Toyota Joins Lobby Against New CAFE Regs

by Robert Farago

July 30th, 2007 1:06 PM

toyota joins lobby against new cafe regs

"It's deeply disappointing that Toyota has joined in the lie-and-threaten game," says Dan Becker, director of the Sierra Club's global-warming program. Speaking to Automotive News [AN, sub], Mr. Becker is referring to Toyota's decision to join The Big 2.8 in lobbying Washington to throttle back on plans for higher Corporate Average Fuel Economy (CAFE) standards. The effort is sure to tarnish the transplant's green credentials and stoke the fires of domestic partisans, but it makes perfect sense. As AN points out, Toyota's combined car-truck fleet peaked at 26 mpg in 1983, and ToMoCo is enjoying full-size profits generated by its full-size SUV's and pickups. The real story here is Toyota's 'tude towards the Detroit. Apparently, they want to compete "relentlessly, but not ruthlessly." "We don't want to see our competitors in any worse financial shape," claims Josephine Cooper, Toyota's group vice president for government and industry affairs. Methinks they will.

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Pch101 on Jul 31, 2007
Regulation would not have forced the cultural changes necessary to produce attractive, high-quality fuel-efficient vehicles. It may not have clinched it, but it could have increased their odds of success. The lack of an effective law made it easy for the Big 3 to effectively ignore the small car market, a failure which has contributed to their long-term demise. The default move in Detroit was to focus on gas guzzlers based on the argument that the large cars provided better margins. Had they been forced to increase their small car sales, they may have actually done a better job of it, as they could not have resorted to selling other vehicles and surrendering that market to rivals. These companies have been so badly managed for so long that they would have benefited from some sort of force to get them to change. Unfortunately, there was never any sort of stockholder revolt to force a change, and the erosion has been so gradual that they could deny that it was happening. An effective law may have helped to shove them in directions that they would otherwise have rejected. Toyota is fortunate that the law was weak, as a weak Detroit helps its bottom line.

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Geeber on Jul 31, 2007

Sorry, can't buy that argument, anymore than I can accept arguments that stopping "currency manipulation by the Japanese" or shutting down Consumer Reports will help Detroit. CAFE, when originally implemented, did have teeth and forced serious changes in Detroit's model lineup. The K-Cars and X-cars were a direct response to CAFE. Henry Ford II only approved the original Escort for North America because of CAFE standards (as recorded in David Halberstam's excellent book, The Reckoning.) CAFE forced huge changes in vehicle design. GM and Ford had drastically redesigned their entire passenger car lineup by 1981 (except for the Corvette and Camaro/Firebird). By 1984, Chrysler had killed off every rear-wheel-drive car except the Chrysler Fifth Avenue, Dodge Diplomat and Plymouth Fury. CAFE did have teeth when it was originally implemented. All the new-front-wheel-drive cars were initially terrible products (although Ford did improve the Escort by the late 1980s to an acceptable small car entry). And no knowledgeable car enthusiast (or mechanic, for that matter) considers a 1981 vehicle to be superior to its 1971 counterpart. Until the recent run-up in gas prices, there was no move to tighten CAFE because customers (i.e., voters) did not want it. Everytime someone urged a tougher CAFE standards, I would smile and think, "I guess they want it scrapped." Always reminded me of those who demand that Pennsylvania's 65 mph speed limit on limited access highways be enforced to the letter. My response - "I guess you want it raised, because the only reason it exists is that police give drivers a 10-mph leeway, and if you take that away, people will demand that it be raised to allow them to drive 75 mph again." Honda succeeds because it is a well-run company with a dedication to engineering excellence. Toyota succeeds because it is a well-run compmany with a dedication to quality and putting the customer first. Ford and GM have foundered because they are run by bean counters with very little feel for the product, and, in many cases, display contempt for their customers. Unless CAFE removes (at a minimum) the top three layers of management at those companies, it will not change anything. And from what I've seen, stockholders aren't going to make any connection between tougher CAFE standards and the need to force changes in management. Alan Mullaly is trying to force cultural change at Ford, and his hiring by Bill Ford had nothing to do with CAFE standards. For all of the GM bashing on this site, GM HAS made many changes in the way it runs factories and develops new vehicles (many of GM's problems stem from too many vehicles sold through too many divisions and a culture that thinks it can establish a market position for a division by having Bob Lutz say so). These changes were occurring before any movement to increase CAFE standards.

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Pch101 on Jul 31, 2007
Honda succeeds because it is a well-run company with a dedication to engineering excellence. Toyota succeeds because it is a well-run commany with a dedication to quality and putting the customer first. Ford and GM have foundered because they are run by bean counters with very little feel for the product, and, in many cases, display contempt for their customers. I generally agree with that (although I do differ with any implications that one must be an engineer or "car guy" to be an effective manager. If anything, engineers are often among the worst managers, but I digress...) My point is that the truck- and large car-heavy product mix allowed their problems to fester because the higher margins helped the Big 3 managers to conceal their underlying systemic problems. If they had been forced to sell more small cars, they may have been forced to sell better small cars, as they would have had no choice but to compete on that turf. A weak CAFE allowed them instead to focus on the gas guzzlers and get away with it, which has left them utterly unprepared to address their current reality.

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Martin Albright on Aug 01, 2007
What if we got incentives and tax breaks for buying fuel efficient instead? Isn't saving money on gas enough of an incentive?

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