Motor Company (F)
CEO Alan Mulally is one of the most respected figures in the auto industry
today, having been the only head of a member of the "Big Three" U.S.
automakers to save his company from bankruptcy in the
2007-2008 financial crisis. However, his new comments will certainly be
considered controversial by politicians, lobbyists, and citizens alike.
I. Block States From Self-Governance of Fuel Economy?
Mr. Mulally met early Tuesday morning with House Speaker John Boehner (R-Dayton, Ohio); Rep. Fred
Upton (R-St. Joseph, Michigan), chairman of the House Energy
and Commerce Committee; and Rep. John Dingell (D-Dearborn,
Mich.), a key supporter of the Detroit automakers.
Later in the afternoon he attended a meeting co-hosted by Reps. Dan
Benishek (R-Crystal Falls, Mich.); Bill Huizenga (R-Zeeland, Mich.); and Jeff Duncan, (R-Laurens, S.C.); with Rep. Hansen Clarke, (D-Detroit, Mich.) also in
attendance. He also met with Bill Daley, the White House chief of
staff, and David Plouffe, senior adviser to President Barack Obama in a separate
At the meetings Mr. Mulally urged lawmakers to take Congressional action to
implement a single consistent fuel economy standard and block states from
proposing their own stricter standards.
Despite the fact that Congress is indeed preparing a new set of fuel economy
standards, which would extend the Corporate Average Fuel Economy (CAFE)
through 2025, the proposal to strip states of the right to regulate their own
standards to a stricter threshold is controversial.
First, opponents argue that it strips states of their right of self-governance.
This is a place where Republicans, in particular find themselves in a
philosophical dilemma. Their party has recently run on a platform of
state rights, but they have traditionally opposed letting states regulate their
own emissions, with former Republican President George W. Bush moving to block
California and other states from doing so.
Second, the decision would run afoul of a 2007 Supreme Court ruling in the case Massachusetts
v. EPA, which concluded that states had the right to set their own stricter
mandates. The ruling allowed California to effectively sue
the federal government and force it to stop obstructing its
standard. In the wake of the suit, President Obama instructed the U.S. Environmental Protection Agency and
Congress to allow states to set their own standards.
The issue will likely be pushed. Even as the U.S. debates the future of
CAFE, California, the nation's most populous state, is moving to set its own
stricter standards for 2025. It will likely be followed by several other
states that adhered to California's previous emissions policy, adopted by President Barack Obama for the entire nation.
II. Ford: Back "One Technology"
Mr. Mulally also urged members of Congress to back "one technology"
if they were serious about alternative energy vehicles.
Ford Motor Company officials did not specify what this "one
technology" was, but most construe it to mean electrified vehicles. Ford has been
less enthusiastic than its peers about the "other" leading
alternative vehicle technology -- ethanol fuel.
The potentially implied proposal to ditch federal subsidies of ethanol and corn
farming is a controversial one -- among corn farming states, at least.
Farmers have grown fat off billions in yearly
government subsidies, with a major chunk of it coming from ethanol
grants and mandates. In total corn farmers drew $73.8B USD from 1995-2009
from the U.S. federal and state governments.
The pull of the corn farmers is particularly strong in the U.S. Senate, where
the numerous low-populous farm states have a much larger representation.
The proposal may also target other alternative fuel technologies -- such as
compressed liquefied natural gas (CLNG), which some say could supplement
traditional petroleum, much like ethanol.
III. Ford in Trouble?
One thing mentioned by Mr. Mulally may trouble Ford investors. He would
not comment on Ford's Q2 2011 sales, but did say that the market is
"slowing down … it's a little less than what we hoped for at the beginning
of the year", according
to The Detroit News.
That could be a trouble sign as Ford and other automakers had seen strong
sales over the past couple quarters.
If the American automakers are indeed starting to struggle once more, that
could make the debates over ethanol and emissions even trickier. After
all, the automakers say that a strict 62-mpg standard could "kill" the American auto industry.
And any money in ethanol subsidies will likely come at the expense of
government funding of electrification efforts, which the automakers will likely
need to satisfy CAFE.
quote: With already food shortages all over the world, and supply at his limits, its imo greasy to use food as full.
quote: I see till we get things like fusion working
quote: and not ONE of the major physics roadblocks have been solved yet.
quote: Yes, a commercial grade fusion reactor is probably 50 years off
quote: Hunger is caused by, mostly, mismanagement and poor infrastructure. It's a common misconception that "world hunger" is because there's food shortages. This isn't the case, in reality. North Korea, for example. Is there a food shortage? No. Then why are their people starving? Because their government spends 30% of their GDP on the military and they have no consumer driven economy to speak of.
quote: In North Korea, there IS a food shortage
quote: hat's why North Koreans only eat 700 cal per day
quote: No. There is a food shortage in the world, and is the primary reason of world starvation. This is why we donate food and funds to poor countries all over the world
quote: I think you really need to improve your common knowledge before casually casting your uneducated opinions as facts.
quote: It's extremely hard to grow crops in North Korea, so maybe instead of spending 30% GDP on nukes and tanks, they could be IMPORTING food? There's not some mystical food shortage, it's not a depleted resource. It's self inflicted in their case.
quote: Aren't you leaving out a HUGE factor? They eat 700 calories a day because the average North Korean can't afford to eat more. They get paid next to nothing, if they are lucky to be paid at all.
quote: Wait, there's a world food shortage but there's enough so that countries can donate food to other countries? You contradict yourself.
quote: I stand by my statement. Regional food shortages are NOT because the world doesn't have enough food. It's because of poor planning, bad infrastructure, and the lack of a thriving economy.