Diary

Obama administration say one thing do another - auto industry edition

We’ve heard it before. Last month, as the Federal Government was becoming an 8 percent owner of Chrysler and 50 percent owner of General Motors, President Obama feigned disinterest:

I don’t want to run auto companies. I’m not an auto engineer. I don’t know how to create an affordable, well-designed plug-in hybrid.

Moments later, Obama revealed his actual intent:

“But I know that, if the Japanese can design an affordable, well-designed hybrid, then, doggone it, the American people should be able to do the same,” he said. “So my job is to ask the auto industry: Why is it you guys can’t do this?”

So we shouldn’t be surprised when President Obama’s Energy Secretary, Steven Chu, goes to Iowa and says:

All cars made in America should be able to burn ethanol (E85).

Chu made the E85 statement yesterday, even though he has previously admitted that, corn is not the right crop for biofuels.”

Earlier this month, Secretary Chu said electric vehicles were “inevitable.”

Chu’s promotion of E85 capability seems to be driven by the low cost of making a standard internal combustion engine vehicle able to burn the biofuel:

I’ve been told it costs about $100 in gaskets and fuel lines to turn a car so that it can go all the way to E85. But a new car, it would only cost $100 out of $15,000. Wouldn’t it be nice to put in those fuel lines and gaskets so that we can use any ratio we wanted?

Of course Chu tried to obfuscate and stated the Obama administration is not yet ready to “mandate” any flex-fuel capability:

Chu said federal officials have discussed the idea with auto industry
executives but have stopped short of saying the Obama administration would
require the companies to build all vehicles as flex-fuel-ready.

Secretary Chu, like President Obama, knows little the costs of designing and building cars. A hundred dollars per car is a  huge manufacturing expense. An auto industry association spokesman said that to equip new cars with E85 capability would cost carmakers more than $1 billion. A fact that seems to mean little to Obama and Chu. After all, it is our money not theirs. The federal government has no business owning or running a car manufacturer.

It’s bad enough that there is nothing we can do as Obama throws billions and billions of dollars borrowed in our names in order to bailout of some of his union supporters. It is even worse that neither Obama or Chu seem to understand that when the entity that is paying to keep your auto company on life support, suggests something, like making new cars E85 capable, it has away of becoming a mandate. Or do they?