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Big 3 CEOs Fight Fuel Standards

Posted June 07, 2007 8:27 PM

From detnews.com - Autos Insider:

The CEOs of Detroit's three automakers strongly lobbied against a proposal to significantly increase fuel economy standards Wednesday, warning congressional leaders that it could cost their companies tens of billions of dollars and cripple the struggling domestic industry. After more than five hours of closed-doors meetings with House and Senate leaders, General Motors Corp. Chairman and CEO Rick Wagoner and Ford Motor Co. President and CEO Alan Mulally said they were in favor of "reasonable" increases in fuel economy mandates, but they pointedly declined to endorse any specific measure.

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Guru
Engineering Fields - Manufacturing Engineering - United Kingdom - Member - Get things done!

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#1

Re: Big 3 CEOs Fight Fuel Standards

06/08/2007 3:47 AM

This I don't understand. Engine's have been getting more efficient for ever! These companies are monsters, have they not spent anything on R & D? What happens if there is another petrol price hike in the States? We pay about $10 a gallon in the UK, will the US consumer pay that much to run a big gas guzzler? Sorry, I don't get it.

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#2
In reply to #1

Re: Big 3 CEOs Fight Fuel Standards

06/09/2007 4:03 AM

Popular opinion in the US has it that a weightier vehicle ensures greater passenger safety. Thus heavier vehicles. I agree with you on their R & D, although there were some interesting conclusions drawn on the environmental impact of hybrid cars. In a recent newspaper article (not sure of its validity) said that a Jeep Wrangler had an environmental cost of GBP 5000 and a Toyota Prius GBP 22,000. The Wrangler was 88% (?) re-cycled...

Now for the weird and personal bit. Until 2 years ago I had been working in Texas for the previous 8 years. During that time I drove a Chevrolet Avalanche. 5.3litre. V8. SUV. Very well thought out vehicle. On returning to Europe - having sold my company in Texas to an oil major - I kept my Avalanche and it is now in the UK. I have a family with 3 kids...

Now for the financial logic component. Cost of the vehicle of choice, a Toyota Amazon (second hand) in the UK was GBP 36k. Cost of brand new Avalanche GPB 16k. Transatlantic transport and getting roadworthy in the UK GBP 2k. Therefore money available to spend on fuel before getting to the price of purchasing a Land Cruiser GBP 18k.

Avalanche MPG = 14.9 (digital readout) but that is U.S. gallons. A UK gallon is 1.22 US gallons. Real mileage = 18.1 MPG. Assume 1GBP per litre. = GBP 4.55/UK gallon. I can buy 3,956 gallons of fuel and drive for 72,600 miles before my financial outlay is the equivalent of the price I would have paid for the Landcruiser. Of course this does not take into account the price of driving the Amazon which would also have a fuel bill. If I include fuel for the Amazon I estimate that I would be able to drive over 130,000 miles before my fuel and capital expenses would equal that of buying the Amazon.

The Avalanche is used for long haul driving - where I don't want to listen to the kids elbowing each other and griping - and for serious haulage of heavy things. So far I have done less than 5,000 miles which means that at current usage rate breakeven is in the year 2036 !

You will no doubt observe that I have omitted the environmental impact component of the argument. I'll have a bash at that now. I don't doubt that the world's climate is changing, but I do doubt that we are wholly responsible for it. Inflated sense of our own importance and our primacy leads us to the conclusion - which is not adequately supported - that WE are controlling the planet and forces thereon. Speaking as someone who drills holes in the earth's crust for a living: nothing can be further from the truth. And shifting the magnitude and burden of industrial CO2 generation from the Western world to India and China has not solved the problem: it has served only to make us less economically efficient and generate more CO2. I base this on visits made to Beijing where their attitude to not being able to see more than a couple of miles because of smog can be typified as "What smog?".

I'll get off my soapbox now and go and turn large pieces of wood into smaller ones.

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#3
In reply to #2

Re: Big 3 CEOs Fight Fuel Standards

06/09/2007 10:10 AM

I agree with you completely about choice and qualifying our transportation choices -we all tend to be a little selfish in telling the other fellow what changes he should make in his lifestyle without upsetting our own choices!

It is like the Chinese and Indians telling us how bad we are for not jumping on the Kyoto protocol when they are the major polluters and they would be the ones gaining a economic advantage.

Who is Al gore working for? I remember Clinton gave the Chinese everything they wanted and now has a much larger net worth all from public service!

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#4
In reply to #3

Re: Big 3 CEOs Fight Fuel Standards

06/09/2007 11:27 AM

Steady, Dr. Tom !

We're engineers, discussing politicians. We have to beware that we could be corrupted.

Engineers deal with what is. Politicians deal with what might be.

Engineers are called to account for their statements. Politicians are called to account for their statements - by other politicians.

Engineers deal with the measurable (or closest available measurement). Politicians deal entirely with intangibles.

If an engineer's plan is wrong his / her development and his company will fail. Ultimately by extrapolation if more than 50.1% of developments are sub-standard with respect to international competition, that country's economy will fail.

If a politician's plan fails they get appear to get public applause. Witness Emperor Blair's retirement bash this last week. Now that was the ultimate in hubris. Over the last decade UK education, law enforcement and healthcare have suffered from overspending with no visible improvement. So, politically a lynch mob would be probably more appropriate than a fairwell world tour. However, the UK taxpayer was left with a bill of over GBP 850,000 for airfares, transportation and security costs. And we haven't even looked at the carbon footprint of that little odyssey.

For the true cause of Global Warming, I believe that we need look no further than politicians themselves: to paraphrase Winston Churchill (who was truly by all accounts A Great Man) "Never has so much hot air been spoken by so few about so much."

The prosecution rests its case.

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#5
In reply to #2

Re: Big 3 CEOs Fight Fuel Standards

06/11/2007 4:58 AM

Interesting about the environmental cost of manufacturing the cars! And I couldn't agree more that you should have the car of your choice, as someone who has owned a 5L mustang. If you live in the UK it can't have escaped your notice that a large proportion of people have gone to smaller vehicles, the manufacturers must be mad not to target this market in the US. As to the perceived passenger safety, I can't find an NCAP rating for a Wrangler, but a Cherokee has a 3 star passenger safety rating (the same as a Ford Ka), a Prius (yuk) has a 5 star passenger rating. So much for popular opinion.

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#6
In reply to #5

Re: Big 3 CEOs Fight Fuel Standards

06/11/2007 5:16 AM

I don't actually now live in the UK. But I visit frequently. Every time I return I see more congestion. Every time I read a British newspaper I hear more about additional taxes on road-users ( as if annual road tax and a 60% tax on buying gasoline was not enough ! ) Possibly, as a nation, we are now supposed to stay at home. Is that the message that the gubment is sending out ?

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#7
In reply to #6

Re: Big 3 CEOs Fight Fuel Standards

06/11/2007 7:42 AM

All the gov.com want us to do is sit at home all day and watch digital TV. Same as the police, really.

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#8
In reply to #7

Re: Big 3 CEOs Fight Fuel Standards

06/11/2007 8:59 AM

I have to agree that no matter what the guverment comes up with people will, ultimately, vote their wallet. This is the same hubris as the idea to ban incandescent bulbs and force the switch to flourescent. Nice idea for energy savings, but where do you put the mercury from the dead flourescent bulbs?

I guess it all comes down to whose ox is being gored. Or is that Gored?

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#9

Re: Big 3 CEOs Fight Fuel Standards

06/14/2007 12:12 PM

For over a decade I drove an '80's Datsun 510 hatchback. Got over 35 mpg (US) all the time, and sometimes as high as 45. No problem with acceleration or anything else. Can't find anything with equal fuel efficiency in US market for last few years. I don't accept any of the arguments made by the US automaker CEO's regarding loss of market share and economy. They are just stuck in the dead end of: bigger/more powerful/fancier. It is like civility and being kind to others is being replaced with physical symbols for masculinity, power, control, stature, "me first", etc.

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#10
In reply to #9

Re: Big 3 CEOs Fight Fuel Standards

06/14/2007 1:40 PM

I too had a Datsun for a few months when I was in Aberdeen. Loaned to me by a friend, it was brilliant. Low mileage. Started first time, even in the dead of a Scottish winter.

I believe that Datsun re-branded themselves Nissan. Allegedly the best selling truck in Texas is now the Nissan Titan. 5.3litre engine. Seems that even the Japanese manufacturers are selling what people want to buy. The question is: why do people want to buy a behemoth ?

Perception has it that bigger/fancier (south of the Mason Dixon line at least) = Mercedes, Audi, BMW, Jaguar which are mostly smaller capacity cars... expressed another way, if you say that you have a pickup truck nobody expects it to be fancy. [For every rule there is an exception: Cadillac Escalade.]

I too am perplexed. I have one because I have driven one for over a quarter of a million miles in all environments and I find it comfortable. Other people ??? Dunno. Is it truly as facile as a "size thing"?

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#11
In reply to #10

Re: Big 3 CEOs Fight Fuel Standards

06/14/2007 2:03 PM

Yes, Zigzag, I really think it is. Marketing has such a significant basis in psychology. In this country (the USA), I think many feel inadequate or "little", while others want to be seen as "big" or "powerful" or "capable of handling anything" . . . Witness what is emphasized in the pickup truck ads, or new car ads in general. Mazda uses "zoom, zoom" spoken in a little child's voice, as if we all have a child within us who wants to escape and be seen, running away free and unfettered.

I saw some of that in myself 37 years ago when I bought my first car--looked for models which were reasonably inexpensive to buy and own, but got hooked on the novelty and quickness of the (then new) Mazda RX-2. Other dealers, when they heard of my preference, tried to sell me up to their more sporty or muscular small cars, but I was hooked!

I believe that the "big 3" can market fuel efficient cars and trucks effectively, but it will take more than "an act of congress" to make them like it.

--JMM

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#12
In reply to #11

Re: Big 3 CEOs Fight Fuel Standards

06/14/2007 2:26 PM

JMM - unfortunately you may be right !

I can do this with quotes from films ( and please no psychology based on the film choices.)

On buying the right car: "Sometimes I do what I want, other times I do what I must" [Gladiator]

On psychology and advertising : "No, a person is smart; people are dumb panicky animals." [Men-In-Black]

How to effect the change: Possibly an act of congress offering a massive tax rebate in return for reducing the nation's fuel bill. The US is a net importer of oil and gas, so the upside is that the nation's balance of payments looks healthier if one imports less energy. ( How about no tax if you don't own a car with an engine larger than 2.0 litres.) Sign me up. Oh, and a massive cash payout when you turn your 5 litre monster into the scrapyard... Will this work ?

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#13
In reply to #12

Re: Big 3 CEOs Fight Fuel Standards

06/14/2007 3:23 PM

Perhaps a gasoline tax more in line with the amount "across the pond", perhaps with a flat credit per taxpayer each year. Use it to help improve public transit? The place we are in now is untenable and unstable, but it has taken us many decades to get here. Probably we will need decades to change the effects of so many decisions that have been built into our infrastructure and our "way of life".

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#14
In reply to #13

Re: Big 3 CEOs Fight Fuel Standards

06/14/2007 11:44 PM

Ah, no. sorry. I am an across the pond-er and it hasn't worked. Ministers in the government still drive big saloon cars. I still have a large truckk - yes, even over in the UK - although for long-haul only.

How about this: try looking up the City of Lyon in France and a public transportation system called Velo'v. I know it won't work everywhere, but this is a really cool idea.

In short: bicycles are provided free of charge for the first half-hour. There is a bicycle station every 300 meters. In a city of 1.6million inhabitants they have 4000 bicycles. The bicycles did 22,000 journeys a day for a total of 6,400,000kilometers in the last year. The majority of journeys are thus less than a kilometer and freee-of charge. If you are traveling further/longer, then you take the Metro.

Now for the economics. The people of Lyon pay only 50 cents for a hire up to an hour. Nothing for half an hour. The cost of the bicycles is borne by an advertising company called JC Decaux. What do they get in return ? They get free advertising space on bus-shelters and billboards belonging to the City of Lyon. In turn they sell advertising space to their clients....

What is brilliant about this is the constructive thinking about how it should work and who should pay. Now why can't our government (UK) get its act together? it's not a panacea, but a start.

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#15
In reply to #14

Re: Big 3 CEOs Fight Fuel Standards

06/15/2007 8:45 AM

I may seem like it hasn't worked, and (obviously) the geographic environment in England is very different compared to the USA, yet---I wonder if maybe it has worked at least in part? Perhaps, the public transportation systems are a little better than the typical ones in the USA. Perhaps, the per capita petrol (er--gasoline) consumption is lower.

I appreciated the suggestion to look at Lyon--I will do so. Years ago I was a student at University of California Davis. That community has been way ahead of many others in energy conservation, solar, etc. I recall that after I left, some entrepeneurs started buying older or surplus bicycles, painting them a bold yellow, and (with the cooperation and approval of city government) placing them all over the city. There were no locks, no meters, no limits on use---just the honor system and some social pressure. The unique color identified them as community-owned "public" transportation. I know this practice continued for many years, and is perhaps continuing now. It helped that the local topography was mostly flat and the local university campus was already dedicated to bicycles as the primary form of transportation for faculty and students alike (how about 25,000). It may be, that the Lyon approach will be workable in many cities in the USA, if local leaders (local or "home" rule is very popular here) are willing to try it.

Keep bucking trends and be an "agitprop" (agitator/proponet) for responsible use of our resources. --JMM

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#16
In reply to #15

Re: Big 3 CEOs Fight Fuel Standards

06/15/2007 8:58 AM

'the geographic environment in England is very different compared to the USA'

This is true, but public transport is low quality and overpriced, the roads are packed, people are generally in love with cars as much as Americans. We do demand a high standard of finish as well, and my main complaint of US cars is that the interior is early 80's plastic, and the general build quality. The big, usually badly designed engines are an extra insult.

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#17
In reply to #16

Re: Big 3 CEOs Fight Fuel Standards

06/15/2007 10:00 AM

Your points are well-said. Fit & finish, good (even elegant) engineering, and interior design are aspects to what makes a car marketable. Design objectives and priorities are separate from these, because they influence the choices or constraints within which these marketing aspects are then applied. Fuel efficiency, recycle-ability, ease of maintenance, and similar objectives and priorities can be selected and prioritized. Then the engineers and design teams can work on the fit & finish, engineering, interior layout and design, and similar things. It just seems that the typical car in the USA has been based on unwise and environmentally unsound priorities.

"public transport is low quality and overpriced, the roads are packed"

Pricing is greatly affected by volume sold, whether in products or services. Packed roads are the norm here near any urban area (I know a few that are packed for as many as 20 hours per day). I suspect the "love of cars" has to do with their recognizable benefits of making travel easier and faster, of encouraging "mobility", etc. My mother spoke of summer vacations in the late 1920's, with trips from Garden Grove to Bishop (Calif.) of about 300 miles one-way, including crossing the Mojave desert on "plank" roads (squared logs chained together side-by-side and resting on the sand, to make a drivable surface, with wider passing zones every half mile to allow oncoming traffic to pass). She didn't speak of these trips as being particularly unusual, but perhaps a teenager's perception and range of experinces is not a good judge of what is unusual.

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#18
In reply to #17

Re: Big 3 CEOs Fight Fuel Standards

06/15/2007 10:25 AM

good (even elegant) engineering

Ah, "elegant" engineering - a rare beast indeed.

How about this for a proposition: elegant engineering only seems to occur when the design envelope is constrained ( i.e. we have to succeed in cramming a pint into a half pint pot and we have done it using an elegant design) or where the engineering objective verges on the impossible (i.e. we need a seal which will survive 5,000PSI and also be able to rotate at 300RPM)...

If one can accept the prior proposition as (at least partially) accurate, then, the reason Detroit motor manufacturers don't generally come up with "elegant" engineering is that the operating envelope is so large that they can bolt any old thing onto the vehicle without much thought for fit or tolerance (or for that matter material specification.)

What do you think ?

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#19
In reply to #18

Re: Big 3 CEOs Fight Fuel Standards

06/15/2007 11:39 AM

How about YES . . . with a footnote.

Note: "Lowest cost of materials and installation, along with constraints imposed by the suppliers' distribution networks and the assembly line floor layout shall be considered primary, unless other approval is given to the design/engineering staff by management."

This is a hypothetical statement, but is probably realistic.

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