Love the title!

People on either coast just don't seem get the needs of the people living in the "flyover states" (i.e. everything between NY and LA). Unfortunately those people also seem to have the loudest voices. Here's to hoping they go hoarse one of these days.

GM is right on track in the SUV/pick-up line. I had to do a double take when I saw a Chevy Tahoe that reported 19-20 mpg city! At first I thought that was some kind of error. But now I agree with the General that this is the future for trucks in America.

The Chevy Express van is long overdue for a rehash too, and needs to be more competitive with the Dodge Sprinter. Time to weed out this gas guzzler for good.

Toyota, Ford and Dodge are going to have a rough ride in trying to keep up with GM in this category.

I believe the government should keep its hands off the marketplace and let the consumer decide what is right for their own use.

I would rather see minimum standards of 30 mpg for cars and 20 mpg for trucks at the present time. This standard appears readily obtainable today.

I also advocate replacing the current gas tax with a 100% excise tax on gasoline. (You can shoot me later).

This will encourage consumers to buy more efficient vehicles and consume less fossil fuels. Considering our future, this move is absolutely necessary.

The tax itself should be allocated to rebuilding our deteriorating infrastructure (ie. highway construction and maintenance). :)

By opposing the CAFE provisions in the senate, GM is putting profit over what is right.

Heaven forbid, it might cause GM to innovate.

In response to Austin (October 4, 2007)

GM isn't opposing CAFE. GM - and the other automakers - is trying to find a balance to develop, produce and sell fuel efficient vehicles in a manner that will not burden the entire auto industry.

For instance, large trucks are notorious for poor fuel consumption and economy, but General Motors, as well as the other automakers that produce large trucks (Ford, Dodge, Toyota, et al.) are trying to make these vehicles as fuel efficient as possible. These kinds of vehicles are NEEDED in today's society for professional work to personal recreation, so let's make them as fuel efficient and environmentally friendly as possible since we cannot, and are unwilling to forgo them.

And another thing: I agree with GM that CAFE is based on bad policy and poor decision making, so shouldn't one of their goals be to change that policy and their methodology of decision making to something that makes sense and will be beneficial not just to the automakers, but to EVERYONE?

Though I disagree with Friedman, it was great to see toyota getting the blunt of the blow and not GM.

Thanks GM for taking the high road on the matter by backing the importance of the issue, not slamming on the company he went after.

We should raise the gas tax to European levels and offset it with decreased income tax. This way the lower and middle classes will not be hurt by higher gas tax, and they can start to save themselves some money by conserving gas.

I find it amusing that Mr. Friedman conveniently ignores proposals by Rep. Dingell, former Vice President Al Gore and Michael Jackson, chairman of the nation's largest auto retail network, to impose a higher federal gasoline tax or a carbon tax to help reduce America's addiction to oil.
It is a favorite omission of CAFE supporters and other adherents to voodoo environmental economics, a science that says we can control consumption of a desired commodity by making it cheaper to use.
It is a nutty concept that works just fine for politicians who are freed from the responsibility of imposing taxes and who, via CAFE, are allowed to escape the discomfiture of telling Americans the truth about the global oil situation--which is that increasing demand for a dwindling resource means that everybody is going to have to pay more, do more for fuel conservation, and that "everybody" includes consumers. There is nothing in the House or Sentae CAFE bills--not one line, not a single word--that calls upon consumers to do anything more, pay anything more for fuel conservation.
There is nothing in either of those measures that addresses the historical truth of CAFE. To wit: The higher technical fuel efficiency achieved by CAFE, coupled with the developed world's cheapest gasoline, actually lowered the price of driving in America. Lower driving costs led to increased consumer miles driven and more consumer demands for increased horsepower, more safety, bigger vehicles and more of those trucks that Mr. Friedman apparently deplores.
And that all led to America's increased consumption of petroleum. It is sheer hypocrisy to ignore that reality.
As for trucks, hmph. What is it about well-paid, effete Eastern journalists that causes them to ignore America's need for trucks of all sorts?
Is it that they believe the food in their delicatessens arrive at those stores via subway, Yellow Cab, or limousine? Are they all transplants from Coral Gables, Fla., the government of which has no problems with allowing immigrants, legal or otherwise, to drive and park their pickups during the day while serving the rich; but repeatedly has tried to enforce ordinances banning pickups from being parked on Coral Gables streets at night?
Mr. Friedman has been all over the world. But, considering his opposition to trucks and his odd lack of comprehension about why greener-than-thou Toyota is going after that market, he clearly has not visited any of America's southern states, or any of those rural areas in the Midwest or West, or West Virginia where people with real work to do can't do that work in a Toyota Prius.
To me, truck opposition is akin to class bias as in: "The better sort of people don't buy or drive big trucks."
Which, of course, is baloney--pretty much like the bulk of Mr. Friedman's argument.

The whole approach of CAFE is wrong-headed and always has been. It is a typical Communist approach, where the all-knowing "leaders" decide what vehicles you should be allowed to buy, since, in their view, us dolts are clearly incapable of choosing correctly.

The result is that the manufacturers are told to push on a rope and sell cars that people don't want to buy. That doesn't work very well. When gas is cheap, most people don't want to buy something the size of a Chevy Aveo.

If we want to improve the fleet fuel efficiency, there is a very simple way to do it, one that has been proven to work overseas -- increase fuel taxes. Increase the fuel tax over time (say 5 years) say $0.50 to $1 per gallon. That will definitely cause people to want to buy different vehicles and the manufacturers will respond in kind.

In addition, CARB needs to get canned so there is one AND ONLY ONE authority that governs emissions standards. The proposed diesel emissions standards need to be changed to be in concert with those already in effect in Europe.

The demand for fuel shows significant price elasticity. Congress should work with human behavior, rather than trying to fight it, as they have with CAFE standards.

You are absolutely right that the correct policy tool is a federal fuel tax. Not only does this create a level playing field for manufacturers, it also captures externalities (econ term for cost not directly reflected in product) in the production of petroleums based product. ( I include CO2 in that).

But this is something that the Europeans understand...

Nice post. But you realized you just asked a reporter to do his job and know the topic on which he speaks, and present a balanced view. That wouldn't be interesting to readers, and would take far too much work. Why not just ask for pigs to fly, ending world-hunger and creating world peace all at the same time?

Friedman is nothing more than a blow hard. Hammer him at will.

"Is there a company more dangerous to America's future than General Motors? Surely, the sooner this company gets taken over by Toyota, the better off our country will be."
-Thomas Friedman

Obviously, this just shows us that Friedman doesn't know what he is talking about. What has changed at Toyota between the time Friedman made that statement, and now? Nothing. Friedman does two things that controversial journalists do very well, make the large corporation look bad, and go against popular thought.

How easy is it to make GM look bad at first glance through the ink of the NYT?

-Oh, GM, crack dealers they are. They have you buying SUV's that get bad gas mileage, and you don't need them. It's all an advertising ploy and GM is using mind control-

Something to that effect. If you don't think any farther than that statement, you could be convinced he is right.

How easy is it to take popular, but unjustified opinion of Toyota being a conscious car company, when the Prius is only half the story?

-Toyota is pompous with selling their hybrid that they make hardly any money on, and touting it as an ego, earth-conscious hippy car, but they make some big bad vehicles too-

Thomas Friedman is the Micheal Moore of the NYT. If I shout something controversial or make an idiotic statement, and I shout it loud enough, people will listen to me.

I'm a GM employee who cares about the environment. In fact, I'm a card-carrying member of the Sierra Club (gasp)! GM's stance on CAFE makes sense to me. This legislation is about politics, not the environment. I'd much rather GM and other automakers invest dollars in technology that will actually make a difference.

Friedman might be a bigmouth, but in this issue he's got the right idea. Consumers want environmentally-friendly cars and trucks. That is technologically possible, but GM doesn't feel like investing in innovation in this area. They would rather put their money in more marketing. So lawmakers are forced to try and prod the Big Three along w/fuel efficiency legislation. Don't be fooled by the excuse that 'the people like their trucks'. Of course they do. But they'd like them more if they required less gas. (I know, my dad owns one). How can GM defend trying to maintain the status quo from 25 years ago?

Oh yeah--I own a Japanese truck, built in Tennessee. Among other reasons, for fuel-efficiency.

If "putting cars and truck under a single average, the bill would damage full-line carmakers and eliminate some of today’s most popular vehicles,"

when all that bill asks for is 35mpg, then GM has squandered the past two decades of stagnant government regulation and failed to innovate in the market. Those popular models are clunkers. 35mpg is a low bar.

Was 20 years not enough time for GM to build a 35mpg truck? Is less than 10 mpg improvement in 20 years acceptable? Has there been so little improvement in engine technology? How low should our expectations be?

Henry ford said of his first cars: "If I'd asked people what they wanted, they would have asked for a better horse."

Good business involves leading a market, not pandering to it as cheaply as possible.

GMs wants me to believe I can't have a good, safe, reliable AND fuel efficient car, and falls back on their track record of a lack of innovation in efficiency to "prove" it.

I'm afraid GM does believe it can't be done; that it's unreasonable to expect them to build 35mpg trucks 20 years after they were building 15mpg ones.

That's too bad, because I'll buy my next truck from whoever does.

I assume Mr Freidman will be going after Honda next, since they are obviously spitting in the face of conservationism by producing a new and larger Accord. Even though it may (or may not) achieve better fuel economy it certaily must use up more in the way of resources, virgin or recycled. GM has certainly stepped forward with the recent disclosure via Motor Trend of the directive that no new model of an existing vehicle is allowed to come to market without improved mpg. Not just the same, but improved. Unfortunately the easy way out of this is to plug along with dated products and not offer redesigned and invigorated competitive products - I'm referencing the potential demise of a new G6.

But my challenge to the GM engineers is to not let this happen, but to instead stay on the cutting edge of new and improved. You an dwe already know of the improved mpg of the DI V6 in the CTS, don't forget many claims of owners of Solstice GXP with DI that achieve better mpg than their non-boosted brethren. Obviously next on the agenda is a DI V8, or two or three. DI for mpg alone is not for every vehicle, as the cost might not be justifiable on a bread and butter Cobalt or G5 but on all high end models it may be better in the long run than AFM. But in your rush to everything new don't leave tried and true supercharging in the dust. Real world numbers of a s/c 3800 GP GTP of 30-33 mpg at sustained 75-80 mph and long term combined overall mpg including stop and go and winter tires for 6 months of 23-24 mpg does two things. It justifies my faith in GM and what my 5 year old car can do, but on the other hand worries me that a replacement G8 won't even come close (even in V6 trim)

I am not a big fan of CAFE or Mr. Friedman's poorly thought-out arguments, but I did find this column in the New Yorker to be a very interesting reframe of the CAFE debate, http://www.newyorker.com/talk/financial/2007/07/23/070723ta_talk_surowiecki. Briefly summarized, James Suroweicki argues that the wide public support (3 in 4 support raising fuel economy standards) for increasing CAFE standards despite the desire to drive gas guzzling cars is not as irrational as it sounds: "In calling for a law requiring better gas mileage in our cars, then, voters are really saying that they’re unhappy with the collective result of the choices they make as buyers. Sometimes, they know, we need to save ourselves from ourselves."

Tom,

I'm a big fan of American automakers and I definitely understand where you're coming from. It doesn't seem fair, or maybe even rational, that cars and trucks are lumped together in CAFE.

Having said that, I think a lot of us feel like major steps need to be taken to help improve our environment. Without sounding like Chicken Little, there is talk of a "point of no return" and I'd rather lump these vehicles together to challenge companies to create more efficient vehicles, regardless of classification, than have different rules for "trucks".

I'm sure I'm not the only one who thinks doing this would result in more autos made that would be labeled "trucks" in order to work the system.

Thanks for your time.
Dan

Regarding a 35 mpg average -- if you visit the EPA website and look at 2008 ratings, you will find very few vehicles of any type that average 35 mpg. European fleet averages get close to this only because vehicles are much smaller and diesels are much more common.

I think it is a free market versus a government mandate argument.

It is apparent that the automakers have accelerated drive train enhancements in all areas and have accelerated the development of these technologies at a faster pace than any government mandate could ever have done.

With a combination of Wall Street speculation on oil trading and customer's efforts to reduce high gas bills government legislation was caught in the dark ages. And any new government intervention seems out of touch and forced.

The fact is government is fighting a 21st century battle with 20th century ideas and 19th century methods.

When they should be encouraging E85 pumps and following the example of Brazil's energy independence success they continue to follow a failed and ineffective system and of course automakers do not want this forced upon them.

In the end just like GM solved its own health care crisis and resolved its own cost competitive issues, GM will find a way to survive and thrive - Just so long as the government does what it is supposed to do.

Get out of the way!!!

The comments above are simply wonderful. Tom, you did a great job on the response. I would only add the following thought:

Freidman and others who contend that CAFE is "right" and, therefore, the companies should simply fall in line, simply do not understand the system of regulatory policy development we have chosen in this country. That system, by design, is one of contention. Read that as, it's not sinister to contend your position in a process that by design demands debate. Do you really want a world that is completely run by politicians? The trial bar? How about a world dicated by the environmentalists? Or even the corporatations?! None of us would...and that's the point.

To wit, I suspect that if the NYT's was regulated to only 10 pages of copy to save trees and it lost all its ad revenue as a result, it too might just get a little testy with the regulators. Of course, it already is a crumbling empire that is being out gunned, out paced and simply relegated to the backburner by all the other forms of competitng media. I suspect that if Mr. Freidman continues with his winning ways, he too will meet his demise.

Tom,
"Within every untruth lay a kernel of truth!"
FACT:
1) America, at this time, consume more petrochemical product that any other nation on this globe!
2) Americans today purchase and drive 'body on frame' vehicles, truck and suv wares, as their PARENTS did decades ago powered by variations of same V-8 hardware.
3) America MUST move to alternate (varied) methods of transportation for this new millennium!
Consider:
a) A novel 'passenger' truck, NOT a Hybrid, SUV or 'Work' truck vehicle!
b) Do as the U.S. Department of Health states,
"Lose the Weight! ( (Laws of Physics still apply!)

There has been some talk about why there is not a European like tax in America. The short answer is that if you are saying you want a more fuel efficient vehicle because gas costs too much, then taxing that same gas (or raising the price of gas artificially) to lets say $5 a gallon will only make our current "problem" worse.

If the "problem" is not high price of fuel, but air quality, it is not the rate of consumption per mile but rather the rate of consumption at idle -at red lights, in heavy traffic etc.- that is a more likely culprit. the answer is also simple (and two fold as a plus) hybrid cars like the Pruis, as well as a better road system with little or no traffic lights or unnecessary stops and roads made to handle more traffic loads at any given time.

In the end, I really just wish the government of this country would just let the market do what it does best. Free market enterprise is the only way to go. No taxes, no laundering of revenue by the government, nothing to impose upon the will of the people.

Jack,

You, Friedman and many other Big 3 bashers are in fanstasyland. No offense, but I am guessing you are not an engineer or someone with any type of technical background. People like you and Friedman make unrealistic demands and claim that GM (and the other two) have secret technology available to magically get 35mpg from 3 ton SUVs but are unwilling to spend the money to bring that technology to market. Such and argument is totally irrationaly and counterintuitive. If GM had a magic bullet to coax 35mpg out of large vehicles with NO cost impact to consumers they would bring it to market ASAP. The problem is no such technology exists. We all know that innovation can allow to to get more power and SLIGHT boosts in fuel economy without losing power but you cannot change the laws of physics. SUVs, crossovers and pickups are HEAVY and there is no way to get great mileage out of them without the use of expensive hybrid drivetrains or expensive diesel engines.

Friedman's comparison of the US to Europe is a complete joke and exposes his ignorance. It's embarrassing that the NYT would even let someone like him continue to comment on the auto industry. In Europe they have gas prices that Americans would never tolerate, diesel engines that wouldnt meet upcoming (or existing in some places) emissions regulations, great public tranist (most Americans dont use it and think its a waste) and they do not drive SUVs and pickups. Friedman is too narrow minded to recognize that GM, Toyota and others are providing the vehicles Americans want to drive in America just as they are supposed to. The vehicles that sell here wouldn't be popular in Europe and vice versa. Europe has a different mentality, higher gas prices, less sprawl, more urban congestion, smaller urban roadways and a great rail system. It has little relation to American when it comes to transportation and that's why GM and Toyota have lineups over there with far better mileage.

All I want is for Friedman and anyone like him to show us some automotive engineers who will verify their claims that we can get 35mpg+ out of the SAME type of vehicles we drive today with minimal cost impact. Yes Americans say they want more CAFE standards in surveys but thats because many in the media (and idiots in Congress) have propogated the myth that you get drastic improvements in mileage with no sacrifice in power, affordability or vehicle size.

I hate when an urbanite who most likely does not own an automobile, tells everyone else to drive a certain type of automobile. I think Friedman is just trying to get attention. A reporter who does not gather attention from their writings in not a successful writer. Also, a writer that does not write for their intended demographic will not have a popular opinion. Thus, Friedman is doing what he can to gather attention, though his theory is in correct.

I am impressed that GM continues to increase mileage on all their vehicles, it is their commitment to give their customers the best product they can.

People just seem to love conspiracy theories. Lord only knows why.

Here's the reality -- if GM, Ford, Toyota, or Chrysler, etc., could build a full-size truck that could still pull 10,000+ pounds, carry 1500-2000 pounds in the bed, get 35 mpg, push a snow plow, meet crash safety requirements, and do it at a reasonable cost, they would do it. It would sell like hotcakes and they'd clean up in the marketplace.

So why don't they do it? First, there's this little problem called physics. It takes a lot of energy to move that much weight around.

Will there be technological breakthroughs that may make this possible in the future? Maybe. Given the fact that such trucks currently get around 15 mpg, it is quite a leap to get them to 35 mpg. The fact is, you can't schedule technological breakthroughs. You can spend a lot of money and work hard on them, but you can't schedule them. Sometimes all that money and effort pays off and sometimes you find that you went up a blind alley.

Look at battery technology. A friend of mine is a PhD battery chemist. He's been working for a battery company for about 20 years. Most of the improvements that he's seen over his career have been on the order of single digits per year. That is, it is a good year if they end up with a couple percent better battery life at the end of the year. He and his team work on improving battery performance all day every day. That's what he's been doing for 20 years. But he hasn't seen (and doesn't expect to see) quantum leaps in performance.

The auto manufacturers and their suppliers are spending billions (that's billions, not millions) each year just trying to meet the coming stricter emissions standards. That's in addition to the billions they are spending trying to improve mileage, the billions they spend trying to improve reliability, and the billions that they spend trying to cut costs.

If it was easy to drastically improve the mileage of light trucks, the auto makers would have done it already. It isn't easy and a 35 mpg full-size pickup is a pipe dream given the current technology.

response to

Posted by: William Walling on October 4, 2007 8:50 PM

1. China is close to or already consumes more energy, period, than any other country. The cost of improving American emissions by even just 1% could probably improve emissions in China 10%, and would have a greater impact on the environment. This is where I support holding the line here and making everyone else catch up - then we'll all move forward together.
2. For pure hauling or load carrying capacity body on frame it is, a Ridgeline can't get anywhere near 10,000# trailering. (and an Element cannot haul 4 250# passengers let alone their personal items for a trip (GVW 4450, curb wt 3578 do the math)
3a. The aforementioned Ridgeline, or a unibody Ute from down under.
3b. That is unfortunately like asking a heavyweight champ to drop 50 pounds to middleweight class, but still compete against heavyweights. Yes you can maintain strength and lose weight with alternate materials, but it all comes at a price. PLastic is light but needs metal behind it for strength. Aluminum body panels save weight but at some expense of design flexibility and surface strength.

And it’s why our new crossovers –- Buick Enclave, GMC Acadia and Saturn Outlook –- are a smash hit with customers who want space for a family in a stylish, efficient package.

As a new parent, I've heard the argument that I've got to buy some gigantic SUV just because I'm going to have a kid. I don't buy it for a second. In Europe they can get by just fine with something the size of a Vibe or an Astra. Why is it that Americans think they need to be able to haul seven people around when they've got two kids. Do they enjoy being chauffeurs for their kids and all their friends?

And that is exactly what the CAFE provisions of the Senate energy bill are –- bad policy. By putting cars and truck under a single average, the bill would damage full-line carmakers and eliminate some of today’s most popular vehicles. That’s why GM, Toyota and other industry leaders are backing an alternative that would substantially raise fuel economy standards, but do so in a balanced and reasonable way.

So GM is saying that it's impossible to make an SUV that gets over 30 mpg. It's nice to see them acknowledging their limits.

That’s why GM, Toyota and other industry leaders are backing an alternative that would substantially raise fuel economy standards, but do so in a balanced and reasonable way.

Could you please tell us what that alternative is rather than complaining about what Thomas Friedman said?

Finally, we had to chuckle at Mr. Friedman’s praise for vehicle fleets in Europe and Japan.

I've been watching Top Gear, and I have to say that vehicle fleets in Europe are significantly more diverse. There are more makes and models available, and far more engine configurations available. GM prides themselves on making a model for every car buyer, but the only production GM vehicle that I have any interest in at all is the Opel/Vauxhall Astra with the 1.7L diesel engine.

Last week Top Gear had a special on compact MPVs. They're small, four-door vehicles with a third row (usually removable or collapsible) and a hatchback. They concluded that the Ford C-Max was the best of the ones they tested. The crazy thing is that this vehicle, which has third-row seating and can still do 0-60 in 11 seconds gets 57.6 miles per gallon!!! The more powerful 2.0l diesel engine does 0-60 in 9.3 seconds, has a top speed of 125mph, a six-speed gearbox and gets 50.4 mpg.

Why aren't cars like that available in the US? Do you not think people would snap them up?

GM is a great company. If it were my company I would stop all advertising with the New York Times and it's affiliates. Perhaps then they would stop giving a forum to WACKOS like this Friedman guy. The power of the purse.

I wonder if Friedman can calculate the average of 20-mpg and 60-mpg. (The answer is 30-mpg.)

So whats the big deal about having a fleet average of 35 mpg? All you have to do is sell two 60-mpg minicars for every single 20-mpg truck. Heck, people are waiting in line to buy 60-mpg minicars aren't they?

It must be true. I read it in the NYT.

Paul:

You can thank the EPA and CARB for the fact that clean diesels are not available in the US. The diesel engines that you mentioned will not meet current, let alone upcoming emissions regulations in the US.

Since we now have low sulfer diesel fuel, we are starting to get some more diesels, but it has been a huge problem (technologically and cost-wise) to get them to meet the emissions requirements. The added cost just for the new pollution controls (e.g., Mercedes upcoming urea-injection system called AdBlue) is between $1000-$2000 per vehicle. That is on top of the existing premium of $1000-$2000 per vehicle for the diesel engine itself.

And until recently, the cost of fuel was low enough that there was little demand for such vehicles. The cost of fuel has gone up, but it takes about 3 years to bring a new car to the market. Until recently, very few people in the US wanted to buy small cars.

The car manufacturers build cars that people want to buy. If the laws and regulations force the manufacturers to build cars that people don't want to buy, they will be in deep trouble. The better solution is to work with human nature. Change what people want to buy. You can do that by increasing the cost of fuel. Increase the gas tax, the cost of fuel goes up, the demand for smaller, more fuel efficient vehicles goes up, and the fleet economy goes up.

It is really quite simple. Reduce the regulations. Eliminate CAFE requirements. Increase the fuel tax.

And btw, Ford is already planning to bring over the S-Max and probably the new Mondeo and next gen Focus as well. But it won't happen for a couple years -- they don't have much money left and engineering the vehicles for the US market (crash testing, emissions testing, etc.) costs big money.

Paul, the Ford C-Max does not have a third row seat. If it is the episode I think it is, Top Gear preferred the larger (lower midsize) S-Max, which does have an optional third row seat. Two compact MPVs that do offer a third row are offered in the US—the Kia Rondo (Carens in other markets) and Mazda5. The Kia is doing well, but the Mazda is struggling, perhaps because in the US market you can get a base fullsize minivan for similar money. GM (who revived the 7-seat compact MPV segment with the Opel Zafira, now in it's second generation) will add a new 7-seat compact MPV to its US production line in a couple of years, but plans only exports (probably replacing both the 5-seat Chevrolet Versant and 7-seat Chevrolet Zafira [a version of the first-generation Opel still sold in Latin America]) at this stage.

The diverse vehicle fleet in Europe has many drivers—one is simply being the historical birthplace of the automobile. Another factor the large number of countries, many of which had their own protected automotive industries. Many of these automakers have since disappeared, were acquired by other carmakers who needed capacity or wanted to expand their lineup; but many remain. The similarity in the market due to taxation on larger engines, and high fuel prices has made Europe attractive to Asian automakers as well, and not just the ones you are familar with in the US, but smaller companies such as Daihatsu and Perodua (direct and indirect subsidiaries of Toyota), Proton, Tata and Mahindra (an old Willys Jeep licensee). Less strict safety and emission standards, and higher prices for most vehicles mean that many automakers that find US market demands too challenging find a toehold in Europe. Many European automakers have actually pulled out of the US market because the investment required was so much higher, and prices so much lower (even VW has lost $1billion in the US in a single year recently, and much of their production is sourced from Mexico). Taxation and higher fuel prices mean smaller vehicles can fetch much higher prices than they do in the US (A subcompact Opel Corsa ranges from over $US 16,000 for a 1.0 L 58 hp model to more than $US32,000 for a 188 hp 1.6 Turbo—the 1.7 L Astra turbodiesel Paul admires so much is also over $US32,000 [prices in Germany including 17% sales tax]). This makes it possible to produce vehicles with much higher content, more expensive diesel engines (except in the smallest, cheapest vehicles), and in a wider range of small size classes than have been available in the North America. Lets take the Focus C-Max Paul mentioned earlier—as tested by Top Gear this small MPV has a base price of $US26,500 for a 98 hp 1.6 L, up to over $US36K for a 134 hp 2.0 L diesel—and still only 5 seats! The S-max starts at nearly $US36K in the UK, and goes up to $US43K for the 216 hp 2.2 Turbo. A 7-seat compact MPV such as the Zafira is not much cheaper (about $US 1800 less than a 7-seat S-Max with a similar engine, but actually peaking at a higher price for the range-topping 237 hp Zafira OPC), but naturally you can expect better fuel economy than a larger midsize MPV, especially if you opt for a smaller engine than is available in the larger model. With all those models from all those automakers competition in Europe is cut-throat—these higher prices are largely the cost of better fuel economy and higher content. The average family has to be satisfied with a 4-cylinder Astra instead of a midsize V6, because a midsize V6 is simply far too expensive to either buy or operate (the cheapest V6 as large as a Camry or Accord available in Europe is the Hyundai Grandeur [Azera], at $US55K. Even a smaller Sonata is over $US40K for a V6, and $US35K for a 4-cylinder, while a more economical diesel is $US38K). Automakers (including GM and Ford) are quite happy for higher fuel prices and taxes to drive up demand (and thus prices) for high-mpg cars in the US market to levels similar to those in Europe, but quite naturally think it is insane to expect the same fuel economy in much larger vehicles for much lower prices. Automakers know how much more it costs to build high-fuel economy vehicles because they already make them—at prices which would make US consumers keel over in apoplexy.

Response to stated John P concerns -

Based upon answers provided another market analysis, 'actual' customer vehicle USE data not aspiration or past registration, is indicated.
Consider:
Americans historically do NOT use their vehicle for 'strenuous' duties.
EXCLUDES COMMERCIAL or TOWING USAGE!
Time for an 'industry changing' vehicle BEFORE another vendor devises then manufacturers it.
FACT:
VW built their business around one core vehicle type.
People thought wares ugly and wouldn't sell, decades of global sales success proved them wrong!

It is so refreshing to see GM taking Mr. Friedman to task. Thank you. He has been spewing his mind-numbing ignorance for so long I think some people actually believe him. But to see someone, anyone, (especially knowledgeable people at GM) reply is just FANTASTIC!!. And thank you for having a 'blog'. It is just great.

Im a carpenter. I carry tools and have to get stock in the morning before jobs . I also have to plow a long driveways as im in the snowbelt. A Sierra works for me .Show me a vehicle that gets 35 m.p.g.and can do all that the Sierra can and ill buy it .

the price of gasoline means little to most car owners as depreciation and insurance is their biggest expense so a gasoline tax will do little if nothing to stop people from driving.

While I suspect the NYT went a bit overboard, there is some truth in what it says. Instead of pandering to a chorus of naysaying carmakers who whine about how they can't possibly meet revised CAFE standards, maybe the government just got fed up. If there had been some improvement in the past 20 years, maybe there would be no call to create a new, consolidated CAFE standard. But this didn't happen. Now all the carmakers are going to be forced to turn their attention (at last) to improving gas mileage on ALL their vehicles, cars and SUVs and light trucks and minivans. Personally, I think this change is long overdue.

GM just achieved record sales in Europe! Well done! Keep up the good work!!! By expanding the Cadillac line-up and offering hybrids, Cadillac can one day defeat Lexus, and GM will no doubt defeat Toyota again.

Hail GM!
American Power!!!!

Doug,

You wrote: "GM has squandered the past two decades of stagnant government regulation and failed to innovate in the market. Those popular models are clunkers. 35mpg is a low bar. "

Then where are all the 35mpg trucks by (fill in your favorite non-GM auto company here)?

You also wrote:
"Was 20 years not enough time for GM to build a 35mpg truck? Is less than 10 mpg improvement in 20 years acceptable? Has there been so little improvement in engine technology? How low should our expectations be?"

See above response. GM doesn't have a monopoly on engine technology, but I don't see anyone else making 35 mpg trucks.

In fact, if you look closely, you will find that GM is the LEADER in fuel economy for full-size trucks. Where is Toyota's full-size hybrid SUV? I don't see it either. Why can GM build a hybrid Tahoe that gets better city mileage than a Camry? GM must by paying off Toyota to build fuel-thirsty cars.

Obviously, there are people driving body-on-frame SUV's who don't need them. They buy them because they are cheap to own, safe, and they can't be beat for hauling families on long trips. The problem is the environmental impact.

Only a carbon tax, as proposed by that villian congressman from Michigan, John Dingell, will change the carbon use of typical Americans. Those people in the SUV's will have to pay the price for driving them. CAFE provides no incentive for a person to buy a smaller car. A fuel excise tax (part of Dingell's proposal) provides a DIRECT incentive.

And, oh, by the way -- the way things are going, the first company to build a 35 mpg truck will likely be GM.

Michael:

I can't stand when people infer that the Big 3 have kept CAFE standards the same for 20 years and pretend that vehicles are no more efficient that they were in the 80s. That is complete hogwash. While overall mileage hasnt increased much the size, weight and power of vehicles has increased significantly. The bottom line is that auto manufacturers have used technology to give us a lot more hp and performance with a minimal penalty at the pump. Sure car and truck mileage hasnt gone up much in 20 years but compare the weight and power of the average sedan today to a sedan of 1987. The safety features and technology people demand has driven the weight of cars up and people have demanded increased performance at the same time. If Americans showed a preference for efficiency over acceleration and utility than the choices in the market would've reflected that. If it wasnt for GM (and others) applying technology cars today would be gas guzzlers considering the outstanding power they produce. You used to need a huge V8 to get 250hp and now you get that from a 2L turbo engine.

i have some opinions regarding Jim Taylor's comments to replace STS and DTS with one car. Basically i see it as overhauling the STS and scrapping the DTS, possibly replacing with a new Cadillac Sixteen-derived full-size RWD sedan that can compete with S class, 7 Series and LS. As for a subcompact below CTS, i dont it's such as good idea since you would probably have lower margin, unless you need it to lower GM's CAFE. But of course every Cadillac from now on must be a WINNER, because if it isn't then sales will suffer. If you can come up with a winning design for the next STS, then i think it will be the best looking midsize luxury sedan able to compete with the next 5 Series. These are the sedans for business executives.

i really have no idea why would anyone buy a FWD Accord sedan, even though it looks good. Perhaps GM should market more to Asians, especially the new immigrants such as Indians and Chinese. The US demographics is changing, with rapidly rising Hispanic population especially in California. GM's marketing should definitely be tuned to target these demographics.

I agree with you on CAFE, but I would like to see your small cars be more competitive with the foreign makes.
Can you please tell us why the Aveo gets such poor MPG?
Is the next Cobalt going to be more fuel efficient? I certainly hope its going to be better all around. It had better be!

What are you talking about Irv and GM? U.S. automakers are just trying to stave off the inevitable by postponing CAFE standards. Everyone thought toyota was such a green company but now theyve shown their true colors, in other countries where the fuel standards are much higher due to taxes and environmental reasons toyota manages to produce cars effectively still maintaining its role as the worlds largest automaker. They could use those cars as the model for future American cars to adjust to the fuel standards hike in the states, but no. The only reason Big T made those other more fuel efficient cars in the first place is because they were the only cars they were allowed to make. The Prius is just a halfway vehicle(still uses oil)produced by toyota to satisfy those green American environmental types, But this one aint satisfied, If toyota was truly against global warming and not all about the benjamins, the Rav4 ev would still be out today. What do you have to say about that Irv Miller? And don't tell me the sales weren't that great, because you didnt advertise it well enough. Hello? I'm in Florida, and I didnt hear anything about it until the program was finished. How do you explain the fact that you tried(like other automakers) to destroy the electric vehicles you LEASED after CARB loosened its grip on the Zero Emissions Policy? Toyota is waving a green flag but underneath, theyre as cold and uncaring as the Big Three. At least Chevy's coming out with a plug-in hybrid. Toyota, do you even have that?

For those who keep talking about the high MPG of vehicles in Europe, keep in mind their testing procedures are much easier (especially with the new 2008 EPA procedures) and that they use imperial gallons, rather than US gallons.

A BMW 550i auto in the UK gets...

18.2 mpg (urban)
39.2 mpg (extra-urban)
27.4 mpg (combined)

While the same car in the US gets...

15 mpg (city)
23 mpg (highway)
18 mpg (combined)

Here's the 7-passenger Ford S-MAX, that Paul and others were referring to...

2.0TDCi 130 PS (128hp) automatic
0-60 mph: 11.4 sec
28.5 mpg (urban)
48.7 mpg (extra-urban)
38.7 mpg (combined)

That translates to US EPA 19 city, 28 highway, 22 MPG combined, and it won't even meet Tier 2 Bin 5 US emissions standards.

Currently only 2 cars exist that meet the 35 (combined) mpg AVERAGE Senate 2020 CAFE proposal. The technology and infrastructure necessary for that to happen just doesn't exist.

GM should offer a two-mode hybrid version of Hummer H3 which should boost the 18 mpg highway figure into the low-20s. With a possible oil price of 100/barrel or even 200/barrel, it helps to squeeze up every drop of efficiency. Besides, a hybrid will definitely brush up Hummer's image and make H3 a best seller. That vehicle is simply so cool.

It's so funny that I just ran across this post as I just wrote a rebuttal on the same Friedman article last week for English! A couple of my arguments were similar to the post by Mr. Wilkinson.

BTW, Austin, I'm pretty sure GM has made a number of innovations, even in fuel economy. Did you know that the 6.2 Liter V-8 in the Corvette gets 16/26 for its gas mileage? If you start looking up numbers for other V-8s that are smaller and have less power, you will see that the Corvette's are a lot better.