Location: Pantego, Texas, United States

Saturday, May 09, 2009

On TV I keep hearing that the problem that the Detroit auto makers (Ford, GM, and Chrysler) had was that they did not produce the small, fuel efficient cars that people wanted to buy, while the foreign label makers did. I wonder about that. The statistics I see do not appear to bear that out. The problem, from what I have read in financial magazines is that the Detroit auto makers couldn't make a profit on small cars, but instead made their profits entirely on pickups and SUVs. Recently when I walk or ride my bicycle around the older, middle class neighborhood where I live, I have been surveying the automobiles in the driveways. I don't see many small cars. Mostly the people drive SUVs. My inexact survey indicates that over half of these large vehicles are from foreign car companies. I have stopped and talked to some of the owners of the foreign made SUVs, and while the owners like them, they say the cars don't get particularly good gas mileage; no better than the Mercury and Chevy SUVs my wife has recently owned. I think there is something wrong with the narrative about what is wrong with American car makers that I hear from the liberal commentators on TV. I have severe doubts that people will want buy the small "energy efficient" cars that the Obama Motor Works (formerly GM) is talking about producing. Since people won't want to buy them, Obama will be have to coerce people to buy them to keep his Motor Works in operation. Some options that I expect are subsidies to buy his new cars, banning older cars from the highway, and forcing up the price of gasoline to the $8 per gallon that Stephen Chu talked about.


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