Apparently, it’s ok for Uncle to
“cheat.”
Not on emissions tests, as VW is being
stoned to death for doing, but on federal fuel efficiency requirements (CAFE,
in Uncle-speak).
Would you believe he is not only going totriple the
“gas guzzler” fines applied to any automaker that doesn’t make the CAFE cut –
the mandatory minimum “fleet average” MPG, which is currently 35.5
MPG – but also that these fines will be applied retroactively –
to the 2015 and 2016 model year – as well as to future model years?
That’s two full model years before the
35.5 MPG mandatory went into effect – and tens of millions of dollars in fines,
just because.
Dirty pool, as Gomez used to say.
But apparently it’s ok when Uncle does it.
And it’s not a proposal. It’s a fatwa.
Done deal.
A “notice” was published in the July 5
Federal Register simply announcing Uncle’s decision (see here).
Technically, it is NHTSA’s
decision.
NHTSA – the National Highway Traffic Safety
Administration – is one of the many federal regulatory “agencies” (as they are
innocuously styled) that operates as alegislature. It issues “rulings”
that have the force of law, even though no one elected NHTSA or the bureaucrats
within. What happens is that Congress passes a vague law – in this case, the
Energy Policy and Conservation Act, way back in 1975 – which alphabet agencies
like NHTSA (and EPA) are then given free reign to interpret.
This little shuck-and-jive allows Congress
to take Grand Stands (we are saving energy!) without being held accountable
for the specifics (new cars must average 35.5 MPG – headed to 54.5 MPG) while
enabling unelected bureaucracies to impose the specifics (you
will be forced to pay heavy fines if those “targets” aren’t met) without any
fear of being held accountable.
It’s a slick con.
Your
congressman or senator can get claps on the campaign trail hollering about the
importance of more “efficient” cars. No one demands specifics from him.
Later on, you read that a bureaucrat whose name you probably never heard – and
whom you’ll never be given the opportunity to vote out of office – has decided
to interpret the law passed by your congressman or senator.
More “efficient” cars now means that every new carwill average 35.5
MPG or else you’ll be hit with a fine.
That’s
right – you.
And me and everyone else who buys the
cars. The “gas guzzler” fines applied for not meeting the decreed CAFE
mandatory minimums are simply folded into the price of the car you just bought.
Or did you think the automakers would
simply absorb the fines as a kind of penance?
Now the fines are to be tripled –
and applied retroactively.
The rate goes up from $5.50 to $14 for each 0.1
MPG that any automaker falls short of the “target,” as Uncle innocuously styles
it. In fact it is a mandate. And the mandate just got a lot
more expensive. Possibly catastrophically so.
Which may be on purpose.
NHTSA – a government agency that
doesn’t have to worry about such drudgeries as balancing its books because it
can simply take (via Congress) more of our money to finance
its operations – may not grok that car companies do have to
balance their books, have to convince people to buy what they
are selling; cannot simply jack up the sticker price and shove their hands into
people’s pockets and take what they feel like taking.
If this tripling of CAFE fines stands, it
is probably going to put several car companies that are already in trouble into
an unrecoverable spin.
Under the old fatwa –
noncompliance with the lower (30.2 MPG “combined”) CAFE mandatory minimum –
Jaguar Land Rover was socked with in excess of $46 million in “gas guzzler” fines
over the period 2010-2014 alone – all of that passed on to its
customers. Of which there are fewer because of the fines.
Jaguar Land Rover is a
relatively small automaker that sells no “efficient” cars to boost
its overall CAFE numbers – so the costs it must pass on to its customers (in
the form of higher sticker prices) are proportionately higher than the
costs born (and passed on) by rivals like BMW or Mercedes, which score better
on CAFE because they sell some relatively “efficient” models whose MPG numbers
offset the not-so-great MPG numbers of the others.
Even so, they, too, fork over millions – and have
to charge customers millions, to make up for what Uncle grabs
Even Fiat – which only sells
“efficient” cars – is forced to pay millions to Uncle, which the
company recovers by charging its customers more for every car they
buy.
And
now the fines are going to triple.
And the CAFE fatwa is set
to nearly double – to 54.5 MPG by model year 2025, just nine
years away.
It is not an
exaggeration to state that this could destroy the car industry by making it literally
not possible to sell cars at a price people are not merely willing but able to
pay. There is not one currently available new car – not even the Prius hybrid –
that averages 54.5 MPG.
Consider what this means.
Unless – via unicorn farts, perhaps – a way
is found to build cars that average 54.5 MPG less than ten years hence,
every company selling cars that don’t average 54.5 MPG will be hit with triple
the current “gas guzzler” fines. It will mean the certain extinction
of most car types currently available, including mid-sized and larger
sedans and especially SUVs and larger crossover SUVs, most of which don’t
even come within spitting distance of the current 35.5 MPGfatwa.
And 54.5 MPG? As Tony Soprano used to say,
forget about it!
But this business of ex post facto’ing the
car industry is beyond egregious. It’s one thing for an unelected,
unaccountable government bureaucracy to simply decree that next year or the
year after that or nine years from now every car company’s roster of cars
must average at least 35.5 MPG (the current, upticked standard – which went
into effectthis year) and something else to decree that the
standard that was in effect last year no longer applies – and
that a new standard will be applied retroactively.
This is tyrannical.
The trade publication Automotive
News quoted a car industry executive – who wished to remain anonymous
for the obvious reason that any government which engages in re-writing laws and
applying punishment retroactively is a mafia and
capable of anything – as follows:
“The most disturbing thing about it is that
essentially no notice was given… you make your regulatory plans based on a
certain set of assumptions. To have it change suddenly without notice and
without the ability to respond is really troubling.”
Indeed.
What’s next? Fining companies that sold
cars without air bags before the air bag mandate went into
effect?
It would not surprise me.
To recall and paraphrase the immortal words
of Richard Nixon: When an unaccountable, unelected federal agency does
it, it’s not illegal.
Let alone “cheating.”
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