Monday, January 26, 2009

Obama Trying To Sink Auto Industry

Making things is magic and changing the way things are made doesn't cost much. At least according to Mr. Obama who wants states to be in the Federal regulation business when it comes to automobiles.

President Obama will direct federal regulators on Monday to move swiftly on an application by California and 13 other states to set strict automobile emission and fuel efficiency standards, two administration officials said Sunday.

The directive makes good on an Obama campaign pledge and signifies a sharp reversal of Bush administration policy. Granting California and the other states the right to regulate tailpipe emissions would be one of the most emphatic actions Mr. Obama could take to quickly put his stamp on environmental policy.

Mr. Obama’s presidential memorandum will order the Environmental Protection Agency to reconsider the Bush administration’s past rejection of the California application. While it stops short of flatly ordering the Bush decision reversed, the agency’s regulators are now widely expected to do so after completing a formal review process.

Once they act, automobile manufacturers will quickly have to retool to begin producing and selling cars and trucks that get higher mileage than the national standard, and on a faster phase-in schedule. The auto companies have lobbied hard against the regulations and challenged them in court.
The auto companies are already reeling from the bad economy and now they will be forced to re-tool their whole business. Quickly. And why does he think American auto companies are in trouble? Not enough cars of tomorrow. Seriously. It is not the unions. It is not the management. It is not quality problems. It is a lack of futuristic thinking.
The first memorandum ordered the Transportation Department to work out rules for automakers to improve fuel economy. It calls for the department to notify automakers by March 2009 to increase their fuel efficiency for 2011 model year cars and trucks.
The design cycle for a modified production vehicle is three to four years depending on the extent of the modifications. These would be vehicles that could be built on current production lines with existing tooling and includes a shakedown period to test the new designs and get the bugs out. Now consider that the 2011 model year goes on sale in late 2010. So by government fiat he is going to get a 3 to 4 year process compressed into 18 months. The man is a miracle worker. Ah. But that is not the worst of it. If the mandates require a major redesign it can take about 5 to 6 years to get the logistics in place. Here are the general steps:

New design
Place Orders
Design new factories
Build Factory Eqpt
Negotiate work rules with unions (Detroit)
Train workers
Run Pre-Production Prototypes
Debug factories
Modify factories

And he can reduce a process that takes from 3 to 6 years into 18 months by fiat? The man is a genius. Let us consider WW2 production. The rule was that in the first year (if the design was ready to go) 1 to 10 units. In the second year hundreds. In the third year - as many as you want. And that was in a simpler time when government hadn't saddled industry with a morass of regulations. Mr Obama is simply ignorant of logistics. He is operating under the rubric of "Any sufficiently advanced technology is indistinguishable from magic." And of course since Mr. Obama is not a maker he has gone one step further and assumed that making things is magic and the normal rules of the universe do not apply. Time, space, energy, and the necessity to create the requsite ideas are instantly erased. You just think of what you want, wave the magic wand and presto. A million copies of your fantastic idea magically appear.
Obama said the fix will help the auto industry produce a viable product.

"We must help them thrive by building the cars of tomorrow," he said in an announcement before a live audience in the East Room of the White House.

Obama said that Washington must help states on tougher fuel standards, not work against them, and yet year after year, special interests have overshadowed common sense and rhetoric has supplanted the hard work needed to yield results.

"America will not be held hostage to dwindling resources," he said. "The days of Washington dragging its heels are over. My administration will not deny facts. We will be guided by them. ... We cannot afford to pass the buck."

The second memorandum ordered the Environmental Protection Agency to reconsider California's request for a waiver from the Clean Air Act -- a move that would allow California, the nation's most populous state, to set tougher tailpipe emission standards than apply nationally.

"Each step begins to move us in a new direction while giving us the tools that we need to change," Obama said.
Is he really serious about not being held hostage to dwindling resources? So where is his proposal for increasing American oil production? Not in evidence. And letting states determine what can be sold in their individual markets? That means the rules of the game will be changing frequently. Which is very bad for logistics planning. Every new rule or addition delays the production process. Mr. Obama needs to read a book. I suggest this one to start: Fundamentals of Production Planning and Control.

This whole deal can only end badly. Very badly. What ever happened to the administration that was supposed to be guided by science? By understanding of the fundamentals of engineering and technology? I guess we are fortunate that we have not elected a manager. We have instead elected a magician. God help us. Because it is obvious Mr. Obama will not.

Cross Posted at Classical Values


LarryD said...

Does he realize that he is ceding regulatory authority in this area to the California legislature? Because the auto companies that try to meet these criteria aren't going to maintain two lines, one to meet federal and one to meet California.

Of course what most people don't realize is that the other auto companies (Toyota, Nissan, Honda, et al) just pay the non-compliance fine and add the pro-rated cost into their cars price.

Neil said...

Of course he realizes he's going to force the entire country to live by the regulatory regime of California.

That's the point.

B7 said...

Sorry but the US auto industry is already finished...

Tom Cuddihy said...

Never give up! Never surrender! I say we take the California government!

Actually, the best way to do this is to take it up, immediately, in a favorable court. California should not be allowed to set the environmental rules for for Utah.

Bluegrass Pundit said...

The "Big Three" are under bankruptcy watch and begging for more bailout money. President Barack Obama thinks this is a good time to appease his environmental base by weighing Detroit down with a new round of environmental regulations. This is a horrible timing and it will severely damage the ability of the "Big Three" to return to profitability. The first increase in CAFE will take place by the 2011 model year. Detroit is now preparing to launch the 2010 model year in July. Read more here. The "Big Three" are sinking and Barack Obama fires a salvo of torpedoes

rumcrook™ said...

barak will sink this country like the auto industry.

its all about power and control. he doesnt care if we return to prosperity he will just blame it on his political enemies and straw boogymen.

its about cementing permanent power for him and the left wing. see the pay offs to acorn in the stimulas package?? they fix elections.

and if you can make your election fixers unstoppable and well funded a virtual brownshirt squad quasi government goon squad bent on keeping any oposition from ever regaining power who cares if the coutnry is ever really prosperous again.

they will be prosperous.

Anonymous said...

Wow, there's a lot of right-wing nut-jobs here. I bet you guys all think global warming is a conspiracy, too.

To inject a bit of rationality here: Obama knows that tougher regulations may be hard on American automakers that for years have been dragging their feet on selling anything but gas-guzzlers, but he also knows that improving fuel efficiency is vital to both national security and world climate. California (and a handful of other states) attempted to step up and do the right thing, but the Bush administration blocked them. Obama is reversing that, and he'll go even further, most likely setting national standards that meet or exceed the California ones.

Sure, a better strategy (in a perfect world) would be to set a hefty (and steadily increasing) gasoline tax, but that's not possible in our political system. This is, and it's the next best thing. American automakers will adapt or fail. If they fail, that'll be painful, but less so than continuing along our current path of oil dependence and climate corruption.

M. Simon said...


We have the technology to produce one person vehicles that get 120 mpg. If we cut back on that we might be able to get 240 mpg for a 1/2 person vehicle. And 480 mpg for 1/4 person vehicles. Sure it will be hard on the auto companies but we can do it.

And the 120 mpg vehicles? Mopeds. Obama should ride one every where he goes. To set an example.

Global warming? So far the warmists have yet to correct the value they use for CO2 warming for the effect of the PDO. The PDO has been known since 1997. I'm sure it is just a simple oversight.

M. Simon said...

BTW Joe,

It is touching to see so much faith in the political class. You must be from Chicago.