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automakers must be liberated from CAFE fuel economy laws that arbitrarily dictate what kind of cars they must sell, forcing them to sell millions of small cars that have no chance of profitability given consumer preferences This is baffling. 'Consumer preferences' lead to lots of small cars being bought every year, most of them just happen to be made by non-US companies. The profit margin on smaller cars is smaller, as well (luxury cars have the largest profit margin), but I don't believe that Toyota or Honda are losing money on every Corolla or Civic sold. They also seem to be doing OK in meeting fuel economy laws. The real question is why US automakers don't make competitive small cars. One answer is the cost of labor in the US, but the other answer is that US automakers don't have a compelling process in place that continuously refines a small car until it does what the market wants. Look at the aforementioned Civic, for instance. Its original form came on the market in 1973, and its current larger form in 1996. Even the 70s version had a high build quality and was renowned for its reliability, but every subsequent iteration has, arguably, been refined and worked on to make it more and more palatable to the American market (the European Civics are different, FWIW). Now look at US car makers. Which small US car has been marketed under the same name since the early 70s and refined every few years, meeting market demand and giving consumers what they want? US auto makers seem obsessed with re-badging and re-marketing their cars every few years, often to cover up memories of unsuccessful or embarrassing prior launches. The worst example is perhaps the Ford Taurus, which sold bucketloads in the full-size sedan segment in the 80s and 90s. So of course Ford took the Taurus out of their segment in '04 and replaced it with a smaller AND a larger sedan (the Fusion and the 500). Imagine Honda discontinuing the Accord next year and replacing it with a larger AND a smaller sedan (rather than making the Accord a bit larger, which they did last year... and five years ago). To nobody's surprise, the 500 flopped and was hastily renamed back to 'Taurus' for the '09/'10 year (there were some technical reasons, too). The auto industry must also be liberated from the Wagner Act There are car production plants on US soil that make perfectly good cars, using non-unionized American workers. The auto industry is already liberated from the Wagner Act. |