GM CEO asks car dealerships to lobby state, local government against regulating tailpipe emissions
Say hello to the newest government lobbying group: car salesmen! The AP is reporting that GM CEO Rick Wagoner asked car dealerships to lobby their state and local governments to not regulate tailpipe emissions. Here is exactly what Rick said in a speech at the National Automobile Dealers Association (NADA) meeting in San Francisco attended by about 10,000 dealers and their spouses:
We're not going to be able to accomplish everything that we otherwise could. ... We need to work together to educate policymakers at the state and local levels on the importance of tough but national standards. ... Dealers are very effective in the political process because we don't have a plant in every state. ... We have dealers in every state.
Last year, Congress passed a new CAFE standard but California was denied a waiver to regulate tailpipe emissions in its state. California and other states are still fighting to get the waiver to regulate tailpipe emissions and if that happens, Rick says automakers will have to focus on meeting state regulations and won't be able to focus as much on alternative fuel vehicles.
Seems this is not the first time car dealerships might impact policy making. After the speech, Rick said car dealers were a valuable help in the CAFE debate in Congress last year. What's he talking about? Last year, in the middle of the debate on CAFE, NADA launched a website listing the number of light trucks sold sorted by political districts.
Car salesman/government lobbyist? I guess it's not really a stretch ... especially for used car salesmen.
Related:
[Source: Associated Press]
Reader Comments (Page 1 of 1)
Jason 7:08PM (2/10/2008)
I think the point that is trying to be made is is that economically, uniform regulations are something that is important to auto makers. If you have one state with different requirements, you may need substatially alter the configuration of that car to meet those requirements.
However, the motorbike industry for years has been faced with this problem. Their approach is not now simply make bikes for a combination of the toughest standards that are put in. So, all bikes sold in the Australian market comply with Ero-3 emissions standards, even though we do not require that locally.
What the car companies want is to be able to use the least stringent of possible requirements and get away with it. Considering that federal regulations appear to be more lax and Arnie's regulations - GM, of course, want the cheaper option. After all the cheaper option keeps their cars cost compeditive without too much pain for GM.
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jj 12:27PM (2/11/2008)
You only have to cater towards the most stringent one. Point and done. Automakers are whining about it because they want to sell the same low mpg gas cars without having to do anything new.
No one can tell me they can't do it when they already sell high mpg cars in other parts of the world. And it is natural for california to lobby because the air quality is so bad. So why should cali have the same standards as Rhode Island when there is a health disease problem with all the smog in cali?
When u have more money than you can swim in and it isn't enough that's when you know you've got a crisis. That's what automakers and oil like Exxon like to do. Do the least innovation and change to get as much money as possible. And we hail ourselves as the best in the world by making lower standards than other countries. How embarassing.
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Wildgoosechase 9:13PM (2/10/2008)
National standards are vital to the survival for the US auto industry. The only way to meet California's proposed requirements is to make tiny cars like the Aveo or very expensive hybrids like the Volt. That would mean that the ONLY cars available in California is the Aveo and the Volt. Both are compact cars, good luck getting three kids in the back seat without killing each other. The Volt will sell for $40,000, who can afford that. Cars like the Aveo will dominate the market while these are imported, domestic auto production will be limited to the highest margin luxury cars. Remember 1 in 8 jobs in this country is auto related, Michigan will be a ghost town.
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meme 10:36PM (2/10/2008)
From the oil industry's perspective, it's the exact same thing with fuel blends. Different states and even cities sometimes put custom requirements on fuels. However, big companies, like oil refiners and auto makers, live and die on working in volume. Not only making but also delivering low-volume blends of fuels costs a lot of extra money. They usually try to only pass along this extra expense to those who required the special mix, but it can affect the overall price of fuel as well.
Oil refiners, like car makers, much prefer national standards to state and local standards for this reason.
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Harvest 10:50PM (2/10/2008)
National standards and regulations are the only way to go. Having specific regulations in select states is akin to creating multiple car markets within the United States. If increased regulations are truly desired, then they should be enacted at the federal level.
I still say that California's proposed regulations, along with the CAFE standards are dumb in the sense that they only apply to new cars, have no affect on the millions of cars on the road today, and unfairly punish companies that produce gas guzzling cars for people who quite frankly want a gas guzzler. It's a (somewhat) open market in the US. If there is a demand for a product, companies should be allowed to fulfill that demand.
A tax on fuel would solve all of this. It would affect the demand for inefficient used cars and trucks as well as new ones and finally allow automakers to produce the fuel efficient vehicles with confidence, knowing that people will want to buy them.
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A.Brien 11:25PM (2/10/2008)
They should put a fuelcell electric generator
and a water hydrogen generator and accumulator onboard actuated and pluguable at home + 600 h.p
electric motors 4 wheels drive + regenerative and power braking + lit-ion battery light pack of 100lbs + light weight construction. The perfect hit
for year 2009.
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Spike 11:54PM (2/10/2008)
Time for a boycott of all new cars from Detroit that don't get 40 mpg or even better don't buy new until they bring out a plug-in in every model. Its time we got serious about the future of the planet and quit thinking we are entitled to drive bigger, faster cars. It would not really even be a sacrifice to cut horsepower back by 25 - 50% if it meant we would leave the world in better shape.
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Randy C. 1:37AM (2/11/2008)
This strategy isn't going to be to successful. Some states need tighter emissions standards than others. California with several major population centers will require fewer emissions than say South Dakota with fewer and smaller population centers.
I once ran some numbers to compute the Average Fuel Economy (AFE) for a mythical car company. I started with 1000 SUV at 12 MPG, 2000 midsize cars at 22 MPG and 2000 economy cars at 30 MPG were produced. I got an AFE of 23.2 MPG. When I substituted all of the SUV with hybrid models that got 24 MPG the AFE only went up to 25.6. Not much of a difference for the expense. But when I substituted 1000 of the economy cars with electric cars that get 120 miles per equivalent gallon I got 41.2 AFE. Nearly double just by making 1 electric car for every 12 MPG SUV.
My numbers may be a little off but the algorithm is sound. It showed a significant increase of the AFE when electric cars are included. In reality electric cars can go farther on the equivalent amount of energy in one gallon of gas. I'm talking what goes in the power port not the size of the battery pack.
The same is true for emissions. Less gas consumed per mile traveled equals less total tailpipe emissions. And when 20% of the cars are emitting nothing and running on USA made power we come out ahead all the way around.
I say to the car companies, "make your life easier, build electric cars now". The math shows how easy it is to meet both emissions and economy standards by producing electric cars. You can go with hydrogen later when and if you ever get the 5 myths (aka problems) worked out (see "Who Killed the Electric Car").
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Tim 10:15AM (2/11/2008)
GM leadership is bipolar.
Rick Wagoner needs help.
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ltclloyd 4:31PM (2/11/2008)
The diffrent state requirements have been holding back the car companies for years, in the old days you had to buy a "Californian" model of a sports car, which almost every enthusiast removed the restrictions making them dirtier then the standard version. diesels, which help balance the type of pollution created, and can burn biodiesel unmodified, are still rare items in the "clean air states" when they could actually do some good, and ethanol is all but banned in many of these states. I think adoption of current ethanol technologies will lead to the influx of celoustic and biomass ethanol we desire. but until the people accept the technology and it becomes profitable for the companies to fast-track this technology it will not be a true alternative.
mandatory E10 will help, in the old days when I used to work in an emissions controlled state we used to subistute a gallon of fuel in the tank which would help several cars pass their emissions tests.
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Wise Golden 1:37PM (2/11/2008)
The states and localities that are attempting to enact separate environmental regulations will make commerce very difficult. If the smaller state and local governments are allowed to do so, auto makers will have no choice but to make cars that meet the highest standard, or drop out of the effected market. This has the effect of forcing other states to live with the rules of a group of states and is usurping the authority of the Federal Government.
It would be more appropriate for these state and local governments to encourage the purchase of certain types of vehicles through positive taxation and incentives. And it would be fully appropriate for these smaller governments to discourage fuel use by taxing fuel at the pump.
But, it's easier for a cowardly politician to try to force a big company to do the hard work and let them explain the cost to the consumer, than to take the direct action of taxing fuel.
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stevejust 2:15PM (2/11/2008)
American car dealers are going out of business all over the place, because they can't compete against car manufacturers like Toyota and Honda who, back when Detroit was saying "Americans don't want more fuel efficient cars" were working on their hybrid technologies. Thus, Wildgoosechase, your analysis ignores that reality.
Dealers who can't see that their interests and Detroits aren't ultimately in line -- and they will by and large buy this crap and start lobbying -- are only going to make their plight worse in the end. It's not unlike the fed continuing to lower interest rates to prevent the crash of having had such low interest rates for so long. Eventually, someone's got to man up and do the right thing. In this case, the longer Detroit waits to start making cars I'll buy, the worse of they are.*
*With the notable exception of Fisker, who based on accounts here on ABG has been poking around Detroit lately.
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bigbenaugust 3:24PM (2/11/2008)
1. Whatever happened to states' rights?
2. Have the automakers forgotten the 70's and 80's, when they sold "49-state" cars, and then cars for California? As late as 1989, I know certain engine/drivetrain combos (for Fords, anyway) weren't available in CA. Such short memories those corporations have.
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GoodCheer 4:32PM (2/11/2008)
I would think the cars that will be more expensive are NOT the ones that are for sale in the CA-compliant states. The restricted sales and the higher prices will be for the ones in the remaining 49 (or actually 36 now right?) states that don't join the emissions reduction plan.
Wise Golden says this is "usurping the authority of the Federal Government". If that was the case, it would be the auto-makers that are doing the usurping, not any other state's government. This suggests it is the authority of the fed that provides us with all the products that we can purchase... I hardly think that makes sense.
With CA rules in effect in 14 states, I'm sure the market in the remaining 36 will be big enough to support the manufacture of the big trucks you love, just with somewhat diminished economies of scale, so slightly higher prices.
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Wildgoosechase 7:08PM (2/11/2008)
The point is that given the legacy costs that US automakers have, the margin on small fuel efficient is too small for them to survive as they are today. Soon we will have several Chinese and Indian autos hitting our shores with a huge cost advantage. It will take massive layoffs and to make the US automakers “right-sized” with the upcoming market conditions. It’s going to get ugly in the rust belt.
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Luke 3:56AM (2/12/2008)
I don't understand, why wouldn't a car company want the level of exhaust pollution regulated?
Surely the acceptable amount of pollution that pours out at knee-height in our towns and cities is something that should hardly be decided by a car company?!
A cynic might say that they just want to save money at the expense of our air quality, but surely no-one would be that callous.
Oh and Randy, loving the electric car support, but 24mpg for hybrids is pretty low isn't it? I thought Prius was around 50mpg? Then again they seem to think that a massive SUV with a meccano set electric motor qualifies as a hybrid, so maybe you're right...
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