THE AUTOEXTREMIST

July 29, 2009

The Immaculate Dispensation.

By Peter M. De Lorenzo

(Posted 7/28, 11:45am) Detroit. Somewhere over in the Fatherland there are guffaws of laughter emanating from conference rooms at BMW and Mercedes-Benz, because the U.S. Government is about to green-light a provision (nicknamed “The German Provision” by the lobbyist community in Washington, according to the Wall Street Journal) – as part of a plan to curb greenhouse gas emissions – to allow auto companies that sell fewer than 400,000 units in the U.S. market to have easier targets to meet, so as not to impede their ability to do business here.

The problem is, of course, that high-volume auto manufacturers like Ford, GM and Toyota – the ones who have to field a lot of different entries in this market covering a wide swath of segments – will have to conform to the more stringent standards.

The German manufacturers argue that the U.S. emissions rules – without the “provision” – would be unfair to them, because they basically make the big, powerful and luxurious high-performance automobiles that many American consumers lust after, and they don’t have models in the lower segments to help offset their carbon footprint or help their overall fuel economy performance. And “the provision” would allow them to offer a limited amount of these vehicles for sale.

This has all come about because the E.P.A has eliminated the option for automakers who don’t meet the mileage standards to pay fines – the German manufacturers paid over $75 million over the previous two years – which will make a huge difference in the realities of the way the car business is conducted here.

Under the old way of doing business, the government would dole out fines to manufacturers who weren’t able to meet the gas mileage standards, and then the manufacturers would “bake” the fines into their pricing structures. And consumers with the means and the desire to own such machines would then pay the “gas guzzler” tax. In other words, the manufacturers got to do business here, the fines were paid – by the manufacturer and the consumer – and enthusiast drivers were able to acquire the high-performance machines that they wanted to drive. It also allowed consumers to have the option of purchasing such exotics as Ferrari, Lamborghini and other Etceterinis over here (something which I’m all in favor of, by the way).

The new way of playing the mileage/emissions game as rendered by the current administration – without the fine structure in place – puts an unfair burden on the volume manufacturers, and “the provision” or, as I like to call it – the Immaculate Dispensation – sets up a grossly unfair situation where select import manufacturers can operate with impunity in this market, giving them a clearcut, unfair advantage.

What’s wrong with this picture? Everything, actually. That our government would willingly put our domestic manufacturers – two of which they own now by the way, in case anyone forgot – at any kind of a competitive disadvantage after all this industry has been through in the last nine months and all the taxpayer money that has been expended is almost unfathomable and at the very least unconscionable. This is the best these braniacs can come up with?

What a bunch of Bush-League Bullshit.

How can replacing one fairly cut and dried solution – if you want high-performance and luxury, then you’ll to have to pay a premium for it - with a blatantly backroom-engineered loophole - we'll favor some manufacturers over others even though it's going to piss everybody off and put our own manufacturers at a disadvantage - seem like the better idea?

Putting all of this in perspective, one of the reasons we live in this country is to partake in the freedom of choice, which extends to the vehicles we drive as well. Now some green-tinged among us in this nation would dearly love it if that option was taken away from us - so that we can then be told what’s “acceptable” for us to drive in terms of our transportation choices - but I can safely say that attitude is not shared by the majority of Americans who live in a world that’s at least somewhat based on a shred of reality.

It’s real simple, actually. Our government should eliminate the “German provision” aka the “Immaculate Dispensation” and institute one rule for all. And that rule should state the following: “The fuel economy standards for cars and trucks in this country are not merely a suggestion. We are realistic enough to know, however, that exceptions can and should be made to accommodate the wishes and desires of the populace that wants to enjoy the freedom to choose what’s best for their individual transportation needs. In that case, we will apply the following fine structure to the manufacturers who wish to selectively participate, and a “driver’s premium” for those consumers who wish to partake of these more diverse vehicles...”

Is it really that hard? I don’t think so, but somehow when allegedly well-meaning bureaucrats get involved things inevitably get all mucked-up.

Thanks for listening.

See another live episode of "Autoline After Hours" hosted by Autoline Detroit's John McElroy, with Peter De Lorenzo and friends this Thursday evening, July 30, at 7:00PM EDT at www.autolinedetroit.tv.

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