Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Bush, GOPers, Dems and Big Three Show No Leadership on Fuel Economy

Posted by: David Kiley on March 26, 2007

I dropped into the White House today for the photo opp session with President Bush, GM CEO Rick Wagoner, Ford CEO Alan Mulally and Chrysler CEO Tom Lasorda.

The four, plus the Transportation and Energy Secretaries, talked about how the Big Three were working to raise fuel efficiency in their vehicles through technology. GM had a Flex-Fuel Impala on hand. Ford had a plug-in hybrid that has a battery and a fuel cell. And Chrysler brought a bio-diesel Grand Cherokee.

It was all nonsense. The common theme in all the rhetoric, no matter who was talking, was “less dependency on foreign oil.”

All three CEOs know, and have said privately, that the easiest, best way to get there is to levy a gasoline tax, and simultaneously pass an off-setting income tax break to middle and low income consumers to make it revenue neutral to them. In fact, according to one well placed source with knowledge of the discussion between the CEOs and the President today, the six attendees addressed this issue as the fastest, smartest way to arrive at dramatic increases in fuel economy. The President, however, immediately dismissed it on political grounds. Got that. Political grounds.

It’s the right idea, but it can’t be sold to the public. That was the answer from on high.

Former Senator Bill Bradley points out in his new book that we have all the technology we need to get America to an average fuel economy of over 40 mpg. Europe has already achieved it. And the last time I checked, GM, Chrysler and Ford sell vehicles in Europe. IN other words, we already possess the technology to dramatically increase our national fuel economy.

I thought it was ironic that VP Cheney was present at the outdoor photo opp. Remember it was Cheney, as well as former Defense Secretary Don Rumsfeld, who referred to “Old Europe” when France didn’t join the Coalition of Willing to fight in Iraq. “Old Europe” has an average fuel economy above 40 mpg.

The problem, the pols say, is two fold. Even if they pass an income tax cut that offsets the gas tax for low and middle-income people, the “optics” or the “headline” of a $1.00 a gallon gas tax would not be accepted by the public. It wouldn’t be understood, say the pols. But worse for the GOP, the states where the pickup truck and SUV culture is strongest are red states.

But don’t get the idea this is just a GOP problem. Democratic Congressman John Dingell, whose district includes The Big Three and the heart of the United Auto Workers, and who chairs the committee that will initiate any legislation about fuel economy, isn’t proposing the gas tax/tax cut solution either. Why? The UAW continues to ride a hobby-horse that they will lose tends of thousands more jobs if we move to hike the fuel economy of our fleet to European standards. Profit margins are lower on cars than they are on trucks. And by necessity, Big Three automakers would have to build more cars in low-wage places like Mexico and South America.

Something tell me that legislation would be more likely if the chairman of the commitee was from Rhode Island or New Jersey rather than Michigan.

It is so cynical to even think that the American people wouldn’t move to change their vehicle purchases if someone took the lead to change the national conversation about energy; not just schedule photo opps.

There remains a shocking, demoralizing lack of leadership on this issue. As one fatigued White House press pool photographer quipped today…”If they showed us a car that ran on bullsh*t, the cars in this town would never have to stop for gas at a filling station.”

TrackBack URL for this entry:

Reader Comments


March 27, 2007 08:58 AM

Europe's diesel penetration is about 50 percent. The U.S. is under 3 percent. The reason we don't have more diesels is that myopic EPA regs mean that particulate matter and NOx standards are expensive to meet. People that say, "No one will want diesels here" are wrong. In the early 1990s, Europeans had memories of slow, smokey, generally crappy diesels just like us. But in about ten years, an auto market close to our size is 50 percent diesel and as high as 70 percent in some countries (Austria, et al.) Diesels cut CO2 emissions and consumption by about 1/3. The BMW 330d I drove yesterday does 0-60 in 6.7 seconds and tops out at 155 mph, all while achieving Prius-like fuel economy at 75 mpg. Performance and prestige is not the issue; policy is.

Brendan Moore

March 27, 2007 12:57 PM

Let’s put aside the surreal theatre of this photo-op session and talk about the subject that was avoided yesterday morning; that’s right, raising fuel economy of the cars that will be for sale in the next few years. The plan by Bush (and others, most notably the Democratic House members) to raise the CAFE requirements is a cruel joke.

But the joke’s on us. CAFE is a completely bankrupt premise. It serves now as an illusion that Bush has put before the American people, an illusion that makes the public believe that the federal government is doing something about the United States using less oil, and therefore, gasoline.

It is simply the federal government trying to foist responsibilty for reducing gasoline consumption on to the automakers. Hey, everybody, look over there, don’t look at us!

Only a tax on gasoline will reduce gasoline consumption, and only the federal government has the power to enact such a tax. They just don’t have the political will to do it.

So, instead, we get this completely meaningless diversion of CAFE, and almost just as meaningless talk about flex-fuel. Anything to distract the American public away from the real solution that no wants to talk about since it is currently political self-immolation.

Isn’t President Bush fond of saying that he doesn’t govern by public opinion, he does what’s right for America? Well, here’s his big moment - will he be found wanting?

B Moore -

Post a comment



Want the straight scoop on the auto industry? Detroit bureau chief David Welch , Dexter Roberts and Ian Rowley bring daily scoop, keen observations and provocative perspective on the auto business from around the globe. Read their take on such weighty issues as Detroit’s attempt at a comeback, Toyota’s quest for dominance and the search for an efficient car.

BW Mall - Sponsored Links

Buy a link now!