A defense of the GM bailout

Because small fixes make the biggest difference 12

gm

Despite the excellent reasons to reject the GM bailout, consider this: a strings-attached investment that tweaked GM's production model could reap huge climate benefits -- perhaps bigger than anything else we do to autos in the near term. That's because the biggest opportunities in fuel economy are at the low end of the fleet, not in FutureCars.

Remember: you save more fuel switching from a 15 to 18 mpg car than switching from a 50 to 100 mpg car. (The explanation is here and here.) For a company like GM that's based on building fuel-wasting behemoths this has huge implications. Seemingly minor tweaks can yield colossal returns. Let's take a look at some specific changes to the GM fleet:

  • The Hummer H3 averages 15 mpg. Making an H3-equivalent that got just 18 mpg would be the fuel-saving equivalent of turning a Prius into a 100 mpg hypercar.

  • The GMC Yukon Denali is even worse: it averages 14 mpg. Turning that tank into a 20 mpg truck would save more fuel than turning two Toyota Tacomas (22 mpg) into two Honda Civics (29 mpg).

  • The Chevy Trailblazer is worse yet: it averages 13 mpg. If we make Trailblazers that got 22 mpg, we'd save as much fuel as we would by taking a Toyota Corolla (31 mpg) off the road entirely.

  • Making the Cadillac Escalade (14 mpg) get just 18 mpg would save more fuel than turning a 50 mpg car into a 500 mpg car.

It's easy to get distracted by cool fads like hypermiling and the technological promise of Magic-Future Cars. I'm all for these things, but they are much, much, much less important than the drudgery of making improvements to the bottom end of the fleet. That's where the real gains are to be had.

Of course, there's another possible strategy: Just let GM fail outright. Then instead of upgrading Hummers to make them go from shockingly-horrible to just horrible, we might have a chance to go from shockingly-horrible to decent in terms of fuel efficiency. And personally, I'd like to retool a lot of those factories that are currently used to make planet-crushing tank-trucks. In their next iteration, maybe those Heartland factories could flourish as the manufacturing backbone of new infrastructure for renewable energy and truly efficient autos. That'd be groovy too.

* Please note: in all the comparisons above, I assume that the cars are driven an equal amount. Also, for any make and model there are many different packages and features that affect fuel efficiency; in the examples in this post, I picked specific real cars, but I didn't try to average across all the available configurations of every make and model.

This post originally appeared at Sightline's Daily Score blog.

Eric de Place is a senior research at Sightline Institute, a Seattle-based sustainability think tank, working on promoting smart policy decisions for the Pacific Northwest. Visit http://daily.sightline.org/daily_score to read more on Sightline’s blog.

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  1. Pangolin's avatar

    Pangolin Posted 10:13 am
    15 Nov 2008

    And then a miracle occurs.....The nasty part about bailing out Detroit is that Toyota, Honda and Nissan are also suffering from sales drops despite the fact that their vehicle fleets get significantly better mileage. Even with these improved mileage vehicles Toyota has suffered a drop in sales volume that would cripple any US automaker. For any domestic vehicle a more efficient import can be found already in production and they can't sell all of those cars.
    Where are these improved mileage vehicles supposed to come from?  They aren't on the drawing boards of engineers and there certainly aren't any in pre-production testing. They don't exist. We could try slapping electric motors, batteries and motor-generators into existing vehicle lines but their isn't enough motor or battery production in the world to supply them.
    The US auto industry as a free-market entity is dead. The only way to save it is to idle assembly lines while they retool to produce non-existent, plug-in hybrid vehicle designs all the while paying workers to do nothing. Then it has to be re-started and car buyers will need guarantees of vehicle performance that bankrupt companies cannot honestly provide. All of this to sell to consumers who cannot afford to purchase cars due to the overall economic failure.
    Can we stop digging this giant hole into which we are throwing resources? Couldn't we build something that create resources instead with that money and manpower? Only a miracle will get us out of this mess.

    Put the Carbon Back
  2. Tasermons Partner Posted 10:26 am
    15 Nov 2008

    "Specific changes"?...Let's take a look at some specific changes to the GM fleet:
    Uh-huh...and has GM announced any plans to make to changes?
    And have those "changes" been put into any part of the bailout measure?
    And even so, what sort of "punishment" or guarantee do we have that after we give GM the money, they won't just try to find a way around these "changes"?

  3. Billhook Posted 10:45 am
    15 Nov 2008

    Tweakers will save the climate ?To suppose that tweaking the mileage of the worst US vehicles will make them either attractive, or affordable, or appropriate in an oil-constrained and carbon-constrained society, seems distinctly naive.
    There seems little awareness in the US of the scale of the brazen fraud Detroit has run with Hueston -

    By contrast with US vehicle design priorities, the French Citroen company developed a 50mpg passenger vehicle engine in '39, buried it until '45, and then put it and its offshhoots on the roads until the '80s.

    I drove one myself (a 600cc version) until 2002.
    The proposed "Tweaking" would in practice just maintain that fraud.
  4. PacificGatePost Posted 11:30 am
    15 Nov 2008

    DETROIT BAILOUTForget Chapter 11, however, WHAT you implement and HOW you do it is critical to the outcome.
    Here is the type of plan Congress should consider >
    http://pacificgatepost.blogspot.com/2008/11/solution-for- ...
    Trying something outside the box like this, is the only way to save the U.S. Auto Industry.
    ... it deserves saving.
  5. Biodiversivist's avatar

    Biodiversivist Posted 2:28 am
    16 Nov 2008

    Some quibbleshttp://home.comcast.net/~russ676/photo/ayellowhummer.JPG
    Comparing mpg improvements to a Prius to mpg improvements in Hummers may make for some extreme and shocking comparisons but they are also nonsensical. There is no need to improve the Prius mileage. There is a need to improve the fleet mileage and the more you can improve it, the better.


    They are already getting rid of the Hummer line. They need to expand this strategy.
    Going from 14 to 20 is a 43 percent increase in mileage.
    Going from 13 to 23 is a 69 percent increase in mileage.


    To put this into perspective, Friedman's hybrid Lexus RX 400 H cost $6,000 more than the non-hybrid version and gets 28 percent better mileage. From an engineering perspective, it isn't possible to get a 43 or 69 percent improvement in mileage for a Denali or a Trailblazer by converting them to hybrids.
    Unlike airline manufacturers, car makers constantly retool to come up with new models every year. Retooling isn't a showstopper.
    The problem is with consumer choice. If piercings and tattoos can be made cool, high mileage cars can. It is kind of hard to convince consumers of that if there are only two or three cars that bust 40 mpg to pick from, isn't' it? Billboards and ads to make people want to own the cars the cool kids own are of no value if there are no high mileage cars to advertise.
    If America is to cut oil use in half, is must double its average gas mileage. You can't do that by tweaking existing gas hogs. You have to go a new direction and the laws of physics say that you must have smaller cars. To get consumers to prefer them, you just have to convince them that big cars are not cool, and small ones are. It's all in our heads. It's all about status seeking



    In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
  6. amazingdrx Posted 5:01 am
    16 Nov 2008

    This might workLet oil companies pay to bail out auto companies.
    http://amazngdrx.blogharbor.com/blog/_archives/2008/11/15 ...

    http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin
  7. nycowboy Posted 1:03 am
    17 Nov 2008

    Other Reasons to Save Domestic Auto Manufacturers

    American made cars are made with environmental standards. Foreign made cars are often made significantly in the third world, even if they are assembled in America to avoid tariffs. That means that factories don't have to necessarily have any kind of emissions control or take pollution abatement.
    American car companies, and the UAW pay their workers well and take care of them. Well paid workers have more money to contribute to the local economy, more money to spend on local/sustainable pursuits, and more time for outdoor recreation. Marginal people making marginal pay for hard labor don't have the time or money for environmental pursuits.

  8. Delay And Deny's avatar

    Delay And Deny Posted 5:10 am
    17 Nov 2008

    Cap and Bail

    Bailout?
    Sure...but first cap executive pay.
    $100,000 is max from CEO on down.
    No perks until company is solvent and all loans are paid.

  9. Delay And Deny's avatar

    Delay And Deny Posted 5:12 am
    17 Nov 2008

    Equi-Knocking At Prius Door

    The GM Equinox fuel cell powered SUV gets as good mileage (on hydrogen) as the Prius and it ways 2 and half times as much.
    If GM were to focus solely on the Equinox and the Volt (fuel cell version) and to cap executive pay, then I might approve the bailout.

  10. jeffgreen11 Posted 10:54 am
    17 Nov 2008

    This article is a farseBy 2050 the fleet average should be 60 mpg average. So we want to save gas for 15 to 18. Its just this sluggish dark crawl to working ourselves into the eventual reality of energy efficiency. I understand the logic of how much fuel it saves, but its so far from the reality of sustainability its laughable.
  11. racc Posted 2:52 pm
    17 Nov 2008

    This is Too Great an OpportunityBy letting GM fail, the power of the automobile industry would even fade further. This would help speed the transition to high-speed rail, transit and cycling. These are the real climate solution. Now is an excellent opportunity to create real change. Change by doing nothing and letting the auto industry fail.
    http://www.everyoneforever.org/

  12. Andy Stevenson Posted 2:50 am
    19 Nov 2008

    A CAFE driven Bailout is the Only Real AlternativeGiven the terrible state of the auto industry as a whole it is very hard to seriously consider any business as usual solutions coming out of the auto industry. Car sales have fallen from 17mln units in 2006 to a projected 13.3mln units this year making suppy driven solutions extremely challenging.
    Given the number of jobs at stake there is some need to consider all of the options before letting the autos run out of gas and increasing CAFE standards in conjuction with re-tooling incentives can work to yield long term benefits for the US taxpayer and help keep the US auto flag flying well into the future.
    For more on this please check out "We Can Invest in a CAFE driven Auto Bailout" http://switchboard.nrdc.org/blogs/astevenson/we_can_inves ... ).

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