Sunday, April 15, 2007

Has Bob Lutz lost his marbles...or not?

Bob Lutz is supposed to be General Motor's "car guru." He's an ex-Marine and worked for both Chrysler and Ford. Now he sounds like a 75-year-old crybaby (or so I thought at first). This is his sob story, as related by Jim Mateja of the Chicago Tribune:

GM puts brake on rear-drive vehicles

Published April 10, 2007

General Motors has put a hold on future rear-wheel-drive vehicles.

"We've pushed the pause button. It's no longer full speed ahead," Vice Chairman Bob Lutz revealed in an interview.

The RWD cars, you see, would be larger and heavier than front-wheel-drive cars or are high-performance models.

So it comes down to the matter of fuel economy. Or as Lutz says: "We don't know how to get 30 percent better mileage from" RWD cars.

That 30 percent bogey arises from a proposal by the Bush administration to raise corporate average fuel economy (CAFE) standards by 4 percent a year so cars would have to average 34 mpg by 2017, up from 27.5 mpg today. On top of that, the Supreme Court ruled last week that the Environmental Protection Agency can regulate carbon dioxide expelled by cars, a gas that contributes to global warming. The EPA doesn't do so now.

"We'll decide on our rear-drive cars when the government decides on CO2 levels and CAFE regulations," Lutz said, adding that limiting CO2 would increase mileage, too.

"Carbon dioxide is a natural byproduct of burning gas and directly proportional to the amount of fuel burned. If we legislate CO2 from cars, why not legislate we take one less breath per minute since humans release capricious amounts of CO2 each time they exhale?" offered a testy Lutz. [emphasis added by Mike]

Lutz also points out that higher mileage will come at a price, with the proposal to raise CAFE certain to increase costs by as much as $5,000, which will be added to a car's sticker, an amount most consumers won't be willing to pay. There are no hard numbers for how much CAFE compliance adds to the sticker now.

"Rather than buy new, people would hang onto their old cars. We could eat the $5,000, but that would put us out of business."

Lutz also objects to the talk that carmakers can easily raise mileage with a very low investment.

"Academics assure us that for $200 we can get 30 percent better mileage. If anyone can figure out how to do that for $200 -- or even for $1,000 -- I want them in my office today. Show me how to do it and we'll adopt it," he said. "If I could increase mileage by 30 percent for $200, why wouldn't I? What's my motivation not to when a gas-electric hybrid gets 27 percent better mileage and I hope someday to get the cost down to $9,000?"

I had originally thought this was just a silly rant from Lutz and that maybe he should be given his walking papers. After all, he sounded like Hank (the Deuce) Ford and Lee Iacocca crying on Nixon's shoulder about safety standards and emissions controls threatening to put Ford out of business back in the 1970s.

But then it hit me. Lutz is putting on an act, hoping to get sympathy from the pro-business Bush administration. Surely, George Bush wouldn’t want to be known for putting the final nail in GM’s coffin.

The irony is that Bush isn’t even directly proposing an increase in fuel economy standards to 34 mpg in 10 years. Bush simply set a goal of America using
8.5 billion fewer gallons of gasoline annually by 2017. Improving average fuel economy is only one way to achieve this goal, but using alternative fuels like ethanol, biodiesel, and battery electric power are others. Or we could drive less and use public transportation more. So it’s just a charade on Lutz’s part, but a shrewd one.

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