Bailing out the Detroit automakers

[fourteenandoh]

i think you guys are talking about the CAFE laws. the big 3 have some good cars they sell in europe that they are not allowed to sell here.

[exhawg]

Originally Posted by fourteenandoh

i think you guys are talking about the CAFE laws. the big 3 have some good cars they sell in europe that they are not allowed to sell here.

In that case it would be good if we could work out a global standard for cars so they can be sold anywhere. You would think automakers would push for something like this.

[generaladm]

Okay, here's what I've been able to find so far. Tables for emission standards in the EU and US. A little confusing to compare because they are shown differently, but I believe they show that EU standards are stricter than US.

European emission standards for passenger cars (Category M1*), g/km
Tier Date CO HC NOx HC+NOx PM Diesel EM1 January 1989 2.72 (3.16) - - 0.97 (1.13) 0.14 (0.18) Euro 2, IDI January 1993 1.0 - - 0.7 0.08 Euro 2, DI January 1993 1.0 - - 0.9 0.10 Euro 3 December 1997 0.64 - 0.50 0.56 0.05 Euro 4 January 2003 0.50 - 0.25 0.30 0.025 Euro 5 (future) September 2009 0.50 - 0.18 0.23 0.005 Euro 6 (future) September 2014 0.50 - 0.08 0.17 0.005 Petrol (Gasoline) EM1 January 1989 2.72 (3.16) - - 0.97 (1.13) - Euro 2 January 1993 2.2 - - 0.5 - Euro 3 January 1997 2.30 0.20 0.15 - - Euro 4 January 2003 1.0 0.10 0.08 - - Euro 5 (future) September 2009 1.0 0.10 0.06 - 0.005** Euro 6 (future) September 2014 1.0 0.10 0.06 - 0.005** * Before Euro 5, passenger vehicles > 2500 kg were type approved as light commercial vehicle N1 - I
** Applies only to vehicles with direct injection engines European emission standards - Wikipedia, the free encyclopedia



Tier 2 Emission Standards, FTP 75, g/mi (US emissions standards phased in beginning 2004, to be compliant to bins 9,10,11, by 2009)
Bin#Intermediate life (5 years / 50,000 mi)Full useful life NMOG*CONOxPMHCHONMOG*CONOx?PMHCHO Temporary Bins 11 MDPVc




0.2807.30.90.120.032 10a,b,d,f0.125 (0.160)3.4 (4.4)0.4-0.015 (0.018)0.156 (0.230)4.2 (6.4)0.60.080.018 (0.027) 9a,b,e,f0.075 (0.140)3.40.2-0.0150.090 (0.180)4.20.30.060.018 Permanent Bins 8b0.100 (0.125)3.40.14-0.0150.125 (0.156)4.20.200.020.018 70.0753.40.11-0.0150.0904.20.150.020.018 60.0753.40.08-0.0150.0904.20.100.010.018 50.0753.40.05-0.0150.0904.20.070.010.018 4-----0.0702.10.040.010.011 3-----0.0552.10.030.010.011 2-----0.0102.10.020.010.004 1-----0.0000.00.000.000.000 * for diesel fueled vehicle, NMOG (non-methane organic gases) means NMHC (non-methane hydrocarbons)
? average manufacturer fleet NOx standard is 0.07 g/mi for Tier 2 vehicles

a - Bin deleted at end of 2006 model year (2008 for HLDTs)
b - The higher temporary NMOG, CO and HCHO values apply only to HLDTs and MDPVs and expire after 2008
c - An additional temporary bin restricted to MDPVs, expires after model year 2008
d - Optional temporary NMOG standard of 0.195 g/mi (50,000) and 0.280 g/mi (full useful life) applies for qualifying LDT4s and MDPVs only
e - Optional temporary NMOG standard of 0.100 g/mi (50,000) and 0.130 g/mi (full useful life) applies for qualifying LDT2s only
f - 50,000 mile standard optional for diesels certified to bins 9 or 10 Emission Standards: USA: Cars and Light-Duty Trucks - Tier 2




California LEV II Emission Standards, Passenger Cars and LDVs < 8500 lbs, g/mi
Category50,000 miles/5 years120,000 miles/11 years NMOGCONOxPMHCHONMOGCONOxPMHCHO LEV0.0753.40.05-0.0150.0904.20.070.010.018 ULEV0.0401.70.05-0.0080.0552.10.070.010.011 SULEV-----0.0101.00.020.010.004 Emission Standards: USA: Cars and Light-Duty Trucks - California

As I said, it's not laid out very well. I'm only copying the passenger car tables, since that has the most effect on international sales. The two US tables are the Tier 2 EPA standards which were phased in starting in 2004, and must reach full compliance by 2009; the second US table is for CA only. The first table contains several "bins" representing marks that certain models must meet during the phase in period (see link for better explanation). But, even taking the stricter CA standards, the EU is much lower, nearly across the board (but for a .01 difference in NOx).

The criticism that I read regarding the disparity in efficiency and emissions standards argued that by refusing to adhere to the strictest global standards, the big 3 are effectively shrinking their base of possible consumers. Certainly, there are lots of US made cars sold overseas, but if the cost of modifying cars to meet EU standards is absorbed by the manufacturer, or passed on to the customer, it would certainly have an effect on sales and/or profit. If there is truth to that argument (which I am not asserting, at this point), that's just bad business. The technology is obviously there; if the execs are unwilling to invest in improvements that will lead to increased sales and profits, they are not doing their jobs. That obviously wouldn't be the only factor in the current troubles, but it may be an indicator of overall mismanagement. Like the mortgage crisis, I'm sure there are too many contributing circumstances to point the finger at just one group. Management, unions, lobbyists, government, consumers, etc. all contribute in some way. If there is to be a long term solution to this problem, everyone will need to make concessions and tough decisions for the greater good. I'm really not optimistic for that happening, but we'll see. Anyway, that's what I've found so far, I'll post more as I find it.

[fourteenandoh]

so you got me looking now. i think i've found the culprit that i have heard others alude to.

from wiki

"For the purposes of CAFE, a manufacturer's car output is divided into a domestic fleet (vehicles with more than 75 percent U.S., Canadian or post-the North American Free Trade Agreement (NAFTA) Mexican content) and a foreign fleet (everything else). Each of these fleets must separately meet the requirements. The two-fleet requirement was developed by the United Automobile Workers (UAW) as a means to ensure job creation in the US. The UAW successfully lobbied Congress to write this provision into the enabling legislation. The UAW continues to advocate this position.[18] The two fleet rule for light trucks was removed in 1996."


i have to read some more on this, but its obvious that the UAW has their hand in this.

[generaladm]

Hmm, it seems we're all comparing apples to oranges, when the question is really about lemons and limes. I just did some more research on CAFE standards, and it seems the "two fleet rule" has nothing to do with US cars sold overseas, but quite the opposite, it sets a requirement for the percentage of foreign made parts in US manufactured cars. The best explanation is, unfortunately, in PDF, so I'll summarize and add the link after this paragraph. In response to the 70's oil crisis, the US Gov enacted CAFE to regulate the fuel efficiency average of a manufacturer's line. UAW was concerned that since most foreign makers already produced high efficiency cars, the big 3 would import foreign cars and parts to sell as US made. That's where the "two fleet" comes in. For a car to be designated as "Made in the USA", it must contain at lest %75 parts made in the US, Canada, or Mexico (after NAFTA). I haven't found anything that says the two "fleets" are really different models, just made with parts from different sources. So, yes, UAW did push for the "two fleet rule", which was precipitated by the CAFE standard; but, no, it doesn't affect big 3 international sales, or require two designs for each model.

http://www.pewfuelefficiency.org/pdf...fleet-rule.pdf

The interesting thing is that when the two fleet rule was enacted, there were virtually no foreign plants in North America. Of course, it's much different now, and foreign companies are trying to nix it. Nissan has been granted an exemption.

P.S. Sorry that the tables on my previous post turned to [censored]. I've fixed the links so they can be seen in tact.

[fourteenandoh]

i read that a few minutes ago. it seems like they have these fuel efficient cars that are made outside of the US, but they aren't allowed to sell them in the US because they won't count toward lowering their CAFE score. so instead, to lower their CAFE score they make [censored]ty cheap cars that get good milage, but are poor quality and low margin. to make up for it, they put all their eggs into the SUV basket because they were high margin and that was the only way they could survive. now that the market for their SUVs is shot, all they are left with are crappy cars that no one wants. another example of unintended consequences of screwing with the market.

[BuckeyeMike80]

Originally Posted by sandgk

Quick - without looking it up, take a guess - how many workers from the Big 3 are in a job bank today?

Now, a follow-up question, how many of the Big 3 Japanese automakers have no equivalent program of their own?

Quick - without looking it up, which automakers are solvent and which ones are begging DC to save their asses AGAIN....

[fourteenandoh]

Job Banks

1476 at ford
1404 at GM
711 at Chrysler

the big 3 combined have spent 500mil to keep these emplyees idle (good work if you can get it!) while honda spent 550mil for a brand new factory in Indiana

[generaladm]

Originally Posted by fourteenandoh

Job Banks

1476 at ford
1404 at GM
711 at Chrysler

the big 3 combined have spent 500mil to keep these emplyees idle (good work if you can get it!) while honda spent 550mil for a brand new factory in Indiana

You cheated and looked that up, didn't you?

sandgk had an earlier post about job banks, and how the people in them are not actually paid to do nothing.

http://www.buckeyeplanet.com/forum/1336614-post13.html

[fourteenandoh]

Originally Posted by generaladm

You cheated and looked that up, didn't you?

sandgk had an earlier post about job banks, and how the people in them are not actually paid to do nothing.

http://www.buckeyeplanet.com/forum/1336614-post13.html

i didn't see sand's post until mike quoted it. i actually read about the job banks in a commentary yesterday that i still had sitting on my desk right in front of me.

[ORD_Buckeye]

While I'm personally against the auto industry bailout, it is interesting to note that Citigroup has already slopped up to the corporate welfare trough to the tune of twice the $25B that the entire auto industry is asking for in cash and about 15x that when one factors in their bad debt for which the US taxpayer is now on the hook.

[Bucky Katt]

Got a check from GM today. Wasted no time getting that [censored]er over to the bank.

Originally Posted by fourteenandoh

while honda spent 550mil for a brand new factory in Indiana

Thanks, Honda! The work on their new plant paid my X-mas bonus last year.

[Sdgobucks]

Originally Posted by ORD_Buckeye

While I'm personally against the auto industry bailout, it is interesting to note that Citigroup has already slopped up to the corporate welfare trough to the tune of twice the $25B that the entire auto industry is asking for in cash and about 15x that when one factors in their bad debt for which the US taxpayer is now on the hook.

Yep I hear you there. I don't like the bail outs at all, but if we are going to let slime balls like this guy keep going back for 2nds and 3rds, why not the automakers?

Remember all the fuss about the big three executives and their combined 5 million dollar pay? Well this douche bag makes over 200 Million a year, where was congress at then? Why didn't they ask him to work for $1 a year?

Vikram Pandit's payout from Citigroup: $216 million - International Herald Tribune

At first I was afraid of what would happen if we didn't have this bail out, but its got to the point with these banks that I don't even care any more. Let them die, there should be a few profitable wise ones left that can rise out of the rubble. I would rather save the big three than another [censored]ing bank.

[Steve19]

This argument is Economics 101. Cars or butter. I actually felt ill as I listened to the auto executives talking about their great managers and energy efficient cars. The VW Beetle was getting 30 miles to the gallon in the 1960s. So, where is this energy efficiency? Why did they kill a very successful electric car program?


Let us be very frank. This is a group of terrible executives who have avoided any of the social responsibilities they had -- all of which would have put them in an incredibly powerful competitive position today. It is an unsustainable industry that is paying for a generation of workers, now retired, who extracted expensive lifelong benefits that are not sustainable. Rather, provide a safety net for the workers and let them get out from under all this, even if it means Chapter 11 or whatever.

Sell off the fancy corporate jets, the big buildings, the hunting clubs and fancy corporate club memberships, and get them back to innovative transportation.

[shetuck]

Originally Posted by Steve19

This argument is Economics 101. Cars or butter. I actually felt ill as I listened to the auto executives talking about their great managers and energy efficient cars. The VW Beetle was getting 30 miles to the gallon in the 1960s. So, where is this energy efficiency? Why did they kill a very successful electric car program?

Let us be very frank. This is a group of terrible executives who have avoided any of the social responsibilities they had -- all of which would have put them in an incredibly powerful competitive position today. It is an unsustainable industry that is paying for a generation of workers, now retired, who extracted expensive lifelong benefits that are not sustainable. Rather, provide a safety net for the workers and let them get out from under all this, even if it means Chapter 11 or whatever.

Sell off the fancy corporate jets, the big buildings, the hunting clubs and fancy corporate club memberships, and get them back to innovative transportation.

Well... true, for the most part... but Alfred Sloan and and Henry Ford have been extinct species in Detroit for at least three generations.

Where's Michael Moore to update "Roger and Me" when this country needs him most? [sarcasm off]

Re the beetle and high MPG... soap box derby cars also get terrific fuel efficiency. Start running them around on our highways at 75+ MPH and the cost-benefit falls off the other side of the roof. That and we're still not sure how to install ABS, tire pressure sensors, a half a dozen O2 sensors, air bags, roll bars, CHIMSL lights (center-high mounted stop lights), water-based paint, 3/5/7 year warranties, long-life coolant, and all those other quality-of-life features.

Now if we could only dole out the same measure of scrutiny to the so-called financial "services" companies. AIG called and they want to know if they can use the auto execs' private jets to go on their next off-site team-building workshop in Monaco. We seem to have more heart-burn over the $15 billion loan to the big three than the $1 trillion that we've put into the hands of a group of companies and exec that have basically committed (and continue to commit) highway robbery.

[/rant]

I say let the big three sink. It'll be a learning opportunity when we're finally forced to transition industrial workers to the knowledge economy once-and-for-all.