GM Exec Criticizes CAFE Rules

The Congress is heating fresh environmental rules imbibed in Corporate Average Fuel Economy (CAFÉ) program. Along with the warming of the rules is the criticism by Detroit automakers especially General Motors Corp. Bob Lutz, GMs vice chairman said that the proposal would effectively hand the truck and SUV market over to the imports, particularly the Japanese.

Lutz's criticism was posted on a GM blog late Friday. Part of the comment suggests that GM will fight hard against any proposal to raise fuel-economy targets by a specific amount. Early this December, chief executives and retired military generals clamored for a 4 percent annual increase in standards. They further added that their aim is significant for energy security.

GM, more than any other automaker, has expressed its ardent opinion regarding the matter. The former said CAFÉ rules controlled what automakers could build without regard for what customers were willing to buy. Lutz said the proposed increases would limit GM's ability to build as many larger vehicles as its customers may demand. Lutz "Season's Rantings" message reflects GMs intention to focus on pickups and bigger SUVs to improve profits in North America.

CAFE rules state that automakers earn credits for exceeding the fuel-economy standards in a model year. Said credits can be utilized to cover a shortfall in the following three years. Japanese automakers like Toyota and Honda surpass the standards. These automakers are famed for manufacturing sophisticated interior OEM replacement auto parts for Toyota and Honda auto body parts.

Unfortunately, Detroit automakers like GM, Ford and DaimlerChrysler have already used credits in recent years. Auto parts GM are now focused on boosting SUV and trucks of the automaker. This is also true with Ford and DaimlerChrysler. The latter is busy promoting Edge and Mustang.

Lutz noted, The Japanese automakers "have earned years of accumulated credits from their fleets of formerly very small cars. They can afford to go bigger, which they're doing now by the way, and they'd be able to move up and fill the segments we'd be forced to vacate." He further added, "We don't have any magic 100-m.p.g. carburetor that we're holding back because we're in bed with the oil companies. The Japanese government is spending huge amounts on advanced battery research. It would be nice if our government would do the same."