Car Guys vs. Bean Counters - Bob Lutz - Part 2

Posted On: Wednesday - November 6th 2019 11:00AM MST
In Topics: 
  Cheap China-made Crap  US Feral Government  Environmental Stupidity  Books  Big-Biz Stupidity

I'll continue right where I left off yesterday.

You can't even get THIS color anymore!

The Japanese automakers had always made vehicles on the smaller side for their market, just as the Europeans did (for the most part) for 2 big reasons:

1) These places have always been more crowded than the US by far.
2) Gas is taxed so much more than it is, even now, in the US.

Due partly to the lack of contentious unions, but also due to a different mindset of the Japanese management, the quality of the Japanese autos had well-surpassed that of the American cars. We've all heard stories about "don't buy a car made on a Monday or Friday" and the purposeful sabotage of quality during union troubles. I can remember hearing that guys on the auto lines in Detroit were making $17/hour in the late 1970's and being AMAZED at that - minimum wage was $2.85 or so!

Therefore, when this gas "crisis"* hit the first time, the Japanese were just in a great position. Mr. Lutz writes lots about the bias toward foreign makers and the vilification of the US automakers for being these polluting, wasteful bastards. This was back when we worried about emissions of ACTUAL pollutants, such as the Nitrous Oxides from inefficient combustion, and the particulate matter that made 70's vehicles visible across 10 miles of California desert via their smoke clouds alone. I agree with Mr. Lutz on some of this. Eric Peters on his great Auto/Libertarian blog Eric Peters Autos**, mentioned how especially Consumer Reports used to bad-mouth American car companies and completely biased in their ratings system.

However, it was the US Government that was the big problem for the big 4 (at the time) American automakers. The authoritative C.A.F.E. standards (Corporate Average Fuel Economy) on fuel mileage were a Soviet-era method of trying to force gas mileage up against the wishes of consumers. Buyers could read the mileage numbers and choose for themselves. Nope, but Big Gov. forced these companies into a very expensive re-tooling, putting them at a serious disadvantage against the foreign companies.

Now, here's one weak part of Mr. Lutz's track where he went off the rails. What was his suggested solution, per Car Guys vs Bean Counters? Raise the gas tax, massively, to force people to drive less! Now, keep in mind that this guy was an auto executive for 47 years, much of this when America was a fairly free-market society. I guess his MBA from Berkeley*** did not preclude any forays into deep stupidity. Yeah, he's a car guy, but all for a huge tax on gasoline?! Really? Screw that. I'm glad nobody listened to him on that score.

The C.A.F.E. government meddling just caused the US companies to build cars that were not optimal and didn't make a lot of money, to bring their gas mileage averages up, while they made money off the big vehicles. A slightly different loophole was what started the SUV craze in roughly the end of the 1980s and through the long gas price ramp-up (Part 2) through summer '08. See, built upon truck-type frames, the SUVs (till possibly the modern crossovers) were counted as trucks, and therefore not counted in that average-mileage standard required (and upped continually) by the C.A.F.E. law. What a break, indeed! The gas had been down and steady for > 1/2 a decade already, people loved these vehicles, and the auto companies made much more profit per unit on them. Per Bob Lutz, at least, the Japanese automakers could never compete well with the American SUVs, as far as tastes go - remember he was a "car guy", meaning all about style.

After discussing other causes of the decrease in competitiveness of the US automakers vs. Japanese and European (still early on in the book) including union troubles, massive pension obligation, etc., Mr. Lutz gets to a couple of issues dear to the heart here at Peak Stupidity. On the bad press against the US companies, the author rails on the stupidity and bias of the journalists. Hey, you're preaching to the choir here, Bob. He then gets into the Global Climate Stupidity business, with digs at Al Gore and a pretty reasonable take in one direction - just the almost-negligible amount of "excess" CO2 emitted from autos - only one factor, but not bad for a non-math guy. In fact, going by the wiki article on Bob Lutz linked-to in one footnote here, Mr. Lutz is still against the Global Climate DisruptionTM religion (his term too). Let me put it this way: I don't think young Greta Thunberg is ever gonna make it as one of those models that sits on the hood of the concept car at the next Detroit auto show!

Then there is the author's hilarious take on the Saab owners, a company General Motors bought in 1989 and finally sold in 2010... it then went bankrupt. Mr. Lutz knows his marketing, and the 100,000 units sold yearly by Saab was a number that he figured couldn't be raised to bring an economy of scale just due to the eclectic group of buyers that were the only people that liked them. They really liked Saabs though, but were too small a market:
If you add up all the professors of sociology and political science, all the leftish intellectuals who admired the failed Swedish experiment in 90 percent tax rates and womb-to-tomb welfare, all the well-to-do who for some reason eschewed Mercedes, BMG, and Audi, you still couldn't get 150,000 sales.
Haha! After this, I forgave Bob Lutz for that "raise the gas tax" crap.

Well, I can't get into this many details and finish this thing anytime soon, so Peak Stupidity will finish this review tomorrow, with a real wrap of of the gist of Bob Lutz's them of "Car guys" vs "Bean Counters". Spoiler alert - there's a big contradiction by the end of the book.

* It was just a political thing more than the "crisis" it seemed, as in "OMG! We are running out of oil!" Granted, with the gas station lines and odd/even day purchasing, it did seem like a crisis at the time.

** I haven't read it regularly in 3 years or more, but I should get back to it. It was good reading, and he had decent commenters when I used to keep up with it.

*** This should have been in the first post, but wiki has this biography of Bob Lutz.

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