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Automotive News & Views Has CAFE reached the end of its usefulness?
507 messages, Last post on Oct 27, 2009 at 11:49 AM
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Replying to: kdhspyder (Apr 07, 2009 5:32 pm) That is pure conjecture. The swing to smaller vehicles began in 1965. Imports were increasing in sales, and intermediates were displacing full-size cars even before the first fuel crunch in late 1973. Even compacts experienced revived sales in the early 1970s (after declining throughout most of the 1960s). People were seeking improved fuel economy even before the first fuel crunch. kdhspyder: If there was no CAFE we likely would still be driving the vehicles of the 70s getting 12+ mpg. However we benefit from CAFE by the fact that now the fleet which is probably three times as large as in 1970 is also twice as efficient. This is not supported by sales trends at that time. People were moving from larger cars to smaller ones even before the first fuel crunch. Note that the Vega, Pinto and Gremlin debuted during 1970, or three years BEFORE the Arab Oil Embargo hit in late 1973. Detroit felt the need to respond to increasing small car sales. The swing to smaller cars was well underway by the late 1960s (we'll ignore the quality of Detroit's responses). kdhspyder: Clearly the numbers support the continued success of CAFE, whether the D3 hate it or not. It's been good for the country. I've read the Congressional debate surrounding CAFE, which gives insight into the intent of the law. The goal was to REDUCE oil consumption and cut oil imports. Gasoline usage is at record levels, and oil imports have increased since the late 1970s (when CAFE went into effect). Clearly CAFE has failed in its original mission.
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Replying to: gagrice (Apr 07, 2009 5:47 pm) You cannot tell me that this has not been worthwhile. That's HUGE money staying here in this country every year. It may not stay in your pocket because of your choice of vehcles but when you consider 250 MM vehicles on the road as a nation we benefit enormously. Your two examples indicate the recalcitrance of the D3. But because of this refusal to adjust by embracing fuel economy they find themselves in the condition they're in. Karma.
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Replying to: grbeck (Apr 08, 2009 6:08 am) It's not conjecture. We ( all three of us ) have lived through these times. We know that the D3 have fought tooth and nail to find ways not to comply with CAFE or to stop it ( they succeeded for 15 yrs ) or to find loopholes through it. I understand the marketing reasons for this especially with low fuel prices in the 90s and the seeming endless supply of oil. But the national good was ignored as was their corporate health. Gagrice's two trucks are perfect examples of the D3's refusal to get with the program. This refusal to look into the future has killed two out of the three largest vehicle makers in the world. The swing to smaller vehicles began in 1965. Imports were increasing in sales, and intermediates were displacing full-size cars even before the first fuel crunch in late 1973. Even compacts experienced revived sales in the early 1970s (after declining throughout most of the 1960s). People were seeking improved fuel economy even before the first fuel crunch. Began. But there was no serious effort by the D3 to participate. When fuel dropped back to $1 a gallon all through the 90s the D3 abandoned all efforts to compete in the fuel efficient small cars in favor of the quick buck with SUVs and trucks ( Cavalier and Sunfire vs Civic and Corolla ). kdhspyder: If there was no CAFE we likely would still be driving the vehicles of the 70s getting 12+ mpg. However we benefit from CAFE by the fact that now the fleet which is probably three times as large as in 1970 is also twice as efficient. This is not supported by sales trends at that time. People were moving from larger cars to smaller ones even before the first fuel crunch. Note that the Vega, Pinto and Gremlin debuted during 1970, or three years BEFORE the Arab Oil Embargo hit in late 1973. Detroit felt the need to respond to increasing small car sales. The swing to smaller cars was well underway by the late 1960s (we'll ignore the quality of Detroit's responses). It's supported by history and actual data over the last 25 yrs. This is the job of major companies and governments, to look into the future and see what is likely for the company's health and survival and for society's welfare. In the late 70s and 80 and all through the last 15 yrs the D3 have ignored the signs and fought to return to the 70s. It has killed them in the end. If there were no CAFE throughout the last 25 yrs we'd still be driving the technology of the 70's ( Gagrice example again ) in all our vehicles not just trucks. kdhspyder: Clearly the numbers support the continued success of CAFE, whether the D3 hate it or not. It's been good for the country. I've read the Congressional debate surrounding CAFE, which gives insight into the intent of the law. The goal was to REDUCE oil consumption and cut oil imports. Gasoline usage is at record levels, and oil imports have increased since the late 1970s (when CAFE went into effect). Clearly CAFE has failed in its original mission. This was uncharted territory back in the 70's. Like now much of the rhetoric is political to catch the attention of the populace and the news; "Independence from Mideastern Oil Producers". But in a less emotional and cooler analysis the lawmakers had to face the real possibility that oil might run out at some time. No one except a few visionaries, considered harebrained alarmists, thought that Peak Oil was anything more than a theory. But DOT did commission the VMT study to which I referred in the other post in order to study driving patterns and thus fuel consumption from the late 70s to 2001. The EIA now publishes an annual report on usage and supplies. It's clear now that we are walking a dangerous line between doing as we please and potentially parking our vehicles for extended periods for lack of petro-fuel. The numbers I mentioned from the VMT study combined with the CAFE numbers clearly show how much money we've saved over the last 25 yrs. It's hundreds of $Billions. The reasoning for the new CAFE 35 in 2020 is not to 'Free Us from Middle Eastern Oil" as the headlines might have read in the 80s. The only way to do that is to stop using petro-fuel for vehicles. Electric power and bio diesel are the only ways to 'free us'. What CAFE 35 recognizes is that for the next 30 yrs or so we will still be using petro-fuel primarily to power our vehicles. But soon that fuel will be so scarce that we ( each of us or the various governments ) will have to ration out the supplies to each user. When that rationing occurs who will be the first to agree to park their vehicle for a week or a month or to retire it forever? Somebody will have to do without. Right now our population is 305 MM people. There are about 250 MM 'eligible' drivers and there are about 250 MM vehicles on the road right now. In 2030 we will have a populatin of about 400 MM people. At the same rate of 'eligibles' there be about 325 MM drivers at that time. Even if our individual VMT don't change from the current 15000 annually that still means that we will need 30% more fuel in 20 years then we use today. Or.... all the vehicles can be 35% more efficient across the board. This is a national security and public safety issue primarily; i.e. keeping us all driving, keeping the military fueled, protecting our economy and keeping us all from killing each other at the pump.
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Replying to: kdhspyder (Apr 08, 2009 6:58 am) The idea that we would all be driving around in 12 mpg vehicles without CAFE ignores trends that were underway before the first fuel crunch. Small cars were growing in popularity BEFORE 1973. People were seeking more economical cars before the first fuel crunch. You need only to look at the sales trends from the middle of the 1960s. Big cars were declining in market share. The growth was in small, imported sedans, ponycars (until they got too big and powerful by chasing the muscle car market - then sales collapsed, which further proves the point) and intermediates. Many people were demanding smaller cars before the first fuel crunch. A lot of them were already upset about the "economy" of the standard-size Detroit cars. kdhspyder: It's supported by history and actual data over the last 25 yrs. This is the job of major companies and governments, to look into the future and see what is likely for the company's health and survival and for society's welfare. In the late 70s and 80 and all through the last 15 yrs the D3 have ignored the signs and fought to return to the 70s. It has killed them in the end. If there were no CAFE throughout the last 25 yrs we'd still be driving the technology of the 70's ( Gagrice example again ) in all our vehicles not just trucks. This ignores the impact that the imports have had on the market since the 1970s. They were the main drivers of technological changes in the market, and their presence was completely independent of CAFE. kdhspyder: But the national good was ignored as was their corporate health. Gagrice's two trucks are perfect examples of the D3's refusal to get with the program. Many people who bought large cars simply switched to large trucks, because CAFE killed them. Are GM, Ford and Chrysler supposed to not make a type of vehicle just because some people think it uses too much gas? Both Toyota and Nissan entered those markets, too - also note that, as of last year, Toyota sold MORE trucks, SUVs and large vehicles (meaning Camry and above) than smaller cars (and that includes the Scions). kdhspyder: This refusal to look into the future has killed two out of the three largest vehicle makers in the world. What killed Chrysler was Daimler looting the company, and skimping on new models to the point that they were hopelessly uncompetitive (Sebring and Avenger). What killed GM were several factors: a refusal to get serious with the UAW about bringing labor costs (including work rules) into line with the transplant operations; a refusal to realize that the old Sloan "stairstep" model of branding was dead; and a refusal to realize that it was behind the competition in critical areas of interior quality and control of noise, vibration and harshness (what we call "refinement"). A Prius clone or a Cobalt that gets 40 mpg would be nice, but neither would have saved GM or Chrysler. Big pickups and SUVs kept GM alive to this point. Without them it probably would have gone under in the early 1990s (GM almost filed for bankruptcy in 1992-93). Making more fuel-efficient vehicles wouldn't have saved GM. Note that Toyota is offering incentives on the Prius, and the Fit is piling up on dealer lots, too (my local Honda dealer has at least six, along with three of the new Insights). Even if the Cobalt and Aveo were as good as the Civic and Fit, they wouldn't be enough to keep GM in business. CAFE can only ensure that the manufacturers make vehicles that obtain a certain mileage figure. It can't ensure that said vehicles will be attractive, refined, fun or desireable. A look at a 1976 Chevette or 1982 Cavalier - both built in response to CAFE - should be proof enough of that one... kdhspyder: The numbers I mentioned from the VMT study combined with the CAFE numbers clearly show how much money we've saved over the last 25 yrs. It's hundreds of $Billions. The rationale for CAFE keeps changing. Originally it was supposed to end the dependence on imported oil and reduce gasoline usage; when it didn't do that, the rationale was that without it we'd be using even more gasoline, because otherwise every new car would only get 12 mpg. That ignores trends that have been underway since the 1960s, so now CAFE is supposed to save us money. That would certainly be nice. Except, of course, that the technology needed to make vehicles that get 35 mpg and provide the same levels of comfort, refinement and safety may drive up the price of vehicles to the point that no net savings will be realized. So those savings are hardly guaranteed. kdhspyder: But in a less emotional and cooler analysis the lawmakers had to face the real possibility that oil might run out at some time. No one except a few visionaries, considered harebrained alarmists, thought that Peak Oil was anything more than a theory. Were they the same ones who said that we would be paying over $5 a gallon for unleaded by this time? I paid $1.99 a gallon last night... kdhspyder: But soon that fuel will be so scarce that we ( each of us or the various governments ) will have to ration out the supplies to each user. When that rationing occurs who will be the first to agree to park their vehicle for a week or a month or to retire it forever? Somebody will have to do without. Rationing has nothing to do with "shortages" and more to do with making sure the politically connected get what they want at the old price. If the price goes higher, people will have to adjust. If they can't afford, they will do without it, or drastically reduce their use of it. Last year provided the perfect example. Gas prices rose, and gasoline usage dropped, as did the number of miles driven...all without any change in CAFE. If gasoline does become scarce, it will become more expensive, which, in turn, will encourage pumping more difficult-to-access reserves, more use of alternative energy sources and more conservation measures (carpooling, trip consolidation, use of mass transit, etc.). As shown by the past year, CAFE is completely irrelevant to those trends.
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Replying to: grbeck (Apr 08, 2009 8:53 am) I don't have any trust in the 'goodness' of industry to do the right thing for society. Industry should not have improving society as it's first goal, profitability should be the first goal. As such the D3 were ( in the short term ) absolutely right to try to maximize profits and ignore CAFE as much as possible. That's capitalism. But for the long term health of the various companies and for the betterment of society industry 'should' be looking long term. Obviously they haven't. But luckily for us the government has a longer view. We will need at least 30-40% more fuel available to us by 2030. It's got to come from somewhere or a lot of us will have to do without. The petroleum industry says that the easy oil, the low-hanging fruit, is all but gone. While there's plenty left it's all in remote areas where it's going to cost a lot to bring it to the pump. Or we all can do without to some amount or other. Again who's going to volunteer to be the first to sit at home or to take mass transit? Your shortterm view on the price of fuel today is indicative of the very common 'forest and trees' syndrome. It's what got the D3 in the mess they're in presently. Absent the economic crash this year I viewed fuel prices as increasing by $.50 a gallon annually out into the future. I don't see anything except the current lack of business demand around the country that dissuades me from this long term outlook. At some time we will recover and we will start back to work with minimal unemployment and our appetite for fuel will take off again, with booster rockets. At that time $4 and $5 per gallon fuel prices will return. Then we will again be facing annual increases of $.50 a gallon as fuel gets tighter and tighter. So I ask again, 'Who will volunteer to be the first to park their vehicle, stay at home or take mass transit?' With a larger population, more drivers and more vehicles on the road we must have 30-40% more fuel for our needs....or we can drive vehicles that are 30-40% more efficient. Will industry do this on its own? Not until it sees demand and money to be made. With a 5+ yr design cycle and multiple products involved by the time industry sees the demand it will be too late for society. That's where government steps in. 1. Make the national fleet more efficient by 2030 to keep everyone driving 2. Mandate fuel rationing 3. Mandate against single person vehicles 4. Mandate against drivers of certain ages ( none >75 or <18 ) Allowing industry to 'react as demand dictates' is as bad as 'let the markets decide' in our financial crisis. When the crisis hits it's too late.
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Replying to: kdhspyder (Apr 08, 2009 11:20 am) I implied no such thing, and please note that the Vega, Pinto and Gremlin all debuted in 1970, BEFORE CAFE was enacted. The domestics were attacking the small car market before CAFE was enacted. (Whether they were good efforts is another matter, but there is no evidence that CAFE has resulted in the production of GOOD vehicles.) Even Ford had made the decision to downsize the original Mustang to create the Mustang II prior to the first fuel crunch. The market was moving to smaller vehicles before the Arab Oil Embargo. That doesn't mean that people were going to immediately abandon Cadillac Fleetwood Broughams and LTD Broughams, but it shows the direction the market was already heading. kdhsypder: The two examples of half-azzed efforts to bring smaller more fuel efficient vehicles to market, the Chevette and Cavalier, show this lack of involvement. You claimed that higher mileage vehicles would have forced the production of more attactive and economical vehicles, and thus prevented GM and Chrysler from reaching the point of bankruptcy. The Cavalier and Chevette prove that mileage standards cannot force a company to make attractive cars - only economical ones. That is not enough to prevent bankruptcy. kdhspyder: But for the long term health of the various companies and for the betterment of society industry 'should' be looking long term. Obviously they haven't. But luckily for us the government has a longer view. Except that GM and Chrysler are still basically bankrupt, which means that CAFE didn't do much good in preventing that one, and Toyota now can't sell Priuses without incentives, so merely making high-mileage cars is obviously not enough to boost sales. kdhsypder: We will need at least 30-40% more fuel available to us by 2030. It's got to come from somewhere or a lot of us will have to do without. The petroleum industry says that the easy oil, the low-hanging fruit, is all but gone. While there's plenty left it's all in remote areas where it's going to cost a lot to bring it to the pump. Which will initially be reflected in the price...and please note that there is no proof that all of our additional energy needs will be met with petroleum. kdhspyder: Your shortterm view on the price of fuel today is indicative of the very common 'forest and trees' syndrome. It's what got the D3 in the mess they're in presently. Absent the economic crash this year I viewed fuel prices as increasing by $.50 a gallon annually out into the future. I don't see anything except the current lack of business demand around the country that dissuades me from this long term outlook. The price of gasoline was declining before the current economic crash. It was based on a commodity bubble and the resulting speculation, not any true shortage in supply. kdhspyder: At some time we will recover and we will start back to work with minimal unemployment and our appetite for fuel will take off again, with booster rockets. At that time $4 and $5 per gallon fuel prices will return. Then we will again be facing annual increases of $.50 a gallon as fuel gets tighter and tighter. I recall similar predictions in 1975 and 1982...didn't work out that way. Gasoline was supposed to hit $3 a gallon by 1985 (in 1980s dollars). Although I don't doubt that gasoline will eventually hit $4 a gallon. Of course, if, in 1980, someone had told me that, in 2009, a brand-new Civic would cost $20,000, and a decent house would cost between $180-200,000 in the area where I live, I would have said, "No one will be able to afford one!" Because I made the common mistake of forgetting to account for increases in income and purchasing power.
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Replying to: grbeck (Apr 08, 2009 12:48 pm) The Cavalier and Chevette prove that mileage standards cannot force a company to make attractive cars - only economical ones. That is not enough to prevent bankruptcy. ./. Except that GM and Chrysler are still basically bankrupt, which means that CAFE didn't do much good in preventing that one, and Toyota now can't sell Priuses without incentives, so merely making high-mileage cars is obviously not enough to boost sales. Except that the D3 fought against complying with the CAFE standards of the 80s other than to field a minimally capable team. They made no serious effort frankly until the last two years. Instead of embracing the opportunity they fought it tooth and nail. Money was to be made in fuel efficient products; Camry, Accord, Civic, Corolla, Sonata, et. al. The D3 opted not to compete except marginally to keep a balance with their real money-makers the SUVs and trucks. My contention with them is that instead of keeping a balanced product portfolio that could have reacted quicker to the sudden switch of buyer preferences since 2003 the three of them were left in the dust gasping. Now that they have religion it's frankly too late for two of them. The CAFE standards were not a tool to force the manufacturers to make good fuel efficient vehicles. Whether they did or not was a managerial choice. What CAFE did do was to save us $Billions and keep us from using billions of gallons of fuel over the last 25 years. In that it served its purpose perfectly. If the D3 chose not to participate they did so at their own risk of ruin. Obviously. The price of gasoline varies every year in a very regular curve. Gas Buddy historical chart 5 yrs. Gas prices reach their annual peak just after 4th of July here and then decline through Christmas. Then they begin going up again after Jan 1st. 'Til these last 9 mo's it was only upward, upward, upward. This curve will resume when business recovers.
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Replying to: kdhspyder (Apr 08, 2009 6:19 am) Who paid the salaries of all those fat car civil servants? You cannot tell me that this has not been worthwhile I most certainly can. It has only cost US money. Higher prices for vehicles and another wasteful agency. You cannot show any statistical data that proves it was CAFE and not the consumers own desires to buy more fuel efficient vehicles. The CAFE average has not gone up since 1986 so who paid the wages of all those deadbeats in the agency? Fuel economy increased even when CAFE was relaxed. from 1986-1988 the fuel economy rose even as the price of fuel fell and the CAFE standard was relaxed due to pressure from US automakers I do NOT believe the outcome or the usage of fuel in this country would be any different without CAFE. We are just on opposite ends of the political spectrum. You believe in big government telling US every move. I believe in as little government as we can get by with. |
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Replying to: grbeck (Apr 08, 2009 12:48 pm) Don't forget Corvair. A wonderful little car once GM worked the bugs out. If not for that hack Nader it would have evolved into one of the best of the era. If Nader had treated Honda with the same lopsided misinformation attacks it would have never gotten off the ground as an auto maker. The early Hondas were pure CRAP. I know I bought one of the early Accords in 1977 from a Honda motorcycle dealer in Minnesota. We are in agreement. CAFE is purely a waste of tax payers dollars. |
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Replying to: gagrice (Apr 08, 2009 2:08 pm) In this case CAFE has more than paid for itself. Your two truck examples are the very reason why CAFE is needed. Without the stick we'd be relying on the D3 to give us their best efforts. Well they have shown over and over again that they won't give us their best efforts unless forced to do so ... and then they'll do it dragging their heels. You're pollyanna-ish if you think the D3 and the other would have given us 30 and 40 mpg vehicles of their own accord. In this I'm much more of a realist. Regardless of political leanings, and yes I am a card-carrying NY liberal, the math cannot be refuted.
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