Car Guy

Government Could Save Detroit

It's just a matter of lifting a lot of regulatory deadweight.

By 9.3.09

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The Great Clunker Con proved one thing, at least: New cars are too expensive for a growing number of consumers. But chop $4,500 or so off the price and all of a sudden buyers are a lot more interested.

The problem is the interest (and sales) could only last as long as the payola continued to flow. Taking money from Taxpayer A to help Taxpayer B get behind the wheel of a brand-new car is ultimately just another government transfer payment scheme.

Now that the handouts are finished with, sales will almost certainly recede to where they were.

Still, there's a better option to consider: Why not just do the obvious and make the cars cheaper permanently -- but without any government financial flim-flam?

It could be done, easily. And it might just save the car industry. Perhaps even the economy itself.

For openers, the federal government needs to get out of the car designing business. Lawyer politicians like Barack Obama and D.C. bureaucrats do not comprehend even Lemonade Stand real-world economics. If it were up to them, instead of five cents per paper cupful you'd have $4 filtered water in a glass, scrupulously maintained at a carefully monitored 38 degrees Fahrenheit and sold only by appropriately trained and attired food service workers making an approved wage -- with approved benefits.

The lemonade might taste great -- but it would be unaffordable.

And so it is with today's new cars. No question, they are sturdier and more crashworthy than their counterparts of the past -- to a great extent because of government mandates governing everything from how strong bumpers have to be to the number of air bags your next new car must be fitted with.

As a result of all this, new cars are also much heavier, more complicated -- and expensive -- than the cars of the past.

But which is better: A car that performs well in a 30 mph offset barrier crash but is also beyond your means? Or a car that's maybe not quite so sturdy but which you can still afford to buy?

Like it or not, that's the bottom line choice here. Just as we can't all drive V-8 Cadillacs, neither can average people afford to buy the ever-increasing roster of safety equipment that Washington regulators think they need -- and should be forced to purchase, in an ever-increasing spiral of add-on expense.

This creates all manner of absurd distortions. For example, the car companies have had to go to ridiculous lengths -- using completely unnecessary technology -- to (barely) achieve the same fuel economy in a modern gas-electric hybrid car that was possible in a simpler, non-hybrid car 20 or 30 years ago ... at two or three times the price.

For instance: A 2010 Toyota Prius hybrid gets about the same real-world mileage as a late 1970s VW Rabbit diesel or '80s-era Plymouth Champ. But the Prius costs several times what those cars cost because it is vastly more complicated. Get rid of the weight and expense-padding "safety" mandates and the car companies could stamp out legions of simple, lightweight 50 mpg (or better) economy compacts that could be sold for less than $10,000 brand new.

After all, 40 mpg cars were common 25 years ago -- before the government's rules added several hundred pounds of deadweight to each new vehicle. Nix the rules that add the weight -- and with the benefit of modern engine technology, such as direct injection and Continuously Variable (CVT) transmissions -- it should be easy to build a 60 mpg economy compact without having to resort to elaborate hybrid vehicle technology.

With diesel power, 70-80 mpg ought to be possible.

In fact, VW sells a compact diesel model in Europe that is capable of close to that figure -- but we don't get it here, thanks to Uncle Sam.

The little vee-dub can't pass the government's safety standards.

As the opening to the "Six Million Dollar Man" put it, We have the technology. What we lack -- or rather, what Detroit lacks -- is the freedom to develop it and offer it for sale to the public.

If only the car companies were allowed to build what the market needs rather than what the government wants, the situation would fix itself, without massive government bailouts -- or Clunker Cons.

GM CEO Fritz Henderson and the rest of Detroit's honchos need to make this case before the public -- instead of clapping like trained seals at Obama press conferences.

Who knows -- they might actually sell some cars.

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About the Author

Eric Peters is an automotive columnist and author of Automotive Atrocities: The Cars You Love to Hate (Motor Books International) and a new book, Road Hogs.