Scrapping the Auto Industry

Obama mandates threaten thousands of jobs and to decrease the living standard for countless Americans.

Higher fuel-economy standards for vehicles, sought by the environment-obsessed Obama administration, would add as much as $10,000 to the cost of a future car, could slash auto sales by 5.5 million a year and eliminate more than 260,000 jobs. Those are conclusions of the Michigan Center for Automotive Research in a major study released this June.

Congress in 1975 first set corporate average fuel economy (CAFÉ) regulations in the wake of the Arab Oil embargo to reduce oil and gasoline consumption. Car manufacturers were required to have a low average miles-per-gallon for their future fleets of autos. In more recent years, the reduction of fuel has been related to so-called green house gases, such as carbon dioxide, and to reinforce the myth of global warming.

Now Obama wants car-makers to roughly double the fuel economy standard to 56.2 miles per gallon by 2025. Some environmental organizations wanted even a 62-mpg standard. The administration ruled a 35.5 standard by 2016. That’s up from 27 mpg now.

New vehicle sales are expected to average 15.2 million units annually between now and 2025, the center said, considering modest growth in GDP, scrapage rate (the average car is kept for 10 years) and new car prices.

“However, dramatic changes, not determined by market forces,” could significantly alter growth, age of cars and sales, the center pointed out. “This could result in the loss of hundreds of thousand of manufacturing jobs and reduce the standard of living and personal mobility of millions of U.S. consumers” because of “mandates by the federal government to improve fuel economy...beyond what is required by the market."

The cost and effectiveness estimates for fuel reduction technology relied on a study by the National Research Council (NRC), reviewed by 13 outside sources and release in June. The NRC analysis attempted to identify all significant economic technologies for light-duty vehicles by 2025. Over 40 were identified. “Fuel cell vehicles are not expected to be significant in volume.” Both battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) would have “limited deployment,” the NRC said.

Expensive government mandates have made the U.S. motor fleet “the oldest among developed countries,” the study said.

As early as May 19, 2009, President Obama overturned the Energy Independence and Security Act of 2007. He high-handedly raised the new fuel-economy standard four years sooner than it was to go into effect. Then on May 21, 2010, the “can’t-wait” President ordered his Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) to immediately plan new fuel-economy standards—in truth, levels of greenhouse gas emissions for 2017-2025. This brash action was taken without explicit calculations of the potential impacts on U.S. motor vehicle demand, production or employment, the Center for Automotive Research noted.

Long-term growth in auto sales is largely determined by increase in people’s incomes and growth in the adult population. The market for car sales has been “saturated since the early 1970s. The U.S. driving age population reached 240 million in 2009," the center said. Since the late ‘70s, the average household has two cars. By 2025, the Center estimates the vehicles “should level out at 2.07 vehicles per household.

So, are electric cars our automotive future? People who race out to buy an electric car, such as the heavily federally subsidized Chevy Volt, thinking it’s the “green” thing to do, are deluded into believing it helps the environment. Wrong.

That new Volt typically is recharged by electricity from a coal-burning power plant. And because the Environmental Protection Agency has convinced naive Americans that carbon dioxide (CO2) is "destroying the planet," EPA is threatening to close many of their coal-fired plants, driving up the price of electricity.

A new British study, reported June 10 by Back to Basics, says electric cars could give off as high emissions over their lifetimes as gasoline-fueled cars because of the energy consumed in making their batteries. Indeed, old chap, you’d have to drive 129,000 kilometers before any savings in CO2, a Brit might tell you. Plug-ins, it seems, leave their own “carbon footprint.”

One of many facts Obama apparently doesn’t know about the shaky outlook for electric cars is that half of the households of people who own cars have no garage. Not many folks would want to plug a car all night into their living room socket.

Stricter standards push auto makers to build smaller, lighter cars. Recently the Insurance Institute for Highway Safety released its study of vehicle death rates. Big, heavy cars are safer, with a death rate less than a third that off small cars.

So paying thousands more for an electric car -- even with government subsidy -- could make minimal positive impact on the environment, while added more woe to our jobless economy. Yet another not-so-wise move is being promoted by the White House.