Obama Raises CAFE Standards; GM Suspends Volt Production

The Obama EPA is getting ready to formally raise the CAFÉ standards that auto companies have to meet from the current 34.5 mpg by 2016 to 54.5 mpg by 2025, reports the Washington Post. Even the 34.5 mpg requirement – that the Bush administration imposed in its waning days to foster “energy independence” and deflect attention from its Iraq debacle -- required the auto industry to expend $85 billion for retooling. So what a 50 percent increase over that will cost car companies is anyone’s guess – although be prepared, dear taxpayers, to open up your wallets to provide retooling loans.

But how is the pioneer in the genre of cars with an engine capable of meeting these new standards – to wit, the electric-hybrid Chevy Volt – doing? Not too well. In March, the Wall Street Journal reported :

General Motors Co. will idle production of its Chevrolet Volt battery-powered car for five weeks beginning this month because of slow sales amid an effort to boost the vehicle's consumer appeal, the company said Friday.

Launched last year with great fanfare, the Volt has had a rocky start as sales stalled, and the car became a lightning rod for critics of the Obama administration's auto-industry bailout and support for alternative energy.

GM said around 1,300 workers at the Hamtramck, Mich., factory where the Volt is built will be out of work between March 19 and April 23, a spokesman said. The plant had just resumed production on Feb. 6 after a prolonged holiday shutdown.

Mark Reuss, GM's North American chief, said in an interview the auto maker remains committed to the Volt and is taking a number of steps to improve lagging sales. GM will launch a new national ad campaign this month that features Volt owners praising the car. It also recently dropped the monthly cost of leasing the vehicles to $350 from $399 for a 36-month lease.

But a few short months later, GM is idling the plant yet again. That's hardly a surprise. GM, under pressure from the Obama administration, had a target of selling 45,000 Volts this year. Actual sales? Around10,600 sales through July. This was – triple the 2,870 sold in 2011, but only because California gave the car an artificial boost by allowing lone Volt drivers on the car pool lanes.

But what is GM planning to do when the plant is idled? Retooling it to manufacture cars that people actually want and can afford – even without the $7,500 subsidy that the $40,000 Volt gets. Reports Reuters:

GM…will continue to "match supply with demand" for both the Volt and the Chevrolet Malibu sedan that is also made at the plant. The automaker declined to specify how long the plant will be closed.

During the shutdown, GM will do some retooling and other work to prepare for production early next year of the 2014 Chevrolet Impala sedan. The plant will begin building preproduction prototypes of the redesigned Impala this fall.

Welcome to Obama’s green economy where products that sell can’t be made – and the ones that are made, don’t sell.

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  • John||

    The CAFE standards are among the dumbest policies in government. What a fucking sick joke.

  • ||

    For the most part CAFE standards have stayed above what the industry would have done anyway.

    If you recall trucks and SUV were not so long ago exempt from CAFE standards yet fuel efficiency doubled and in some areas tripled despite having no CAFE standards.

    No idea if these new standards follow that same line of keeping them above what the industry would have done anyway.

    Basically what CAFE standards do is make it impossible for a new player to enter the market.

  • Drake||

    Meanwhile the EPA keeps the European and Japaneses diesels that could actually meet those standards out of the U.S. A few make it in with expensive urea filters. But if the EPA matched European emissions standards, there would be a flood of them - including some nice Fords and Opels.

  • Cdr Lytton||

    And the chicken tax keeps those trucks and SUVs protected as well. Another sop to the UAW years ago.

  • $park¥||

    Threw out the old comments that were here eh?

    Regardless, I'm pretty sure you don't need to accent the E on a fucking acronym.

  • Randian||

    54.5 mpg by 2025

    Every time I hear this I think of Dr. Ferris screaming at the torture machine operator to simply "make this shit work" (paraphrase).

  • Auric Demonocles||

    GM Suspends Volt Production ...Obama Raises CAFE Standards

    Coincidence?

  • The Late P Brooks||

    GM said around 1,300 workers at the Hamtramck, Mich., factory where the Volt is built will be out of work between March 19 and April 23, a spokesman said. The plant had just resumed production on Feb. 6 after a prolonged holiday shutdown.

    WTF?

    Last time I checked it's AUGUST.

  • nobody||

    She deleted the post that had my earlier comment, but yes, the linked article is dated March 2, 2012 even though she says that the WSJ reported it 'just yesterday.'

  • Drake||

    USA Today reported it yesterday.

    http://content.usatoday.com/co.....D1qp9DsYgd

  • Loki||

    GM sucks. Also, sky is blue, grass is green. Film at 11.

  • Ken Shultz||

    Mark Reuss, GM's North American chief, said in an interview the auto maker remains committed to the Volt and is taking a number of steps to improve lagging sales.

    Excuse me, but it seems to me that the use of Mr. Reuss' title may be a little misleading, there.

    When they call someone "GM's North American chief", it makes it sound like everybody working for GM in North America is working for him. I don't think that's the case, though.

    See, GM is majority owned by the U.S. Government and the UAW. But, the way they're using this statement here in this article, somebody might think that the independent "chief" of GM is independently endorsing Obama's long term plan for energy efficient cars. But, actually, he's not independent at all. As far as I can tell...

    He works for Barack Obama!

    He works for the UAW, too, but he also works for Barack Obama.

    Come to think of it, I don't think it should cause a big legal problem if some Republicans in the Senate insisted on holding confirmation hearings the next time a new "North American chief of GM" is chosen--considering the Senate has an Advice and Consent role spelled out for them in the Constitution.

    So, ahem, back to what I was saying...why does anybody bother asking Mark Reuss, GM's North American chief, about what he plans to do with the Volt in the future?

    Why not just ask the UAW or Barack Obama? since Mark Reuss is working for them.

  • Ken Shultz||

    Welcome to Obama’s green economy where products that sell can’t be made – and the ones that are made, don’t sell.

    I said this in another thread earlier today, but it bears repeating.

    It's insane that we have to point out, some twenty-odd years after the wall came down, that government owning a company like this, in conjunction with a union, is a bad idea!

    I keep hearing that calling socialism out when you see it tells people you subscribe to some simplistic, outdated worldview, but maybe Dalmia's criticism here gets to the heart of it. There sure wasn't anything new or innovative about Obama nationalizing an industrial giant.

    Calling socialism "the green economy" sure doesn't mean it isn't socialism, or that it won't fail for all same old, simple reasons that the red economy never worked.

  • Mainer2||

    Simplistic outdated worldview, like take responsibility for yourself, work hard, honor your word, honor your debts....so old fashioned, so simple minded.

  • ||

    Never mind that CO2 emission have dropped in the US to below 1995 levels.

  • ||

    A "Green Economy" is an oxymoron. As a "Green" is a moron!

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