A Perverse Auto Policy (National Review, 06.28.10)

Posted by hpayne on June 28, 2010

Detroit – With Big Government and Big Auto joined at the hip these days, it’s no coincidence that auto execs sound like babbling, bearded tree-huggers when glorifying the greening of the automobile.

But beyond the TV microphones, industry experts understand the contradiction of trying to nurse Detroit automakers back to health and at the same time forcing them to make unprofitable small cars through mpg mandates. Indeed, GM and Chrysler are both benefiting from cheap gas which has ramped up demand for their big SUVs, even as they are pouring millions of taxpayer dollars into little green cars that taxpayers don’t want to buy.

“That’s perverse,” veteran industry consultant Joseph Phillippi tells the Detroit Free Press. “I say perverse in the sense that we want gasoline prices to go up so we can be successful selling a [small Chevy] car that we make maybe 25 percent of the variable gross profit that you make on the [big Chevy] Tahoe.”

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