popular logistics

Congressman Dingell’s loyalty to the US automobile industry is laudable. However, resisting higher mileage standards does not help the industry. It doesn’t help management, it doesn’t help the workers, and it doesn’t help the stockholders. (Click Here or Here) It helps the Japanese, especially Toyota.

 

Ford Motor Company, for example, started losing the taxi and limosine market to Toyota long before Mayor Bloomberg’s initiative that all new taxis were to be hybrids. All around Wall Street, where the limos pick up investment bankers and hedge fund managers in cars that are driven 50,000 to 100,000 miles per year, you see old Lincolns and brand new Priuses.

 

Each Prius (Edmunds, Toyota, Car Talk), which gets 45 miles to the gallon, will burn 2,222 gallons as it is driven those 100,000 miles.

 

Each Lincoln Town Car, (Edmunds, Lincoln, Car Talk), which gets 12 mpg, will burn 8,333 gallons in that 100,000 miles.

 

At $3.00 per gallon, fuel for the Prius costs $6,222; fuel for the Lincoln costs $23,333. It’s economics not environmentalism. Fuel costs for the Lincoln are almost four times higher than for the Prius.

Even with a new set of batteries at $5,000, the operating costs for the Prius are less than half those of the Lincoln.

 

GM and Ford act like a man with a toothache who won’t go to the dentist because it will hurt. But unless he takes action the man will lose the tooth. They act like someone with pain that ‘is probably nothing’ who dies of cancer. And Congressman Dingell is saying ‘It’s ok, it’s probably nothing.’

 

Dingell’s loyalty is laudable. But rather than tell them what they want to hear, he should tell Detroit the hard truth - milage matters. Or to paraphrase Bill Clinton, ‘It’s fuel economy, stupid!’