresponsible and frankly idiotic strategy.
Now, we could have allowed those companies to pay for this, by letting the market work, but our retarded government hates markets, much like you.
Tough to blame environmentalists for a policy that they opposed. I'd say it's more like, environmentalists keep "interfering" with the market and industry keeps finding ways to undermine environmentalistal policy, owing to their ludicrous degree of greater influence over our political process. See also the crappy cap and trade bill that we were discussing yesterday.
The problem is that some people do need a light truck or van for work. Other people just want one. A normal way to decide between need and want is a tax to raise the price.
But without doing so, it's difficult to determine who "needs" a car like that. The government wasn't going to have Gestapo investigate people to see if they needed it. CAFE is supposed to control the overall mix of cars, but how do you determine who gets the trucks? How do you tell who needs them? Without a tax, the car companies couldn't just raise prices too much on those cars to shift some people to smaller cars and meet CAFE without the other companies cutting prices to steal the sells of those profitable large vehicles.
A similar problem occurs between people who want a larger car, and people who feel that they need one because they're tall and have several tall kids to transport.
CAFE doesn't work; a tax does.
Now we're going the other way with CAFE; the idea is that the standard for a vehicle will depend on its weight and size. While this seems fair to the large families that need a larger car, it can create the bizarre situation that a high performance Honda Civic Si won't qualify under the new standards, whereas a larger Honda Accord V6 gets worse gas mileage but qualifies because it's larger, and larger vehicles have worse standards.
Abdul Abulbul Amir above is right. This one way of closing the SUV loophole is fairer to large families and those who work, but it's going to really hurt the sport compact market.
Even then, the difference between the best gas mileage American and import sedans isn't enormous. The best Honda Civic model gets 25/36; the best Chevy Cobalt model gets 25/37. Even comparing the worst mileage of these models isn't huge: the worst Honda Civic model gets 21/29; the worse Chevy Cobalt gets 22/30.
If I owned a 100mpg auto, I'd never ride the train. I'd drive from SF to LA rather than flying. I wouldn't bother to consolidate trips. I'd commute by car rather than by bicycle. In short - like most drivers of high efficiency autos - I'd drive more, and consume even more fuel.
Making driving cheaper ("more efficient") means that we'll all drive more.
There's plenty of blame to level at the American auto industry for letting the auto side of the product mix wither on the vine while concentrating on trucks. There's simply no excuse for the fact that the Ford Taurus was not substantially updated from 1996 until it was killed (briefly) in 2006, and there's similarly no excuse for Ford's failure to replace the Contour with a decent mid-sized sedan, or Ford's bewildering decision to take the Focus and dumb it down instead of replacing it with the very, very strong EU market product.
However.
Toyota should not be overly feted for its efforts in fuel economy. As DEM points out, Toyota's growth over the past 10 years has been essentially entirely on the back of large, fuel-guzzling vehicles like the Tundra, Sequoia, Highlander, and so forth. Toyota has taken small, fuel-efficient vehicles and replaced them with much larger, heavier, less efficient products, like the Scion xB or the RAV4, both of which packed on hundreds of pounds over the years. The fact that Toyota builds Priuses shouldn't get them off the hook for this--if you are going to blame the companies for following the market, blame Toyota, too. Don't fall into the trap of letting them greenwash themselves.
Anyway. I would be remiss if I didn't take this opportunity to point out the obvious: If you want people to buy fuel efficient cars, make fuel efficiency something that people want. Do that by raising gas prices. That has the effect of encouraging conservation in *everyone,* not just those who are thinking of buying a new car.
But that would make the cost of higher efficiency obvious, which is something that no politician wants.
Well, it is a lot of theater. Environmentalists end up supporting ideas like CAFE and cap and trade because they believe that they're sneakier and easier to sell politically because the costs to the consumer are hidden. However, they're also easier to sabotage so that there are no actual environmental benefits.
Luckily, the median voter and moderate politicians (Dem and Rep) get what they want-- "seeming" to take action without really doing anything.
In fairness, the median voter is a hypocrite and doesn't want this either. The winning politicians are giving them what they want. The American people beg to be lied to, and punish politicians who don't.
Ah yes, environmentalists wanted the government to "do something" and now they discovered that the Democrats are thoroughly corrupt. What a shocker.
Environmentalists could push for a higher gasoline tax, if they want to "enlighten" the masses. But politicians who do that tend to lose elections.
Taurus was an extraneous model, particularly after the "500" was introduced, when they were manufacturing both platforms. Now, they've renamed the 500 as Taurus, killed off the old platform, and they're good to go. The error here was not in delinquent product freshening, but in delinquent product cancellation. Ford had and still has too many platforms.
Contour was far too expensive for its target market, small car buyers, and competed with Taurus at both price point and market. Again, it was an extraneous platform. It died because it should have died.
Again, like the Contour, which was a Euro product, the Euro Focus was far too expensive to produce to compete at the small car price point here in NA. It is a Euro sorta luxury platform, and not at all analogous to what's required in the NA market. The NA Focus is. It's "dumbed down" to what the customer wants and will pay for, at the $9-15k value. That's how market work, you give them what they want... SUV's, small cars, whatever.
Believe me, I dislike automotive marketeers as much as the next guy, but money talks, and the above were all money decisions. And the wrong ones Ford marketeers made were in not cancelling vehicles, and streamlining their market offerings. Mercury shoulda been dead 10-20 years ago.
I love this exchange because it so simply and clearly illustrates the fundamental assumptions of each side. That is to say, on one hand people look at the market as simply a reflection of people's preferences - their dollars voting on their desires. And on the other hand, we have people looking at the market as a means to achieve their desired outcome, to be discarded if the outcome the market produces differs from their preferences. There is simply no way to reconcile these two fundamental beliefs about life.
Well, I know that there's a climate crisis and an oil crisis, and I also know that people making private decisions face numerous obstacles to making socailly productive choices, and yes, I think the government should lead with an eye towards our collective long-term well being. The alternative is a society that is completely unable to deal with long-term problems or problems that require concentrated public action - which is more or less the economy we've had over the past decade and has now come crashing down around us.
To the extent that there is a oil crisis, it is a crisis related to giving money to countries where a big chunk of the population has its turbans wound too tight.
Actually, all democracies are incapable of dealing with long-term problems or that require concentrated public action. That's why environmentalists, and others with big plans that they can't sell to the public, require dictatorships to accomplish their ends.
There are such things as market failures, I am convinced. But there is a very high standard of proof required before I will accept that any particular situation is market failure. Most often, previous interference in the free market has encouraged the failure. Would Americans be so darned enthusiastic about driving if the government hadn't spend a truly astonishing amount of money building excellent roads across the nation? Probably not.
The theory of the free market does not say that the optimal outcome will occur. It says that those entities who choose suboptimal choices will be punished, and their market share taken by those who choose optimal ones. Poorly performing businesses lose business and are eliminated by better-performing ones. People who make bad life choices become poor, and the earth is inherited by those who made better ones. Nations who introduce stupid policies become poor, and their money goes to those who introduced better ones.
Nowhere in there is the assumption that those better choices will be the best possible, or even very good. Americans, by demanding and buying low-efficiency cars, may be making bad choices--the market theory does not predict that we will make good choices, but that if we make bad ones we will suffer.
The unstated assumption is that people learn from their and others' mistakes, so our suffering for making bad choices will lead to more people making better choices in the future. Our relying on the market, wherever it leads us, will make whoever is around in the future better off. But it will not necessarily make us better off.
Rosetta,
Read seadrive's comment just above yours. Efficiency is gallons per mile, not miles per gallon. Going from 27.5 mpg to 39 mpg is in fact a 30% reduction in gallons per mile.
I think the whole exercise is a Jeopardy-style answer with the question being, "What is the best way to destroy what is left of the American automobile industry." It will be interesting to see if friction develops between the Obama administration and the UAW on this point. At some point, the UAW needs to figure out that the Left is not its friend. If it doesn't figure that out, it will go the way of all things that cannot adapt to a changing environment.
Why? Why not simply let people buy what they want? It's called freedom. Try it sometime.
The problem with SUVs is that the cars people really wanted; big, boaty, muscular, sedans and family bus station wagons were driven out by faulty standards setting (is that redundant?) We'd certainly be better off with a fleet of modern Ford Country Squires, than today's fleet of Expeditions and other phony 4WDs that never get off the hard road. They would be safer, more economical, and more comfortable. But the weenies buggered the system, and the people bought the closest thing they could get to what they wanted.
I don't disagree that there are market failures, but I was referring to preferences rather than systemic inefficiencies (e.g.; tragedy of the commons). That said, your point is taken that there are some things so important that people shouldn't get to vote on them via the market, but they are basic fundamental liberties rather than mere allocations of consumer goods.
This doesn't have anything to do with cars, but it does explain why Cheney is running his mouth off on the talk shows. He's reacting to his loss of temporary social dominance.
Take a look at the map of Japan and the map of the US.
Notice anything?
Where do nearly all Japanese live?
How many children does a Japanese family usually have?
Comparing US and Japanese car usage is like comparing NYC and rural Texas car usage.
I'm sorry, you again seem to have failed to comprehend what I wrote. Do people really have that much trouble with understanding conditional arguments or arguing in the hypothetical? I'll try to be clearer.
The price elasticity of demand is the way to economically distinguish between a need and a want (or luxury). A tax is one of the ways to reveal this preference. All other methods are doing so are difficult and inefficient, requiring even greater violations of civil liberties as well as encouraging lying.
CAFE was not going to work because the designers recognized that some people had a need for large vehicles, but then grew upset when CAFE could not stop other people who merely had a want for them also purchased them. The SUV "loophole" was designed to address a real problem, just using the bad mechanism of CAFE. No matter how you structure a program like CAFE, there will be similar loopholes. Everyone has ideas about why their usage is required, or at least more virtuous, and wants to push the cost onto others. People with jobs that need large vehicles have an excuse. People with large families have an excuse. People with sport compacts have an excuse, at least getting better mileage than a large car. People with exotic cars make the excuse that their cars are such a small part of the problem that eliminating them wouldn't matter. Even environmentalists with small cars want to get out of paying a tax, since they're "already buying as efficient a car as possible."
All I said was that if you want an efficient policy that distinguishes between need and luxury, a tax is the natural way to do it. For a given result, it minimizes (though it does not eliminate) the inefficiency, deadweight loss, and loss of freedom.
But we get the program that we deserve, and that people want. The politicians, Obama included, a breathtakingly cynical and hypocritical, but they could not be otherwise and be elected.
Well, that's great and all. But the market is a tool whose only utility is to reveal preferences and serve them.
Having the state demand that X happen with regard to What Be Purchased in the broad sense is not "using the market", it's overriding it.
It may be perfectly liberal (in the old sense) and correct to override the market because of some unpriced externalities or other reasons - but it's not merely "using the market".
(I concur with DennisN and Clayton Cramer and the others that CAFE is the problem rather than the solution.
If there actually is demand for high-economy cars, the State need not mandate them; the last gas price hysteria proved that abundantly.
Thus we can conclude that CAFE is not needed to "correct" a problem such that there is un-met demand for high-economy cars.
If the goal is to actually price some external cost (eg pollution or even the current CO2 hysteria), a fuel tax would do that much more effectively and with far fewer "unforseen" side effects.
Worried that it hurts the poor disproportionately? Well, so does CAFE, by raising prices of cars ... and if one is really, really worried about that, one can cut them checks. It'd still be more efficient than CAFE.)
My point is that Honda and Toyota have done quite well producing lineups made up of two (and now three) vehicles, and have succeeded because they have stuck to rigorous schedules for updating those products--and with each iteration, they tend to get better. Ford hasn't done that.
The 1996 Taurus had too much content, too high a price, and styling that, to put it kindly, did not live up to the precedent set by the original. That product lingered for ten years without a major overhaul; the cosmetic exterior and interior tweaks in 2000 did little to address its profound shortcomings.
The Contour was too small for its intended market, but when it died there was nothing to take its place--the Taurus was so long-in-tooth that it was already a darling of the rental car fleet and few other places, and the Focus (despite being an exceptional car) was even smaller. If the Contour was too expensive to build, why wasn't it replaced with something better suited to the market?
My quibble is not with the decision to cut any of these products, specifically--it's with the overall strategy of not adopting a consistent approach focused on a few long-term nameplates with incremental improvement on a set, shortish life-cycle. That's the strategy that's worked for essentially every successful carmaker out there, and yet it is one that Ford (and GM and Chrysler) cannot seem to stick to. Hopefully, this will change--I'd love to see a stable lineup for at least a couple of product generations, with the Fiesta at the low end, the Taurus at the top, and the Focus and Fusion in the middle. Hell, I'd love to see Ford last long enough at this point for there to BE a couple of product generations...
Really, how do you know this? Have you actually read any of the IPCC reports? Even they are not certain of the "crisis", its effects, or what can be done about it. And what is the oil crisis? That, at about $2 a gallon (most places) it is substantially cheaper than beer?
and I also know that people making private decisions face numerous obstacles to making socailly productive choices, and yes, I think the government should lead with an eye towards our collective long-term well being.
What obstacles do people who want to buy fuel efficient cars face?
Letting their neighbors buy something else isn't an obstacle.
I knew there were advances in biofuels, but running a Jeep on Cocaine is a new one. I'll bet it was a fast mover.
Ford's problems, like GM's, have little to do with product offerings at root, and everything to do with the fact that they've become health care and benefit providers, who just happen to make cars as a sidelight.
I'm reading your thoughts, but believe me, everything you're suggesting gets kicked around at Ford, product-wise. They might make stupid decisions at times, but they don't ignore the data, with the exception of the data that told them 20-30 years ago that they were on an unsustainable path financially, due to demographics and industry competition, and their labor agreements.
They needed to get leaner, and argue the point with the UAW. GM tried 8-10 years ago, and took on the UAW up in Flint, and dropped billions in the resulting strike. Ford refused to do this, and in fact knuckled under and forced their suppliers to submit to the UAW's gangsta tactics at that Expedition seat supplier.
You'll have little cash available for product development, if it's all going to health care and benefits for current and retired employees, plus the insane work rules. But product was the least of their problems. I can make money selling junk, and I can go broke making the best ever. Profitably is the key, and return on capital investment. The Big 3's return has been horrible, and for decades.
OK, I agree with that part. But why is it worthwhile at all, to force that decision by taxes or other methods? Who has the right to influence whether I do something as a need or a want?
The CAFE designers had no right to be upset. They were trying to impose a tyrannical solution where no solution is needed.
Oh, I'll raise a glass to that. And it applies to all politicians, your politicians, my politicians, his politicians.
At the point when you deprive you neighbor of the quiet enjoyment of his property (say, by having a tire fire in your backyard burning constantly).
Property rights are meaningless if they don't come with the power to compel your neighbor to respect them. The rest is just debate on the details.
With that kind of competition, the US-based manufacturers also produce diesel powered vehicles sold in non-US markets that get considerably better mileage that comparable US market ones. Take the non-US market Ford Mondeo gets 44+ MPG with a 1.8L diesel, or the non-US market Ford Ranger with a 2.5L diesel gets 28+ MPG.
The new standards should be harmonized with the EU ones, so that car makers don't have to tweak their engines and emissions systems to meet each market. This would mean more choice for the consumer, and less expensive cars because manufacturers would not need to create different market builds.
First, be very careful of MPG quotes outside the US. They often use UK imperial gallons, which are larger, and thus have higher MPG. The 118d gets 50+ MPG in IMPERIAL gallons; it gets in the mid to high 40s in US gallons. (Still respectable, of course.)
Secondly, realize that the 118d is not exactly a performance car. No, I don't want a 0-60 in 9.0s BMW.
Comparing MPG to MPG is weird anyway for diesel vs. gasoline, since they're different fuels. Since diesel is a more dense fuel, I would assume it produces more CO2 per gallon. The true comparison would be CO2 per mile, no?
You can't compare MPG to MPG when comparing diesel to gasoline. One of diesel's advantages-- and the reason big trucks use it-- is that it has more energy per gallon. At the same time, that means that each gallon burned produces more energy, but also, naturally, more CO2. See reference.
It is true that diesel engines are more efficient and have higher MPG, but what we want to measure is CO2 per mile; MPG must be multiplied by the proper CO2 per volume adjustment.
The greenies in this country have fought this tooth and nail. The Europeans have had diesel for many decades, and lived with the accompanying emissions issues. We didn't do do that, and went with gasoline, and worked to clean up those emissions, but now we're behind on diesel implementation here.
It's apples and oranges, for a lot of reasons. The markets are not alike, and the governmental systems are not alike. Smart makers are figuring this out now, and at least attempting to commonize vehicle platforms, but that will take time as well. And common powertrains may be even further off.
I've wanted one of those foreign made small diesel Rangers for years now. Can't stumble across one anywhere.
I've already converted the Imp. Gal. based MPG figures to US gallon MPG figures in my previous post. If you look at ford.co.uk, you'll see that in imp. gallons, the Mondeo gets 50+ mpg.
As for performance, there are larger diesel engines that are more powerful, like the one in the US market BMW 335d, that gets 35mpg (combined), and yet go 0 to 62 mph in 6.0 seconds. The 335i, gets 25.6mpg. See the test drive here:
335d review
1.6 Ti-VCT Duratec petrol (110 PS/125 PS)
Available on: Edge, Zetec
CO2 emissions: 170 g/km (5-door and estate)
Annual vehicle excise duty: £175
Fuel efficiency (combined cycle): 39.2 mpg
1.8-litre TDCi Duratorq diesel (125 PS) – ECOnetic - 5-speed transmission
Available on: ECOnetic (5-door and Estate)
CO2 emissions: 139 g/km (5-door)/142 g/km (estate)
Annual vehicle excise duty: £120
Fuel efficiency (combined cycle): 53.3 mpg (5 door) / 52.3mpg (estate)
so which has less per km driven? The diesel.
Yes, there are more BTU's available per gallon in diesel than in gasoline, but that's not the reason big trucks use it. Large trucks are more interested in torque, and the greater compression ratios and longer stroke lengths of diesels result in greater torque than gasoline engines.
I certainly don't discount the role that the structural problems play in the current plight of the Big 3; I agree that this is the biggest problem that each of those companies face. I also agree (with what I think you are saying): that none of them were aggressive enough in dealing with the problem early enough. Of course, this country's labor laws play no small role in that problem.
That said, I don't think that product is irrelevant, and I don't think Ford's missteps on the product side can (or should) be cast aside so readily. In a way, blaming these systemic and perhaps insoluble problems for Ford's current predicament is a cop-out—there's nothing management could have done, so don't blame them.
Problem is, that's not the whole story, and it's certainly not the lesson that should be taken from the past 10 years. Ford may have faced structural disadvantages that made it difficult to invest in new product...but there were years where the company was making 10K per unit or whatever on Expeditions and Navigators. When Michigan Truck was running three shifts, the company was making plenty of money (and, IIRC, the margins actually climbed into the respectable category around then). Remember when one of the hot rumors was that GM and or Ford was going to buy BMW, but for the Quandt family's blocking interest?
Instead of investing this in product, Nasser et al. went on a spree, collecting "premium" brands like fancy jewels to stick on the company's crown. None of those companies made money, none did what the company wanted it to do, and each has either had to be unwound or is in the process of being unwound. Other acquisitions were similarly ill-thought out (what was that company in Britain? Qwick-Fit, or something?). Each of these subtracted valuable resources and time from the core business.
While you are right that you can get rich selling junk and go bankrupt selling honed works of art, in a consumer business the alpha and omega should ALWAYS be the product.
Thing is, they couldn't truly invest in new product without redoing both their labor agreements and their assembly plants. They need flexible production facilities, not the fixed iron they're currently stuck with. And if they invest in both new product and the new plants, they accept the labor agreement status quo, and they refused to do that.
In my opinion, they weren't going to invest in those new plants under the old labor agreements, so they've been careening toward this trainwreck for decades... by choice. They would not survive a drastic market downturn, much like the mortgage backed securities couldn't survive it.
And you're right, Ford took their 90's profits and invested them in other things. That Scottish guy sold them Qwik Fit, as you mention. Ford finally sold it back to him, for 10 cents on the dollar, and he proceeded to sell it AGAIN, for ANOTHER profit. He sold the same company twice and made money both times. I want to kiss that guy!
They dreamed on being an internet king, and formed up a group to do that. Bzzzzzzzzz.
They bought into a waste management effort. Bzzzzzzzz.
Jaguar. Bzzzzzzzz, and about $15B worth of Bzzzzz at that.
Land Rover. Astin Martin. Volvo (without the trucks, the fools). Bzzzzzzzzzz
Moved Lincoln product development to California to be closer to the in-crowd. Bzzzzzzzzzzzzzzz
And the peace day resistance, they decided to be a commodities speculator, and purchased a stock of palladium, a precious metal used in cat cons, rather than buying options. They lost $1B on that, when the Russians screwed the market. That's a 1 with 9 zeros after it. BIG Bzzzzzzz on that one.
Nasser did what the Ford family told him to do, so you can't blame him. But remember, GM is in the same boat, so the situation is not unique to Ford. Both have some good product, however uneven you think their lines are. But, they're losing money, and product ain't the reason that's so.
I am so reminded of that great exchange from Henry IV:
GLENDOWER: I can call spirits from the vasty deep!
HOTSPUR: Why, so can I, or so can any man; But will they come when you do call for them?
I find it amusing that the lawyers in DC think all they have to do is "call" for increased fuel efficiency and hey presto it will happen.
You know, I think while they're at it the new health-care "reform" Congress is setting up should set "standards" that insist on an average lifespan for US citizens of 250 years by 2015. Why should we put up with a mere 75-year lifespan? It's almost as perversely stupid as "allowing" our cars to get a mere 24 MPG, from a lack of political will, or the correct "long-term" post-modern post-rationality thinking, whatever.
Wake me up when Americans realize they cannot vote their preferred reality into existence.
There's plenty of blame to go around; the family gets a big chunk of it, too, as they do with the hapless Lions.
Ford and GM both have uneven lineups, but both of them are moving in the right direction. I'm excited about Ford's product line over the next few years; the '10 Taurus looks like a dead-bang winner, the Fiesta is a very nice product and an excellent competitor for the Fit, and the Fusion has been pretty solid, too. I think the next-gen Focus is going to be a great car, as well. Of course, time will tell if these cars can be built in the US/North America and sold at a price that actually makes money. Ford has tried world cars lots of times before, and found that they don't work all that well. And as you rightly point out, the elephant in the room is the labor contracts and health care--have the concessions made on these fronts gone far enough? We shall see, but as a long time Ford guy I really hope so.
From what I've seen, they haven't gone nearly far enough. This nonsense has cost me and others a ton of money these last few years, and I don't see that much pain being inflicted on the UAW. Their contract seems to be surviving intact in the Chrysler bailout, and I expect similar at Ford and GM. We really did need a straight bankruptcy or 2, to wake some of these people up, but that doesn't appear to be in the cards, so I suppose we'll sweep this all down the road 'til next time.
Yes, as I said, diesel generally does have less per km driven because of overall engine efficiency. However, merely because diesel has an overall advantage does not mean that you should quote inaccurate statistics that exaggerate that advantage.
Here you have used the correct statistics, which show an advantage for diesel, but not as much of an advantage as quoting the inaccurate-for-CO2-purposes MPG would.
By the way I own a Saturn which has been giving me 38 highway since 1996 and was tough enough to survive the head on with the Fedex truck and module enough to be completely fixed. Size doesn't mean safety, unless your the one in the Hummer hitting people.
As for the cost issue, since my car is now 13 years old I have been shopping. A Saturn Hybrid Aura gets similar mileage to my SC2 without the handicap of manual transmission. But the price increase over the basic (non-hybrid) Aura is $3,700 dollars. And the only improvement in mileage is in city (basic 22, hybrid 33), not highway (33 and 34). The same cost increase can be said for any Camry or other car sold in both regular and hybrid mode.
Cost reduction in fuel for buying hybrid over regular at $2.50 per gallon: City $4,010; highway zero. Total savings therefore is $310 dollars (city only driving for 100,000 miles). If the gas price goes up to say $4.50 the savings for city driving only would be $3,520 (which is what they put on the sale sign for the hybrid). If gas however goes down to $2.00 the hybrid will cost you $500.00 dollars more. Everything rests on a static gas price which in itself is controlled by supply and demand.
for a while during the last adminstration the webste for the National Institutes of Health touted plans to cure cancer by 2015.
So is 18% advantage in CO2 emissions, and 26% advantage in MPG, that different? 8% points? I think we'd have to agree to disagree here.
Fortunately for the US, at least for now, CO2 doesn't matter, and most US car buyers look at the price, options, and MPG.
My point still stands, because of the idiotic CARB bureaucracy of California, we DON'T have these wonderful diesels to choose from. Here, Obama had a chance to rework things going forward so we do, but he chose not to. Had he chosen a path that will harmonize the US's standards with the updated Euro VI standards due in 2014, things will be much better for US manufacturers, allowing their products to be sold in more markets with little to none "localization", and we get more Euro market cars to choose from.
Seconded.
First off, I considered the Focus, Cobalt, and Caliber, but each vehicle suffered in comparison to the Kia.
1. I *almost* bought a Focus but the Focus's well known propensity to develop NVH issues (the Euro Focus doesn't have this problem) as the car ages and one other issue steered me away.
2. The Caliber suffers from mediocre reviews, the same issue the Focus and Cobalt did, and a higher price.
3. The Cobalt fit the bill in every way but price and the one issue all three US makers have, namely the anemic warranty.
All of the US carmakers only offer a 3/36 warranty.
On a used car that I have to go into hock for 5 years to buy, over 3 years of paying on it without a warranty is unacceptable.
The Kia has a 5/60K warranty standard.
That and the lower price (by almost $2k) convinced me to buy the Kia.
If I have good luck with the Spectra, I'll probably look into buying a brand new Optima after the Spectra is paid off.
My point is that the Big 2.5 have to work to convince me and other low end 'econocar' buyers that their products will actually stand up under normal use my own experiences and the frequent slams against the Focus and Cavalier on the intertubes haven't convinced me they can.
My first car was a low mile (35k) 1978 Chevy Monza 151 'Iron Duke' that I was given by my mother back in 1985.
I spent over a grand in 1985 dollars on repairs during the year and a half I kept it.
Subsequent US made used cars have had the same frequency of repair, so when I found myself in a position to replace my old car with something actually made this century I wanted a long warranty.
None of them offer a respectable warranty.
Kia does, so a Kia I bought.
If the Cobalt had come with a 5/60 or 5/100 bumper to bumper warranty I would have bought it.
As it is, GM's 5/100k powertrain only warranty doesn't cut it.
Toyota builds trucks in Fremont, California and ships all over the world. Daimler (Benz) builds SUV's in Alabama and ships all over the world. BMW builds SUV's in South Carolina and ships all over the world.
Contary to your unsupported assertion American, Japanese, and European all have a common central aspect to their strategic planning. That is, build what the consumer wants to buy in each market.
More small cars are purchased in Japan because that is what buyers want. More big cars are sold in the US and Canada because thats what buyers want. Building what consumers want to buy is not idiotic.
That didn't factor into my decision but I did think it was interesting.
See? It's hard to get different regions and cultures to come together... on almost anything. They've inevitably evolved diversely.
The Euros evolved to a reliance on diesel, post war. Why? Because they imported ME crude, usually a dirtier animal, and suitable for distillates like jet fuel, home heating oil... and diesel fuel. THe North Sea didn't come on line 'til the 70's or even 80's, remember. So the Euros lived with the dirty air and particulates that came with diesel.
The US had available that legendary light sweet West Texas crude, easily refined to gasoline, and suitable for reformulation, as emissions regs came into play. So our pass vehicle fleet platformed on gasoline engines, quite naturally.
Along with divergent powertrain tradition, comes customer profile differences, and cultural traditions.
Merging these 2 traditions will not come by fiat, much engineering and sweat is required. And there will be winners and losers, and that has to be fought out in politics and in the marketplace, same as always (your preferred NA case study might be the switchover from carburetor technology to fuel injection, and how the industry handled that).
In NA, we've taken the necessary first step, and cleaned up the diesel fuel, and added particulate regs, so we can now expect the next generation to bring on some diesels.
That is not too much to ask of the current ruling party in Congress and of the President, is it?
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