Democratic Senator Calls for 50 MPG Fleet Average as Condition of Automakers' Aid
By Scott Doggett November 17, 2008
Automakers that receive federal aid should double the fuel economy of their fleets by 2020, Democratic Senator Bill Nelson of Florida said today.
Nelson's remarks during Senate floor debate suggest that Republicans are not the only lawmakers who may block emergency loans to the Detroit 3.
In an interview, Nelson said a new energy law that raises fleetwide fuel economy to 35 miles per gallon by 2020--about 40 percent higher than today--falls far short.
"Why should we be pouring taxpayer money into an automobile industry that has continued to resist higher miles per gallon, which has led us in part to the problems we're in?" he said.
Nelson said he wants a fleetwide average of 50 mpg by 2020. Asked whether he would seek to block aid to the industry over that issue, he said: "All of that is process. That is yet to be determined."
Nelson echoed other lawmakers who say the aid legislation should include pay limits for Detroit 3 executives. But he also said current senior management of the automakers should step down.
General Motors declined to comment on Nelson's proposals, pending the release of the actual legislative language.
Democratic Senate Majority Leader Harry Reid of Nevada said he plans to introduce a broad economic stimulus bill that includes aid to automakers.
If that bill fails, Reid said, he will offer a bill that provides only for expanded unemployment benefits and aid to the Detroit 3, expected to be $25 billion in loans drawn from $700 billion already approved to rescue the nation's financial system.
The White House today proposed letting the car companies take $25 billion in loans previously approved to develop fuel-efficient vehicles and use the money for more immediate needs.
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Click here to comment on this entry.This is extraordinarily dumb. Automakers have one hope in remaining profitable, and that's producing cars that people wish to buy. It's a complex and risky task, and cannot be summed up by a legislator's idea of a good MPG target.
Is he serious? "Led us to the problems we're in"? What problems would those be??? I think it's absolutely hilarious (and deplorable) that the Big 3 CEO's and upper management should be fired- Who the heck is going to replace them? Some idiot that has no clue how the auto industry works? Hey, let's let Nelson do it! He seems to know what's going on! Not. What about all of the CEO's of companies that are Actually Causing Us Problems??? Most of them still have jobs; Most of them are still taking bonuses; Most of them are still relying on OUR MONEY to do it with too! But I forgot, it's different for companies that make things and actually contribute something to our economy. And this crap about fuel economy being the car companies fault has just gone too far. Obviously, the people have voted. And no one wants to drive around in a noisy, cramped, underpowered, and ludicrously expensive Aveo (what we'd be driving if Nelson & Co. have their way). People are going to keep driving themselves back and forth to work in V8 X5s, 911s, E63s, Tahoes, and whatever the heck else they want because this is America and We Can!!! Our Veterans didn't fight (and die) against our enemies so that our government could keep telling us what to buy and how to live.
Sandcountry: As a CEO or other officer, the company's board of directors may see fit to give you a bonus in difficult times in order to retain you as a leader. It's unfortunate that a company may cut thousands of American jobs while giving their officers multimillion dollar bonuses. This is not limited to the auto industry or high profile companies either. Even small companies do it. They are betting that spending extra to retain a good leader will, in the long run, yield more benefits than replacing that person.
Jederino, it depends on your definition of "what customers want to buy". Customers have been told (by manufacturers) over these years that a reasonably-sized smaller car with decent acceleration (0 to 60 in 8 to 9s) are not cool...so they're now unwilling to buy them. If they're told that these cars are cool again, they'll eventually buy them.
The "what customers want to buy" argument is weak.
Don't get me wrong: I think a 50 mpg target as of now is unrealistic. But if there are no targets to force/motivate manufacturers to improve fuel economy, they never will! That's why we're in this mess in the first place. Manufacturers won't improve without (well-thought out) regulation.
Sandcountry, you point about veterans and America and We Can are neither here nor there. Autos with poor fuel economy are hurting our environment and also indirectly weakening our national security. Such autos need to be limited to those who really need them (eg, contractors). This is common sense......I would have thought our veterans died for an Ameirca where common sense prevails.
[BTW, I don't have a problem with E63s, etc, because they're ridiculously expensive and only a few can afford them....meaning that their collective impact is negligible.]
Greenpony, good point. But there is no denying that, in general, CEOs and executives (especially those in the US) are getting paid money they don't deserve. Most terrible CEOs still end up with huge bonusses. That's the real problem. In fact, even good/great CEOs are still being paid too much in this country.
That's absurd. People still buy boring white Camry's in droves. No one is telling people that gigantic SUV's are cool- people buy them because it provides a service to them that they want. If it's worth it to them to pay the price, then so be it. And no, common sense is NOT common! People are stupid. But it's their right to make bad decisions! As long as it doesn't hurt anyone else (which you'll never convince me that our environmental "concerns" are 1/10th what they're made out to be), then it's there right as American's to do it.
Sandcountry, why do you think minivans are no longer selling, despite they do a better job as family vehicle than SUVs/CUVs (save for towing)? It's because the minivan now has a "soccer-mom" image! The Camry might be boring, but for its core audience (middle-aged people who want an affordable, reliable and effective family car), it has no bad image! In contrast, the minivan and station wagon have an uncool image for their core audience.
SUVs and full-size trucks became popular because of their macho image. Of course they have other virtues, but image is a huge reason why people buy them!
Believe what you will about global warming, but it's a fact. Oil has other problems. I've talked about the national security implications. There's also the fact that our oil supply is finite and will eventually be exhausted.
The fact is that in the long term there is the NEED to use something other than oil. If every Tom, Dick and Harry drives a V8 because it's their right to (it is indeed), there'll be havoc sooner or later. Manufacturers are not willingly going to make fuel-efficient models as long as there aren't compelling economic reasons, so there is the need for government to persuade them (willingly or not) to do so.
"Manufacturers are not willingly going to make fuel-efficient models as long as there aren't compelling economic reasons, so there is the need for government to persuade them (willingly or not) to do so."
So, remind me again why it's the automakers duty to do this for us? Is it the contractors job Not to build you a big house if you live alone? Should we tell McDonald's that they Can't sell you a Big Mac if you weigh over 200lbs? Of course not. But, for some reason, millions of people think we should hold the auto industry accountable for our misdeads. And you think an SUV is too much for one person? Okay, well where does too much stop? Does one person really need an entire Honda Civic to get back and forth to work? How Wasteful! Only getting 30 mpg! They should be on a motorcycle. Or, better yet, a Bicycle! End our oil useage once and for all! Sound extreme? Well, we've already set one foot down the slippery slope... How long before we set the next one.
And please, forget the whole "We're running out of Oil!" garbage. We've only been hearing that since, what, the '30's? Emissions standards today are so good that passenger vehicles provide almost none of our air pollution (except for the worst 3% that make the rest look bad), and we aren't running out of oil. Where's the crisis, again?
"So, remind me again why it's the automakers duty to do this for us?"
Exactly my point! :) It's government's duty to put those regulations in place!
And to answer your other question: No, auto manufacturers bear a large part of the responsibility, but they are not solely to blame. Government can (and, IMO, should) impose heavy taxes on anyone who buys cars like the Tahoe, Silverado, and numerous luxury cars. People who really need those V8 vehicles (eg, farmers, contractors, police) can later get that tax returned as a tax credit.
Well, I'm not saying we'll run out of oil today, or in the next 30 years or in the next 100 years. But if you think we'll never run out of oil, then you're the one who's talking garbage. There is only a finite amount of oil.....that's a fact. No bull!
And, about emissions, there's always room for improvement.....if there isn't, maybe we should stop using oil altogether.
"Customers have been told (by manufacturers) over these years that a reasonably-sized smaller car with decent acceleration (0 to 60 in 8 to 9s) are not cool...so they're now unwilling to buy them."
Blackadder, I disagree with this rationale. Manufacturers must respond to buyers' needs and wants, and it's the buyers who set the pace as to what will sell and be profitable. To flip this around assumes more of a Marxist model of economics where competition does not exist.
Yet, I do agree with regulations if they are reasonable and uniform. Seat belts and airbags are a good example, because they save lives across the industry. But holding domestic automakers to an arbitrary fuel economy is a high-stakes bet that consumers will reward this decision. What if they don't?
Jederino, you've mostly misunderstood me.
Of course, it would be inaccurate/unfair to blame automakers alone for the increase in car size over the years. But there is no denying that their marketing has played a huge role. Directly or indirectly, advertising/marketing has implied that big horsepower is cool (even when customers don't need it).
I don't know why you're making the "Marxist" comment. (Marxist would be to say let the government take over the companies and offer only a few models...LOL!) All I'm saying is that, given the implications/consequences of oil, regulations or some other measures should be passed to discourage the use of cars that get poor fuel economy by buyers who don't NEED those cars. That's all I'm saying.
If you read my earlier comments, you would have noticed that I think a 50 mpg standard is unrealistic given today's technology. Nevertheless, I think that some sort of target should be set to force manufacturers to keep increasing fuel efficiency. I would be happy with 40 mpg. My whole point is that if government doesn't set (reasonable) targets, the auto industry will never improve fuel efficiency unless forced by an economic crisis.
"But holding domestic automakers to an arbitrary fuel economy...."
You've got me wrong again. I'm suggesting that ANYONE who sells cars in the US should be subjected to the standards. I've not singled out domestic manufacturers......why on earth would I want to do that?
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