Tag Archives: gas

GM & Chrysler Look for $35 bn Combined

17 Feb

I’m not a bank aficionado, so don’t ask me about the bailouts or the Swedish model for nationalization or anything else. I haven’t read the stimulus bill signed into law today, so don’t ask me about that, either.

I do know, however, that GM and Chrysler are in trouble after 3 or 4 decades of making cars and trucks that are/were, for the most part, a bunch of crap. The Dodge Charger I rented in Vegas was nice enough, but it was rough enough around the edges that I’d never consider buying one. The Dodge Caravan I rented in Florida last year was adequate, but seemed to be light-years behind the class-leading Honda Odyssey. GM has gotten better, but not across the board, not for every car.

So, GM needs $30 billion, will eliminate 20,000 jobs by 2012, and will put Saturn to death by 2011 and consider getting rid of Hummer, too.

Chrysler needs $5 billion, and will eliminate a few thousand jobs.

If I was GM, I’d throw out the Saturn name and just import or build Opels, and let the Germans run it. I’d sell Hummer, and I’d re-configure the entire operation to enable it to be quicker to market with new cars, and get plants to be as modern and efficient as those anywhere else in the world. If I was Chrysler, I’d hire some new designers right away and start an entire new line of vehicles across the board. Jeep should have 3 – 4 models, and Chrysler should focus on luxury while Dodge focuses on muscle cars like the Challenger, and mid-range passenger cars. The Fiat deal gives Chrysler access to small, fuel efficient cars, and luxurious stuff like Alfas.

Every SUV should be available with a common-rail diesel engine for economy. Every car should have a diesel or hybrid engine option. GM and Chrysler both need to innovate not just in terms of engine technology, but also with respect to interior design and perceived quality. It doesn’t take much – hell, just copy a new Hyundai and it’d be an improvement over all of what Chrysler shits out and half of what GM bothers to try and sell.

When the car market is in a slide, the most innovative and economical cars are going to do well. GM and Chrysler don’t have too many of those, but Honda is going to sell a $19,000 4-door Insight that gets close to 60 MPG. Honda’s sales may be down, but it doesn’t have its hand out. During the SUV boom, it chose to innovate with the Pilot and Ridgeline while still investing in the Insight and Civic hybrids. Toyota built 4Runners and Highlanders, but it also built Echos, Yarises, and Priuses.

GM? It built Silverados, Cobalts, and a decade’s worth of awful Trailblazers. Chrysler built fugly Sebrings and $40,000 Grand Cherokees with rental-car interiors. No wonder they’re in trouble.

Their paths to salvation don’t lie in staff reduction or bailouts or plant closings. They must innovate and build cars that can compete with the Germans, the Japanese, and most pathetically, the Koreans – the country that gave us a joke called a “Hyundai” in 1985, and now builds the Genesis, which puts most of GM’s cars to shame.

Detroit’s Chickens Coming Home To Roost

13 Oct

The domestic auto industry is getting its own bailout to the tune of $25 billion. Remember George W. Bush’s bleating 8 years ago about tax dollars being the people’s money? The people’s money is going to subsidize and prop up a lot of businesses that have made trillions taking the taxpayer, flipping him/her over, and doing very bad things to him/her.

I’m not banker or Wall Street whiz, so what little I know about what’s going on over there hardly makes me qualified to go into any detail about it.

But the auto industry – the domestic auto industry, to be specific – has been operating under a 60s mindset over the last decade. Build it big with lots of mostly-needless “features”, without regard to gas mileage. While Honda and Toyota were busy developing hybrid powertrains – even when gas was $1.50/gallon – GM, Ford, and Chrysler did nothing of the sort. They made their money off Silverados, Tahoes, Explorers, F-150s, Rams, and Grand Cherokees. Those vehicles are lucky, each of them, to pull in 15 MPG in combined city/highway mileage.

The use of petroleum products is a national economic and security issue, at this point, and the federal government since the 70s gas crises has mandated that the corporate average fuel economy (CAFE) of passenger cars sold in the United States meet some median MPG figure. Until very recently, the CAFE rules exempted most pickups and SUVs from the calculus, so the big three were happy and free to build idiotic gas guzzling megatrucks with impunity, and relegated passenger car design and sales to almost exclusively rental fleet sales. Anyone out there own a mid-90s era Chevy Malibu or Ford Contour? How about a Dodge Stratus? While Honda’s Accord and Civic, and Toyota’s Prius and Camry became the state of the art of passenger cars, Detroit concentrated on trucks and SUVs, foisting on us the craptastic Chevy Cobalt, the made-with-Matchbox-car-plastic Dodge Caliber and the now decade-old Ford Focus in order to meet CAFE standards.

The trucks and SUVs were cheap to build, used identical chassis and powertrains, and made the big three a whole lot of money. Domestically, anyway.

Until 2007, CAFE required cars to get 27.5 MPG, and light trucks 20.7 MPG. In the meantime, average fuel economy in other parts of the world is pretty routinely 30% higher due to the use of clean diesel and other smaller-engine technologies. In 2007, the US government passed a law requiring entire fleets – including light trucks – to meet 35 MPG on average by 2020.

When you consider that the domestic market reached its peak fuel economy in 1987 at 26.2 MPG, and by 2006 had fallen to 24.6 MPG, you have to ask yourself why the hell Detroit deserves a bailout of any kind.

It strains credulity and boggles the mind that the auto industry, which so opposed tightened CAFE standards for many years is now coming to the US taxpayer, hat in hand. The biggest slap in the face is the fact none of the big three have any excuse whatsoever to be in the position they’re in. Like a broken record, I will direct you to the websites for Ford UK, Opel/Vauxhall (GM Europe), and Daimler-Benz, (which until recently owned Chrysler). All three domestic automakers are quite capable of making modern, fuel-efficient, low-CO2 producing motor vehicles. The problem is they kept them away from the US market and sold them in countries where fuel is more expensive and regulations are more stringent on mileage and emissions.

The last time a US automaker came to Uncle Sam begging for a handout, it was Chrysler in the early 80s, facing bankruptcy and astonishingly turning itself around with the craptastic K-Car. Then, as now, it was a domestic automaker that kept on making shitty, gas-guzzling vehicles during a gas crisis, and found itself with cars that no one wanted. One might have thought that the lesson had been learned. Now, all three are in big trouble, as evidenced by the stock prices for Ford and GM, which are at historic lows not seen since the 1950s.

You can now buy one share of Ford stock for about 60% of the price of a gallon of gasoline:

There is talk of Ford merging with Chrysler. All I know is that the domestic automakers are caught in a disaster of their own making, and it’s beyond offensive for taxpayers to bail them out of their own dumb and short-sighted decisions in a country where, e.g., working people go bankrupt trying to pay medical bills.

Small Cars Don't Have to Suck

20 Jul

Coming soon to Nissan’s US showrooms, the Cube:

Jerking Us Around

18 Jul

Senator Larry Craig on oil:

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In other news, Larry “wide stance” Craig is still a Senator.

HT Wonkette

Jack Davis Redefines Cheap Political Stunt

11 Jul

I think that a fitting image next to the phrase “cheap political stunt” in the proverbial dictionary would be Jack Davis’ gimmicky vote-buying effort at a Greece, NY gas station yesterday.

The gas was subsidized by Democratic Congressional candidate and multimillionaire Jack Davis, and the campaign expected to pay for all of the 10,000 gallons that were stored in underground tanks at the Sunoco station at Long Pond Road and Ridgeway Avenue.

“We are here because I believe gasoline should help America run; gas prices should not be running America,” Davis said. “This (day) exceeded my expectations.”

About 700 customers, who waited about two hours in line, were charged $1.50 a gallon, and Davis picked up the difference between that price and Thursday’s regular price of $4.29 per gallon, or about $27,900, from noon to 4 p.m.

The 26th District has 654,360 residents. Why doesn’t Jack Davis just send us all a check in exchange for our votes? We know the guy refuses to go out and meet with or speak with average people, and instead campaigns via direct mail, so it’s only fitting that he’d basically buy people off with this idiotic gas stunt. Here, he made the voters come to him. How convenient.

Davis said gas prices are high because of special interests and lobbyists for oil companies. Davis is self-financing his campaign and is committed to spending $3 million on the race.

Davis’ opponents on both sides of the aisle attacked Thursday’s event.

“Like all western New Yorkers, Chris believes record-high gas prices are a serious issue that demands real bipartisan solutions, not slogans or political gimmicks,” said Nick Langworthy, campaign manager for Lee.

Kryzan said a national energy policy is needed. “It’s going to take more than a publicity stunt to solve the real problems that every day people are facing in western New York as a result of high gas prices,” she said in a statement.

Powers’ campaign manager, John Gerken, said Davis was “trying to buy votes.”

“He claims he has no intention of buying this election, but today proved he is a hypocrite,” Gerken said.

Rochester’s WHAM reveals why Davis doesn’t like being asked questions:

Just two days ago, Jack Davis (D) said, “Some will say I’m trying to buy a congressional seat. Not so, not so, not so.”

From noon to 4 p.m., Davis paid about $2.70 per gallon out of his pocket, while drivers paid only $1.50.

When asked if buying someone’s gas is the same as buying their vote, Davis replied, “No, I’m a patriot.”

No one asked him if he was a patriot or not. The question was whether it was buying a vote. The answer is – of course it is. It’s one thing to spend $30k on a mailing, it’s another to hand a potential voter a direct monetary benefit such as Davis did yesterday. Why not just hand them each a check for $50? I mean, sure it’d be effective, but is it legal?

Exxon Jack Davis

26 Jun

Running against Jack Davis (D-In Name Only) is like running against Mr. Burns from the Simpsons; a curmudgeony, bitter, angry man who is supposedly spending $3 million of his own money to run for congress a third time, after losing twice already. Oh, and did you know Davis doesn’t like the Chinese or Mexicans? Yeah, it’s true. In fairness, Davis has better hair than C. Montgomery Burns.

One wonders why he’s bothering to run again, seeing as he expressed “relief” upon losing to Tom Reynolds in 2006.

But Davis’ resemblance to the fictional Mr. Burns isn’t just limited to temperament and wealth. You’ll recall that Mr. Burns own the Springfield nuclear power plant. Well, Mr. Davis owns $35 million in energy stocks.

From a Powers campaign press release today:

Jack Davis revealed in financial disclosure documents that he owns up to $35 million in Big Oil and energy stocks. A recent poll released by the Los Angeles Times/Bloomberg revealed that 76% of Americans blame Big Oil, George Bush, oil speculators, and OPEC for record high gas prices.

At a press conference held at a Mobil gas station in Amherst, NY, where the price for a gallon of gas was $4.19, Powers called for an end to corporate greed that is causing skyrocketing gas prices. The Powers plan for Securing Our Energy Independence calls for increased investment for renewable energy and curbing corporate greed by reigning in oil speculators.

“We now know Jack Davis has up to 35 million reasons to vote against lower gas prices. Exxon Jack is no different than George Bush and the politicians in Washington, DC who are already bought and paid for by the oil companies. Western New York needs a Congressman who will look out for their interests, not Exxon/Mobil’s bottom line” stated Powers Campaign Manager, John Gerken.

TOP 10 QUESTIONS JACK DAVIS MUST ANSWER ABOUT HIS OIL INVESTMENTS

· How can you say you are not beholden to special interests when you have up to $35 million dollars invested in Big Oil and energy while hardworking Americans struggle to fill their gas tanks?

· How can hard working Western New Yorkers trust you to lower gas prices when you profited by up to $280,000 off of Big Oil and energy last year?

· Why should Western New Yorkers believe that you will vote in our interests and not your own when it comes to Big Oil?

· Do you support drilling in ANWR?

· Would you vote against tax breaks for big oil?

· Is there really any difference between spending your own money that you received from Big Oil and taking special interest money?

· Isn’t it a little hypocritical that you made more than 5 times the median income of the district last year off of Big Oil and energy, but you say you understand the hard times Western New Yorkers are facing?

· What would you do in Congress to lower the price of gasoline and help the families in Western New York that you want to represent?

· Do you believe that renewable energy will help alleviate man-made global warming?

Davis won’t answer these questions because he never answers any questions. Not from voters, anyway. He doesn’t go out and meet them. He’ll show up and speak with reporters or party leaders and hurl invective at his opponents, but his stock answer to every problem, every issue is “foreigners”. Don’t believe me?

EDIT: VIDEO REMOVED FOR OBNOXIOUSNESS

That MacBook on Jack’s desk? Made in China. He also claims he won’t take special interest money.

His one big contributor is Jack Davis. He is his own special interest. It’s quite easy to make that pledge when you’re a millionaire.

On the other hand, Powers doesn’t make almost $300,000 per year off of energy stocks. His plan for energy:

An Energy Bill that Invests in Our Future – Provide tax credits to investors who empower scientists to develop renewable energy. Instead of giving away billions to Big Oil, we should provide funding to scientists and engineers to develop renewable energies. As of right now, Congress only provides an advancement of one year to investors who want to develop renewable energies while they provide billions to Big Oil. We need to extend these credits to 10 year allotments in order to provide scientists and engineers with the funds necessary to cure America’s oil addiction and make our Country safe.

A Menu of Options – There is no silver bullet solution to the energy crisis. The United States must not limit Americans to any one particular form of renewable energy, but provide several options in order to protect against future monopolies such as the one oil currently holds.

Apollo Sized Ambitions – When we come together as a nation, we can accomplish anything. The United States had a vision to get to the moon; we made the commitment and accomplished the task. If we are truly going to be energy independent, Congress must set firm goals of when America will be powered by renewable energy and then commit ourselves to making sure this happens.

A Government that Leads by Example – Jon Powers will support legislation that requires all newly purchased nonmilitary federal vehicles (including Postal vehicles) to be American made and use hybrid technology or E85 fuel within five years. We must also provide state and local governments incentives to move all non law enforcement vehicles to do the same.

Helping the Consumer Lead by Example – The federal government allows for a tax credit of up to $3,400 on hybrid vehicles. This incentive is only given to the first 60,000 models of each car sold. Jon Powers will work to make sure that all hybrid vehicles receive this tax credit until hybrids and other clean cars make up a majority of all vehicles sold. Jon Powers also supports housing tax credits for homeowners who invest in making their home more energy efficient.

Stopping Corporate Greed by closing the Enron Loop-Hole – Special Interest groups and Big Oil have created a loophole in the law that allows speculators to manipulate the price of oil and inflate it by $30-$50 per barrel. While Americans pay over four dollars per gallon of gasoline, Big Oil is making record profits. Jon Powers supports closing the loophole and forcing speculators to provide realistic estimates so our gasoline prices will go down.

An America that Leads by Example – Jon Powers will fight for legislation to require the use of safe, renewable energy sources like wind, solar, and hydropower to generate 25% of the nation’s electricity by 2025. America must also invest in technologies to improve ethanol and convert to cellulosic ethanol so that America can grow its own fuel and it will not affect the food supply.

Forcing Oil Companies to Lead by Example – Jon Powers supports legislation that will require oil companies to install bio-fuel pumps at 25% of their stations.

Reducing Carbon Emissions – Jon Powers will support legislation to cap emissions of greenhouse gases and reduce them by 20% by 2020.

All I know is, Exxon Jack’s tank of ideas and solutions is running on empty.

Shorter Bush / McCain Energy Policy

23 Jun

Drill, drill, drill.

Or:

The best way to wean an addict off heroin is to provide him with new sources of heroin.

It’s 2008. The gasoline-powered internal combustion engine is century-old technology. It’s time for something new to be developed for the mass market, because the supply of gas isn’t infinite, and people will always want personal means of conveyance.

To drill now would not lead to oil independence, and benefits would not be felt for a decade. It’s an oversimplistic answer to the question of $4.00/gallon oil.

The X-Prize foundation has a $10 million prize available to the team that can meet this goal:

To inspire a new generation of viable, super-efficient vehicles that help break our addiction to oil and stem the effects of climate change.

And then there’s Joe Biden’s point on yesterday’s Meet the Press: There are already millions of offshore acres available to oil companies for drilling – right now – that they’re not taking advantage of.

We’re not trying to get Saudi to drill more, we’re trying to get them to pump more of what they’re drilling. They’re not pumping what they could, number one. This is a gift, a gift to the oil companies by John McCain. They have now leased 41 million acres of offshore leases. They’re only pumping in 10.2 million of those acres. Seventy-nine percent of all the offshore oil available off the coast of Florida, into the Gulf of Mexico, the Atlantic Coast, the Pacific Coast, lies within those acres that they now have. Why are they not pumping? Why are they not doing this? Why are they not pursuing what’s estimated to be a total of 70–54 billion barrels of oil at their disposal right now if they pump? Why are these greedy fellows deciding they want to go beyond that? It’s because they want to get it in before George Bush leaves the presidency. It’s because they’re not pumping the oil to keep the price up. They are not even drilling. So here you have 30 million leased acres they have right now that possesses 79 percent of all the offshore, and they’re not drilling. And John says they need more? And it would take 10 years for it to come online.

Biden’s point – the oil companies are keeping supply artificially low (as OPEC is) in order to make the price, and their profits, jump.

Jon Powers on Oil Prices

13 May

This is an article that Jon Powers released today on the issue of gas prices and the continuing replenishment of the Strategic Petroleum Reserve. The Senate voted today 97-1 to halt replenishment of the reserve, thus freeing 70,000 barrels of oil into the open market on a daily basis. It’s a drop in the bucket, but a very expensive bucket. – BP

As Memorial Day approaches, many working families across Western New York are preparing their summer plans and struggling to find ways to afford our skyrocketing gasoline prices. The price for a gallon of gasoline is now over $3.85 and approaching $4 in Western New York, which means that car owners who have a 15 gallon gas tank are now paying almost $60 to fill up at the pump. Continue reading

Lotta Poor Man Make a Five Dollar Bill

7 May

People are having a hard time unloading their gas guzzlers. That writing’s been on the wall literally for years. I owned a Honda Pilot for a while and reached my breaking point when gas reached $1.85/gallon. That was in 2004.

Currently, I drive a VW Passat Wagon 2.0T FSI which has a high-efficiency direct-inject turbocharged 4-cylinder engine that gets a combined 27 MPG. It has a 19 gallon tank, so I get about 440 miles’ worth of range on a single tank, and I can easily fill it only once per week. I last paid $3.71 per gallon, topping the tank off at around $60.

But I have distinct memories of the late 70s, the last time we had a scare like this, and almost every single car ad on TV touted the car’s EPA mileage figures. We are slowly coming back to that.

Ideally, I’d like to have a direct-inject turbocharged common rail diesel engine getting a combined 50 MPG so I could pull 800 miles’ worth of range, but affordable, Tier II Bin 5 compliant diesel passenger car engines (50-state legal) appear to be a year away from showrooms.

The Wheel is Turning and You Can't Slow Down

6 May

The political fad this week seems to be a gas tax holiday. Politicians with ambitions as lofty as President and as lowly as county legislature are proposing that just about every federal, state, and county tax on gasoline be abrogated because, evidently, we are entitled to tax-free, cheap gasoline. Never mind that taxes on gasoline pay for things like road maintenance.

Aren’t you somewhat tired of politicians treating you as a stupid, sound-bite consuming clown? Because that’s what this does. Gas may be ridiculously expensive right now, but there are so many causes of that, none of which get addressed by this politics-as-usual, quick-fix pander which, according to Paul Krugman wouldn’t necessarily solve the problem:

Why doesn’t cutting the gas tax this summer make sense? It’s Econ 101 tax incidence theory: if the supply of a good is more or less unresponsive to the price, the price to consumers will always rise until the quantity demanded falls to match the quantity supplied. Cut taxes, and all that happens is that the pretax price rises by the same amount. The McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers.

Is the supply of gasoline really fixed? For this coming summer, it is. Refineries normally run flat out in the summer, the season of peak driving. Any elasticity in the supply comes earlier in the year, when refiners decide how much to put in inventories. The McCain/Clinton gas tax proposal comes too late for that. So it’s Econ 101: the tax cut really goes to the oil companies.

The Clinton twist is that she proposes paying for the revenue loss with an excess profits tax on oil companies. In one pocket, out the other. So it’s pointless, not evil. But it is pointless, and disappointing.

In fact, there’s not one economist who thinks this is a great idea. (I’m sure there’s one out there. Maybe two. But they’re the Dr. Nick Rivieras of economics.) If you drop the price, demand will rise, and the prices will go up and the oil companies’ already swollen profits will swell further. Yay! In addition to all that, budgets already factor in gas tax revenue, and at least on the local and state level would need to be made up somewhere.

The idea of a gas tax cap in New York – where it runs on a sliding scale – makes some sense, to prevent windfalls when gas prices soar. But abolition is downright silly.

Do we really want to screw with the economy on the fly like this? If we want to abolish the gas tax, wouldn’t it be better to do it as part of the annual budget process, rather than pandering to voters during an election cycle?