Tuesday, August 14, 2007
This is Usually Tom's Territory...
by Ken Houghton
Yep. That was the problem; they haven't been making enough trucks because they had to make those pesky small cars.
That's why Europe, South America, and Mazda were all profitable in Q1. (I'm not cherry-picking; all areas were profitable Q2.)
Mulally's solution, by the way, is to increase the gas tax so people choose to buy all those European and South American cars that they don't sell here anyway.
...and I hope he'll expand on it later. But I can't let this go by:
[Ford Motor Co. CEO Alan] Mulally said Corporate Average Fuel Economy, or CAFE, standards have done tremendous damage to the U.S. auto industry, without freeing the nation from its dependence on foreign oil or minimizing global warming.
"I have never seen a market-distorting policy like CAFE," Mulally said. "It's a policy that forces you to put out more small cars than there is consumer demand for to make the bigger cars that people really do want. You're trying to force the market instead of being market-driven."
Yep. That was the problem; they haven't been making enough trucks because they had to make those pesky small cars.
That's why Europe, South America, and Mazda were all profitable in Q1. (I'm not cherry-picking; all areas were profitable Q2.)
Mulally's solution, by the way, is to increase the gas tax so people choose to buy all those European and South American cars that they don't sell here anyway.
Labels: Economics, Pigouvian tax, Trains Planes and Automobiles
