Politics and Cars

Yesterday, President Obama announced that he will seek (or was it mandate -- does he need Congress to approve?) to require higher overall MPGs from vehicle manufacturers.  I believe this was also combined with lower emissions requirements as well.  Wonderful goals, right?  We all want to get higher miles per gallon and we want to emit as little pollution as possible.  So, why am I against this?

Three reasons.  One is that the government has just taken over two U.S. auto manufacturers and is now saddling them with even more requirements that will further reduce sales, because it forces the price to go up.  In one sense, it makes the most sense for the Democrats running the U.S. government to just run the car companies because they set up so many of the rules and regulations for how to build a car that they might as well just build the cars and trucks themselves.  Can you imagine being an entrepreneur today who wanted to start up a new car company?  No, the smart creative types are getting involved with computers and biotechnology.  

Remember how the Democrats chafed at the restrictions placed on embryonic stem cell research by Presidents Clinton and G.W. Bush?  They argued that these restrictions hindered creativity and progress in researching cures or treatments for many ailments.  Well, all the restrictions placed on the car companies over the last 40 years are what has killed the American automobile industry.  

The second reason I oppose this is similar in that the government has taken another step in killing the fun out of cars.  Thinking back to the glory days of GM and hot rods and Pontiac GTOs and TransAms or Chevy Camaros or Ford Mustangs.  Cars were fun! Now what do we have?  Boring cars like the Toyota Camry or the Honda Accord.  

Safety, fuel economy, and emissions regulations have boosted the price of cars to excessive levels.  $20,000 is probably just a starting point for a new car.  So, with prices that high, how many cars and trucks will one person buy in a lifetime?  Not as many, that's for sure.

A third point to consider is that there are inevitable safety tradeoffs when we raise the fuel economy standards as people are forced into smaller cars which are proven less safe than larger cars when involved in a crash.  So, to save ourselves from the mythical threat of Global Warming, we end up causing more real deaths as people are driving smaller cars.

Chrysler Axes Its Dealers

Earlier, I discussed the Chrysler bankruptcy.  Yesterday, one of the results of the bankruptcy was announced.  Chrysler would sever its relationships with one quarter of its franchises.  Nearly 1000 dealerships will be shut down.  This is something that would be very difficult to do if not for the filing of bankruptcy.  Chrysler believes that they have too many dealerships.  But from what I understand, the dealerships are not a cost to Chrysler.  What they really want to do -- long term --- is reduce the competition that now exists when there are so many dealerships for the same make of automobile.  Which means higher prices.  The reality is that the margin for most dealers is very slim on the sale of new cars.  They really depend on repairs and used cars to make money.  But without the Dealership imprimatur, most of these businesses will probably go out of business.

We have been Dodge customers for many years.  Although we have only purchased one vehicle from a new car dealer, we were continually shopping and looking at cars for much of the last 15 years.  We spent a lot of time stopping in at Chrysler/Dodge dealerships in the Washington area.  A lot of those dealers will no longer be associated with Dodge.  

As I stated in my earlier posting, I have a real hard time envisioning us buying a new Dodge in the future.  And if we, loyal customers, cannot be counted on, what future does this company really have?  The cutting of dealerships may or may not help the bottom line, but when I have to go farther to get my car serviced and have to compete with more customers to get parts or to have my car serviced, I am sure that I will not be a happy camper.

Sadly, I predict that, like Circuit City last year, these bankruptcy measures have only begun the process of the eventual liquidation of the Chrysler company.  It would take an incredibly creative and talented individual along the likes of a Steve Jobs or a Lee Iacocca to remake this into a successful company.   And with the government and unions so heavily involved in all automobile manufacturing, but especially GM and Chrysler these days, I just cannot see anybody ever having enough freedom to run this car company successfully.