Auto industry CAFE whining falling on deaf ears

General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F), DaimlerChrysler AG (NYSE: DCX) and the United Auto Workers just can't stop complaining about new, tougher fuel-efficiency standards that the U.S. Congress likely will pass.

The companies and union are taking their case to Capital Hill today at a private luncheon with leaders of the U.S. Senate to convince them to reconsider an overhaul of Corporate Average Fuel Efficiency (CAFE) standards, according to the Associated Press.

Let's hope that Senate Majority Leader Harry Reed has the guts to tell them to pound sand. The public is fed up with high gas prices and the growing problem caused by global warming. Even GM Chief Executive Rick Wagoner has acknowleged this reality, though the AP quotes him cryptically saying "let's make sure that we also fix the real problems while we're doing that."

As the AP points out, automakers have been fighting efforts to raise fuel economy standards for the past two decades. Current rules require that a manufacturer's fleet of passenger cars gets an average of 27.5 miles per gallon for any given model year and that its SUVS, pickup trucks and vans get an average of 22.2 miles per gallon.

Given the huge environmental problems caused by global warming, environmentalists have argued that these standards are no longer strict enough.

Legislation pending in the Senate would raise CAFE to a fleet average of 35 miles per gallon for a manufacturer's cars and trucks by 2020 and ratchet up the benchmarks by 4% between 2020 and 2030, the AP said. Not surprisingly, Michigan's congressional delegation is trying to water down the proposal by maintaining separate standards for cars and passenger trucks.

The benefits for raising CAFE standards even by a modest amount would be significant. The American Council for an Energy-Efficient Economy estimates that raising standards by 5% annually until 2012 and 3% after that would save 1.5 million barrels of oil per day by 2010 and 4.7 million by 2020.

Democratic presidential candidate Barack Obama recently shocked the auto industry in a speech before the Economic Club of Detroit by saying that the Big 3 automakers badly miscalculated the needs for fuel-efficient vehicles and must change. Moreover, they are losing out on sales to Japanese counterparts.

Toyota Motor Corp's (NYSE: TM) Prius hybrid model is a huge hit and Honda Motor Co. (NYSE: HMC), whose Accord hybrid was a bust, is promising a new model to in 2009.

It's time for Detroit to quit bellyaching.

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