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Sunday Forum: Kick the car makers
Congress should raise fuel-economy standards to save the U.S. auto industry from itself -- and it would help with global warming and energy dependence, too, says auto dealer ADAM LEE
Sunday, August 05, 2007

My grandfather had an old Yiddish curse: "May you have a large business and what people want, you should never have, and what you have to sell, people will never want to buy."


Adam Lee is the president of Lee Automalls, which sells cars at various dealerships in Maine (amlee.leeautomalls@gmail.com).


As a third-generation car dealer whose livelihood depends on the success of the American auto industry, I feel as if I am living that curse. When colleagues ask, "How's business?" my new standard response is, "Thank God for our Toyota, Nissan and Honda dealerships."

Things are so bad for U.S. auto makers that Edmunds.com, the automotive Web site, reported last week that their share of U.S. sales has fallen below 50 percent for the first time in history.

Health-care issues, legacy costs, aging plants and union contracts are critical challenges for the Detroit 3. But they are losing market share because they do not have the vehicles that consumers want and need. The gas-guzzling cars and trucks the Detroit 3 bet their -- and my -- future on are not selling.

The domestic auto makers assumed cheap gas would flow forever. As a dealer, I can attest, as the price of gasoline has gone up, we have been offering bigger and bigger discounts and incentives in a desperate attempt to move SUVs and truck off our lots. And we have watched our profits erode.

Edmunds estimates that the three Detroit-based auto makers spent a combined $2.6 billion on sales incentives in June. Today I am offering $5,000 to anyone willing to buy a Dodge Ram. If auto makers had invested even a third of their sales-incentive money in fuel-saving technology, I would be selling many more Dodge Rams at much larger profits. The technology already exists -- I know because I see it in the imports we sell.

So what are consumers buying? Hybrid sales are up 93 percent over a year ago. While hybrids are still a small segment of the market, this meteoric rise is a pretty good indication that consumers want cleaner, more fuel-efficient cars than the Detroit 3 are offering. At our hybrid dealership, we sell foreign cars that get 45 to 60 miles per gallon and pollute very little. They are more expensive than nonhybrids, but consumers are willing to pay for them. As gasoline moves well past $2.50 a gallon, those cars are becoming more economical. If we had a Jeep hybrid or a Ford Focus with a diesel hybrid, we would have customers lining up to buy them.

I know that a mandated fuel-economy standard of 35 mpg by 2018, as proposed by U.S. Reps. Edward Markey, D-Mass., and Todd Platts, R-Pa., is the key to survival for my industry. Unlike other alternatives floating in Washington, this standard would push domestic auto makers to build the fuel-efficient cars and trucks consumers want and will buy, and guarantee the oil savings our country needs. If our auto makers had been forced to live up to stricter emissions and higher corporate average fuel-economy standards 10 years ago, they would not be in dire straits now.

It isn't easy to go up against the very manufacturers I represent but I am ashamed of my own industry. Growing up in the car business, I watched as auto makers spent billons to fight important health and safety improvements. From seat belts to air bags, they sounded the same old false alarm of financial ruin and competitive disadvantage. They even went so far as to say that new technologies like catalytic converters and unleaded gas really are not better for us. They are doing it again.

This time the stakes are as high as they get. The combined threats to our national security and environment posed by our ever-increasing consumption of oil make inaction not an option. But left to their own devices, that is exactly what our auto makers would choose. Instead of cobbling together a weak compromise, such as that backed by the industry, which would save only 11 days worth of oil in 2020 and would cause us to use 1 million more barrels a day than the Markey-Platts bill, Congress should enact the strongest possible mandate that guarantees the oil savings and emissions reductions our nation needs. Then Congress should provide the auto makers the government support needed to get there.

Without a strong federal mandate to improve fuel economy, I'm afraid global warming and our dependency on oil will get much worse in the long run. In the short run, I'm afraid I will be stuck with a lot full of cars that no one will buy; or, even worse: This country will no longer have a domestic automobile industry.

First published at PG NOW on August 3, 2007 at 10:53 pm
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