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Tuesday, June 03, 2008

THE SUV IS DOA

I pause to mourn the death of a true Fat Bastard; R.I.P. the S.U.V. You’ve been on life support for the last decade, living in a Bush denial bubble where there were no insurgents in Iraq, rich people were not selling out their nation for a tax cut, and we could drill ourselves out of the oil-hole we’ve drilled ourselves into. And as the bloated body of the Sport Utility Vehicle goes down for the third time allow me to point out that it was rarely sporty, never utilitarian and barely mobile enough to qualify as a vehicle unless soaked in gasoline. So, farewell you Fat Farce: you will be missed the way most binges are missed, with a hangover and no clear memory of all the fun we thought we were having.
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The Chairman of GM, the number one US car maker, announced this morning that thanks to their addiction to SUV’s they lost $3.3 billion in just the first quarter of this year. So they are closing four plants that make SUV’s and light trucks, in Moraine, Ohio, Janesville, Wisconsin, Oshawa, Canada and Toluca, Mexico, and they are “looking at ways” to dump the entire line of Hummers, basically a line of tanks with backup lights. According to Carlos Gomes, the senior economists at Bank of Nova Scotia, “…current gasoline costs are soaking up a record 4.5% of US disposable income – causing SUV sales to drop 28%.” And according to CNW Marketing Research a used SUV took 66 days to sell in April, even when discounted 20% below Blue Book value. In May, according to the Power Information Network, 40% of people who traded in their SUV owed more than the vehicle was worth! Right now a 3 year old SUV is worth $3,000 less than a similar 3 year old SUV was worth a year ago. How the hell did this happen? The answer is simple; stupidity.
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We’ve been on CAFE rich diet (Café being the Corporate (Fleet) Average Fuel Economy Standard for auto manufacturers, which has been stuck at 27mpg for the last 17 years), and our economic arteries have been plugged with political plaque. We were lucky we are just having a heart attack. We could have produced a Chest-Buster out of “Alien”, and we still might, if we keep dragging our feet. Late last year the barely Democratic Congress (and the courts) finally forced Georgie-Porky Bush to accept improved CAFÉ standards to 35 mpg, but not till the year 2020. Besides, the really massive gas guzzlers are exempt from CAFÉ requirements (and you get a big juicy tax write-off for buying one) if your SUV has 4-wheel drive or weighs more than 3 tons, or can carry 10 people, or if the passenger area can be converted into a flat bed cargo area with some simple tools, like a hacksaw and a sledge hammer and an acetylene torch. And even then the rest of the industrialized world has CAFEs standards twice as high as the U.S. This Bush-denial binge wasn’t just about getting really drunk, we got really drunk in a whore house, at whore house prices and the GOP was our madam du jour.
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Consider that the National Transportation Department is required by law to judge CAFÉ standards by four criteria, the last and least important of which is the “…Need of the nation to conserve energy,.” in retrospect it would appear that this fuel guzzling agenda constituted a “Clear and Present Danger” to our national security. But the eco-terrorists who were busy burning down Mc-Mansions in Vale never crouched their arguments in those terms, leaving patriotism to the right-wing-nuts. And then consider that the 2007 Ford Explorer gets only 14 mpg in the city and 20 mpg on the Interstate, but that has to be lowered somewhat because the old MPG’s were gauged without running the air conditioner, which drops the mileage to 13 and 18 mpg, which, at the moment, costs you another eight to sixteen dollars for every mile you drive. And then consider that you don’t drive on a smooth treadmill, as the vehicles being tested do, but on real roads that the “No New Taxes Economy” have left pot-holed and crack filled since the Bush One Era. We reached our best fuel conservation in 1987 (at 26 mpg), when the Democrats were still running Congress, and under them our national energy policy was then re-defined by the United Auto Workers and the Detroit Big Three; GM, Ford and Chrysler.
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But thanks to the Big Three paying off Congressmen rather than engineers and innovators they peaked with sales of 17.4 million vehicles in 2000, the year the Bush-Denial train left the station, and now, seven years later, this year they will sell less than 15 million cars, trucks and SUV’s. At this year’ Detroit Auto Show Dodge rounded up 120 longhorns to promote their new pick-up, and so many frightened cattle started mounting other frightened cattle that one sage dubbed it the “Brokeback Pickup”. It’s not the image Detroit has been wanting to sell, but it’s the image they are stuck with.
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Since 2000 Detroit has dropped more than a quarter of a million employees, and $67 billion in losses too. The other thing rising in the American auto industry is its weight, up from 3,200 lbs average vehicle weight in 1987 to 4,066 lbs average this year. So Detroit is caught with an old fat flabby fleet while the Asians and Europeans are feeding off her corpse. We should find what business school graduated these geniuses of American industry, close and burn it down. And spread salt on the ashes.
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Instead it is the workers who will pay the full price for management stupidity, while management types walk away with golden parachutes, after having given the hourly workers a golden shower. It ain’t like these geniuses were not warned that doomsday was coming, or the shape it would appear in. And maybe the scariest item of this long depressing list of scary things is that the Commodity Futures Trading Commission reports that large speculators are dumping their oil futures by 48%. Because this is not a 60% reversal, it hints that the cost of oil may have peaked, but that it ain’t going very far down anytime soon.
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We have entered the age of expensive oil. And we are there to stay. I can’t say for certain what that new world is going to look like, but one thing I know for certain, it ain’t going to have any SUV’s in it. And there is enough blame for that fiasco to lay a little on every one of us.

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