U.S. automakers shouldn't let fuel break become...

[Variance]

Link: http://www.detnews.com/2005/insiders/0508/30/C01-297366.htm

U.S. automakers shouldn't let fuel break become crutch


By Christine Tierney / The Detroit News


At first glance, the new U.S. fuel-economy rules appear to be a lucky break for Detroit. Instead of pushing for major improvements in fuel consumption, the National Highway Traffic Safety Administration is proposing an 8.5 percent increase in the fuel-efficiency of light trucks over four years. Big guzzlers like General Motors Corp.'s Hummer H2 would be exempt, at least until 2011.

Transportation Secretary Norman Mineta says the proposal will save fuel without compromising safety -- as if fuel-efficiency could only be achieved by reducing vehicle weight.

Environmentalists are disappointed, but for GM and Ford, the modest requirements come as a relief. Both companies are losing money on their U.S. operations, and it's unclear whether new models can stem the decline in their market shares. GM is preparing to roll out redesigned large sport utility vehicles and pickups, and Ford is launching cars in segments where Japanese automakers have made themselves at home.

Last week, Moody's Investors Service joined Standard & Poor's and Fitch Ratings in downgrading GM and Ford credit to junk.

Both automakers are now drafting restructuring plans that will include job cuts, plant closures and major shifts in the way they do business.

Imposing stringent fuel requirements would saddle Detroit's Big Two with additional costs -- the last thing they need.

"We recognize that financial difficulties currently exist in the motor vehicle industry, and that a substantial number of job losses have been announced recently," says the Transportation Department proposal. "Accordingly, we have carefully balanced the cost of the rule with the benefits of conservation."

But this short-term break risks turning into a long-term handicap if U.S. automakers treat fuel-efficiency as a secondary priority.

Except for Ford, they're already missing out on a booming niche by lagging the Japanese in offering gasoline-electric hybrids.

In Germany, where gas costs double what it does here, automakers have surmounted the disadvantage by refining diesel technology. Today's cleaner and quieter diesel engines are 20 to 30 percent more fuel-efficient than gas engines. Ford and GM rely on European partners to provide diesel motors for their operations in Europe, where one in two new cars runs on diesel.

Hydrogen technology sounds fantastic but it's a ways off, and no one knows how the market will shake out. Will hybrids capture a big chunk of the market? Could diesels take off in the United States after cleaner diesel fuel becomes available next year?

Detroit's automakers haven't felt much urgency up to now to boost fuel efficiency for the U.S. market, where gas prices have spiked in the past only to subside afterwards. But there's no guarantee that they'll slide back.

The United States is still the world's biggest oil consumer. But over the next five years, most of the increase in global demand is expected to come from emerging economies -- and China already has a ravenous appetite for oil.

You can reach Christine Tierney at (313) 222-1463 or ctierney@ detnews.com.

[FUTURE_OF_GM]

Transportation Secretary Norman Mineta says the proposal will save fuel without compromising safety -- as if fuel-efficiency could only be achieved by reducing vehicle weight.

Not 2 paragraphs in and Tierney's bias already blatantly shines through. She's such a terrible journalist.

[z28pete]

Not 2 paragraphs in and Tierney's bias already blatantly shines through. She's such a terrible journalist.

[post="6484"]<{POST_SNAPBACK}>[/post]

Journalistic ability aside, high fuel prices will force the production of substantially higher mileage vehicles.

[sciguy_0504]

Besides what I'm about to talk about and the Cuban Missile Crisis, I don't admire JFK for much. He was a big part in changing the world. At a time the U.S. was faced with a large menace who threatened its national security and hurt its morale, he made the announcement and got the ball rolling to put the U.S. and its allies back on top. What I'm referring to is Sputnik and the subsequent moon landing-response by the U.S. By putting our heads together we came away, and on top, with many things. It's about time something like this happens again, this time in the energy sector. We're dealing with a large menace(s) (oil, Islamic terrorists) who threaten our national security, hurt our morale and damage our environment. If Bush came out tomorrow and said, "In 10 years, the United States will be virtually reliant-free on oil." he could set our country on a track to become innovative, technologically advanced and great once again. Some of the tools we already have. For example, many states will reimburse or pay for the majority (about 75%) of the cost of installing solar panels on your house. That way you save on electricity, help the environment and don't support the terrorist-supporting regimes in the Middle East (if you have oil heat). Other tools we need to invent, experiment with and refine, such as a new power source for automobiles and airplanes. The solution(s) needs to be mass produced, accessible and acceptable to the public. Sure it will cost a lot and take time, but in the end we'll be much better off. It will eventually come down to this so why push back the inevitable? If we can put someone on the moon we can find another way to power our world.

[Cremazie]

It would be nice if the big 3 could debut a truck that could take advantage of this fuel "opening" 1000hp v16 getting 6mpg, it pisses me off that people say these things! Look at the cars one on one, most of GMs cars have more power than toyotas and hondas and they get better fuel economy... but they still burn them at the stake!