October, 2009
Automotive and fuel efficiency news has never been more exciting! After years of mostly incremental changes amid a tense stand-off between powerful interests, everything seems to be changing all at once. The changes are seismic - sudden and huge - and our landscape will not be the same when all the dust settles. Here are some highlights:
· The Obama administration, reversing eight years of foot-dragging by the Bush administration, used the rule-making power of the National Highway Transportation Safety Administration (NHTSA - "Nit-sa") to require a real increase in CAFE (corporate average fuel economy) standards - to 39 mpg for cars and 30 mpg for light trucks by 2016. This moved forward by four years the more leisurely mandate imposed by Congress in the 2007 Energy Bill.
· General Motors, continuing its long slide toward insolvency, persuaded the Obama administration to "lend" it $16 billion to stave off a bankruptcy filing, then filed for bankruptcy protection anyway. Another $15 billion in federal funds to help parts suppliers and auto loan companies including GM's GMAC soon followed. One disturbing fact that is rarely discussed is that the bankruptcy filing enabled GM to escape liability for personal injuries and wrongful deaths caused by SUV and pickup truck rollovers and other product liability claims.
· Chrysler, long the weakest of the "big three," was cut loose by Daimler and privatized by the same hedge fund whose ownership spelled the end for Mervyn's last year, which then finagled a $9 billion federal bailout before filing for bankruptcy protection. After bankruptcy, Chrysler was acquired by Fiat, the iconic Italian car maker known for small cars and shaky finances and Chrysler is now run by an Italian CEO, Sergio Marchionne.
· The Obama administration's EPA approved California's application for a waiver allowing it to regulate greenhouse-gas emissions from cars and trucks more stringently than the federal government's standards. The waiver application had become highly politicized in the Bush administration's EPA and had languished for months, despite pressure from Senator Barbara Boxer and environmental groups.
· Just as Toyota released the 50-mpg 2010 Prius, the Obama administration's hugely successful "Cash for Clunkers" program this summer took 700,000 gas guzzlers off the road, jump-starting the flat-lined automobile sales industry and putting as many fuel-efficient cars on the road. In addition to these concrete accomplishments, the program also got lots of people thinking and talking about the benefits of unloading "clunkers" in favor of fuel-efficient cars.
The top ten trade-in models according to the Cash-for-Clunkers program included the Prius at fourth place:
1. Toyota Corolla
2. Ford Focus FWD
3. Honda Civic
4. Toyota Prius
5. Toyota Camry
6. Hyundai Elantra
7. Ford Escape FWD
8. Dodge Caliber
9. Honda Fit
10. Chevrolet Cobalt
· The recession brought dramatic drops in miles driven (VMT = vehicle miles traveled): 10 billion fewer in 2007 than 2008 and an even bigger drop in 2009: the Federal Highway Administration showed that vehicle miles traveled (VMT) during the first three months of 2009 declined by about 11.7 billion miles. Big drops in fuel consumption and highway deaths went along with Americans' reduced travel. The rate of highway deaths per 100 million VMT hit 1.12, the lowest on record. For more charts like the one below and the facts and figures that go with it, visit the Energy Information Administration's website.
· GM's Bob Lutz, the veteran auto-industry executive who used to personify the domestic auto industry's opposition to CAFE standards, is now the champion of the Chevrolet Volt, now projected to be the first plug-in hybrid made in America. Now that's progress!
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