Abuse them, then quote them
April 27, 2009
After having joined the chorus lambasting GM for making cars ‘no one wants to buy’, Friedman this week quotes Bob Lutz to make his point that we can’t have green products without a price on carbon. Oh, the irony:
Bob Lutz, a vice chairman at General Motors, offers a useful example of why price matters. When Congress demands that Detroit make smaller, lighter, better mileage vehicles, but then refuses to put a higher price on carbon — like with a gasoline tax — so more consumers will want to buy these smaller cars, said Lutz, it is the equivalent of ordering all American shirtmakers to make only size smalls while never asking the American people to go on a diet. You’re not going to sell a lot of size smalls.
It is the ultimate injustice that we deride our auto industry for not making fuel-eficient cars, when it is our government’s failure to have a consistent, long-term energy policy that creates havoc.
Detroit is stuck redesigning and retooling for the fickle U.S. consumer, while Toyota and BMW can count on consistently high gas prices at home, which creates consistent demand for their hybrids, diesels and turbos, whether oil is at $40 or $140 a gallon.
And keep in mind that it takes 3-4 years and hundreds of millions to bring a new model to market.