A Deal Made in ... ?

When an industry makes a deal with the entity which it had 

been at odds with over many things, is it a positive occurrence

for the public? It can be, but when it is a matter of collusion

rather than a legally proper agreement made for the mutual 

benefit of the involved parties and that of the consumer, 

especially when the two parties happen to be the automobile 

industry and the federal government. 

Late last year a political advertisement featuring President Biden 

and the top executives of the auto making corporations 

endorsing the administration's stricter fuel-economy rules 

and climate agenda (yes, these two beasts have reared their 

ugly heads at this gathering) was presented. The upshot of

it all is Big Business colluding with Big Government to 

receive subsidies (read: handouts) and hike auto prices (beware

of sticker shock, folks!). Ford, GM, and Stellantis (formerly

Fiat Chrysler) announced their "shared aspiration" for 

electric cars to be 40-50% of their sales in 2030.  

BMW, Honda, VW and Volvo fell in line and endorsed 

the need for "bold action from our partners in the federal 

government". Uncle Sam as a partner? Really? The Biden

regime is revising the CAFE (corporate average fuel-economy)

standards set forth by President Obama. The mileage mandate

will rise by 10% in 2023 from the existing standards in 2022

and then be raised by 5% each year through 2026 to 52 miles

per gallon. The automakers will also receive extra regulatory 

credits for producing more electric vehicles (EVs). 

Gee, how quickly the auto big shots have forgotten how they 

pleaded with President Trump to please roll back the Obama 

numbers! The car companies are now lobbying for more 

subsidies: if government mandates that they build more EVs,

it then has to pay more people to buy them. So the taxpayer 

gets roped into the deal, like it or not.  

A major difficulty for the auto makers is that EVs are impractical

for many drivers who live in the more distant suburbs of cities.

While EVs are less costly to maintain than gas-powered cars,

batteries need to be recharged every 200-300 miles, with the

effort taking 30 minutes or more even with the fastest available 

chargers. At present, most companies are losing thousands of 

dollars on each and every EV they sell, necessitating them 

raising the prices on their gas-powered trucks and SUVs

that an overwhelming majority of Americans prefer. 

The auto makers hope to lower EV costs over time via economies

of scale in manufacturing. They realize, however, that they could

be, at least for a long while, the only travelers to be seen on the 

electric highway and be losing money while rival firms enjoy

profits. So, what to do? Back President Biden's climate agenda

and get rewarded with subsidies and higher automobile prices.

Collusion to regulate the competition, effectively tying their

hands behind their backs, all while picking the consumers' pockets.

What a way to do business! 

MEM