Ford's Mulally quietly meets with Congress on fuel bill

[suv_guy_19]

Detroit News, WASHINGTON

[rmc523]

Detroit News, WASHINGTON

 

Interesting...

[BlackHorse]

Run up there and tell them you want another 50 cents a gallon in taxes tacked on Mulehead.

[ShockFX]

Run up there and tell them you want another 50 cents a gallon in taxes tacked on Mulehead.

 

Huh?

[Noah Harbinger]

Huh?

 

A while ago Mulally said that the best way to reduce gas consumption and get people to buy more fuel efficient cars is to make people want to buy less gas. The only way to do that is to make gas more expensive, i.e. raise gas taxes.

[jpd80]

Mulally has an angle all right - get everyone else to pay.

No better plan than shifting the costs back onto the consumer.

A neat way for companies to avoid cost burdens associated with inceasing CAFE is to force people

to buy more fuel efficient vehicles (read one size down) then car companies save spending billions making bigger cars more efficient.

[Noah Harbinger]

Mulally has an angle all right - get everyone else to pay.

No better plan than shifting the costs back onto the consumer.

A neat way for companies to avoid cost burdens associated with inceasing CAFE is to force people

to buy more fuel efficient vehicles (read one size down) then car companies save spending billions making bigger cars more efficient.

 

I don't think that's true. If people have to pay more for gas, they won't buy the bigger cars anyway, so they're either going to lose any hope of profit on larger cars, or make them more efficient anyway. Take as evidence what happened over the last few years as gas prices rose.

 

But if the fuel economy figures that have been dribbling out about the TF (40 MPG highway, 30 MPG City Fusion!) are anywhere near true, Ford should have no problem meeting future CAFE.

[Ford Jellymoulds]

A while ago Mulally said that the best way to reduce gas consumption and get people to buy more fuel efficient cars is to make people want to buy less gas. The only way to do that is to make gas more expensive, i.e. raise gas taxes.

 

With oil at $92 a barrel, its going to make good sense to have good MPG thoughout the entire Ford range of vehicles.

 

Oil reaches $92

http://www.ft.com/cms/s/0/3295e522-8388-11...?nclick_check=1

[Deanh]

A while ago Mulally said that the best way to reduce gas consumption and get people to buy more fuel efficient cars is to make people want to buy less gas. The only way to do that is to make gas more expensive, i.e. raise gas taxes.

how about making smaller more fuel efficient cars MORE DESIRABLE than monstrosities like the 08 Focus?

[focus05]

If this CAFE bill passes (but regardless, some CAFE bill will), consumers would pay anyway as the auto companies invest extra billions to meet the standards. That money won't come from their charity - it will get added to the bottom line. If people avoid buying these more expensive cars and car sales here tank, you can expect economic problems form the layoffs that will follow. much worse than paying an extra $200 a year to gas up your Focus or $500 to gas up your Expedition.

 

From an economic perspective, I'd rather they tax gas than put useless CAFE standards on our cars. The point shouldn't be to constrict supply but to change demand.

[RichardJensen]

No better plan than shifting the costs back onto the consumer.

Consumer -always- pays.

 

Whether it's at the pump in higher gas taxes, or higher prices for new cars. The consumer always pays.

 

Mulally's point was that if you want to reduce consumption, you increase the price of the product.

 

You don't force a third party (e.g. a manufacturer) to use less of the product. As that does nothing to directly impact demand.

[BORG]

Either the customer chooses to buy the vehicle they want (and the gas for it), or they have no choice at all. That is what is at stake with this outrageous bill. The market is self-regulatory, people can only afford to spend so much on gas and the automakers adapt to those needs. Gas is NOT getting any cheaper by 2020! Ford will have to eliminate its entire truck line to comply with this bill, it's ludicrous! I'd rather have a hike in gas tax over this sort of bill. I'm with Mulally on this, the consumer can make the choice.

[matthewq4b]

With oil at $92 a barrel, its going to make good sense to have good MPG thoughout the entire Ford range of vehicles.

 

Oil reaches $92

http://www.ft.com/cms/s/0/3295e522-8388-11...?nclick_check=1

 

 

Yup we are not far off that $100 a barrel mark. And it is only going to climb higher. This is not the end yet.

This should get every one's goat up. Alberta has drastically scaled back conventional Oil production. The Conventional oil sector here is in the midst of recession. With almost no exploration or drilling going on. Ha go figure that one out. I can not even count the number wells in the Lloyd area that are sitting idle not producing

 

I'm still not convinced a gas tax is the best way to go. It certainly is the cheapest solution for the manufactuers. The price of Gasoline is going to rise all on it's own in the U.S. with the weakening U.S dollar. And with the ever stronger Canadian dollar (it hit $1.04 U.S today) and te fact that Canada is the U.S's largest supplier the refiners are paying more U.S dollars for crude.

 

 

So expect to see the price of motor fuels in the U.S start climbing here fairly shortly.

 

 

Matthew

Edited October 26, 2007 by matthewq4b

[akirby]

how about making smaller more fuel efficient cars MORE DESIRABLE than monstrosities like the 08 Focus?

 

The problem is regardless of the laws or regulations - you can't FORCE people to buy fuel efficient cars if they don't want them. Ford doesn't want to be stuck in the position of having to make vehicles that people don't want to buy.

 

If the public is demanding and buying smaller more fuel efficient vehicles then that's what the mfrs will build. Supply will follow demand.

 

Mulally doesn't want to raise the gas tax - he just said that if the goal is to sell more fuel efficient cars then the only way to really force that to happen is to make consumers want to buy those types of cars and the only thing that will do that is higher fuel prices - thus the need to impose a larger gas tax.

[Ford Jellymoulds]

The problem is regardless of the laws or regulations - you can't FORCE people to buy fuel efficient cars if they don't want them. Ford doesn't want to be stuck in the position of having to make vehicles that people don't want to buy.

 

If the public is demanding and buying smaller more fuel efficient vehicles then that's what the mfrs will build. Supply will follow demand.

 

Mulally doesn't want to raise the gas tax - he just said that if the goal is to sell more fuel efficient cars then the only way to really force that to happen is to make consumers want to buy those types of cars and the only thing that will do that is higher fuel prices - thus the need to impose a larger gas tax.

 

Buying trends are already changing at the moment, sales of compact cars and small SUVs are the only vehicles sales rising at the moment.

 

[Deanh]

The problem is regardless of the laws or regulations - you can't FORCE people to buy fuel efficient cars if they don't want them. Ford doesn't want to be stuck in the position of having to make vehicles that people don't want to buy.

 

If the public is demanding and buying smaller more fuel efficient vehicles then that's what the mfrs will build. Supply will follow demand.

 

Mulally doesn't want to raise the gas tax - he just said that if the goal is to sell more fuel efficient cars then the only way to really force that to happen is to make consumers want to buy those types of cars and the only thing that will do that is higher fuel prices - thus the need to impose a larger gas tax.

I agree...but people will jump to smaller cars after constantly getting raped at the hands of Oil conglomerates....and THEN what do they do? Thats why we NEED cars like the Verve etc otherwise we can kiss that market goodbye. The demand for smaller and more fuel efficient is kind of already here and responsible for a LOT of Hondas and Toyotas sucess...Ford just missed the boat. Ther WILL always be a market for larger vehicles as well for those that can afford them...but that market I think will continue to shrink....I personally LOVE smaller cars...for a variety of reasons OTHER than pure fuel efficiency ( although now days THAT is a huge plus ) did i buy one of Fords efforts...NO...that had nothing that was even remotely desirable....thus my point.......

[ShockFX]

I agree...but people will jump to smaller cars after constantly getting raped at the hands of Oil conglomerates....and THEN what do they do? Thats why we NEED cars like the Verve etc otherwise we can kiss that market goodbye. The demand for smaller and more fuel efficient is kind of already here and responsible for a LOT of Hondas and Toyotas sucess...Ford just missed the boat. Ther WILL always be a market for larger vehicles as well for those that can afford them...but that market I think will continue to shrink....I personally LOVE smaller cars...for a variety of reasons OTHER than pure fuel efficiency ( although now days THAT is a huge plus ) did i buy one of Fords efforts...NO...that had nothing that was even remotely desirable....thus my point.......

 

Oil conglomerates aren't the reason oil prices are high.

[Deanh]

Oil conglomerates aren't the reason oil prices are high.

yeah right, they have absolutely nothing to do with it posting all those HUGE profits they are posting, along with propane price fixing etc......totally innocent with VERY long noses that make Pinnochio look like a learning curve.............

[ShockFX]

yeah right, they have absolutely nothing to do with it posting all those HUGE profits they are posting, along with propane price fixing etc......totally innocent with VERY long noses that make Pinnochio look like a learning curve.............

 

Let's see, if Oil doubles, the revenue of the oil company doubles. At the exact same profit margins, this means profit doubles. Actually, it might more than double, since you don't have to pay out fixed costs again. Should the oil companies lower profit margins? What about when oil was only $10 a barrel?

 

Oil prices are up because of the weakening dollar (oil is priced in dollars) and demand from China/India. Try to know what you are talking about before you open your mouth.

[matthewq4b]

Let's see, if Oil doubles, the revenue of the oil company doubles. At the exact same profit margins, this means profit doubles. Actually, it might more than double, since you don't have to pay out fixed costs again. Should the oil companies lower profit margins? What about when oil was only $10 a barrel?

 

Oil prices are up because of the weakening dollar (oil is priced in dollars) and demand from China/India. Try to know what you are talking about before you open your mouth.

 

 

If the price of oil doubles the producers profits increase by more then double. As their costs are fixed.

If it cost $5 a barrel to get the oil out of the ground and ready to send off to the refinery. It costs them $5 a barrel if Oil sells for 10 bucks a barrel or a $100 a barrel.

 

It is for the refinery's that see the exact same profit margins regradless of price.

 

The Oil Company's you speak of Exxon Mobil Chevron Shell ETC are primarily Producers.

So as oil go's up in price their profit margins go up.

 

 

Matthew

[ShockFX]

If the price of oil doubles the producers profits increase by more then double. As their costs are fixed.

If it cost $5 a barrel to get the oil out of the ground and ready to send off to the refinery. It costs them $5 a barrel if Oil sells for 10 bucks a barrel or a $100 a barrel.

 

It is for the refinery's that see the exact same profit margins regradless of price.

 

The Oil Company's you speak of Exxon Mobil Chevron Shell ETC are primarily Producers.

So as oil go's up in price their profit margins go up.

Matthew

 

Ok, since there are Shell and Exxon gas stations it's close enough. The point is that companies don't lower margins to reduce profits in good times because bad times do happen.

[Deanh]

Let's see, if Oil doubles, the revenue of the oil company doubles. At the exact same profit margins, this means profit doubles. Actually, it might more than double, since you don't have to pay out fixed costs again. Should the oil companies lower profit margins? What about when oil was only $10 a barrel?

 

Oil prices are up because of the weakening dollar (oil is priced in dollars) and demand from China/India. Try to know what you are talking about before you open your mouth.

not saying what YOU say doesn't effect it...but if you think the oil companies have ABSOLUTELY nothing to do with it at all then maybe YOU should remove your head from your ASS and refrain from thinking they are a totally innocent party.......so basically you are saying their profit margins remain totally constant....put the crayons back in the box.....

[Ford Jellymoulds]

With analysts expecting gasoline prices could rise to a never-before-seen $3.50 or $4 a gallon, will $4 a gallon by next spring change the sort of vehicles folk will want to buy as it hits a record breaking $92 today?

http://www.reuters.com/article/reutersEdge...544101020071015

Edited October 26, 2007 by Ford Jellymoulds

[ShockFX]

not saying what YOU say doesn't effect it...but if you think the oil companies have ABSOLUTELY nothing to do with it at all then maybe YOU should remove your head from your ASS and refrain from thinking they are a totally innocent party.......so basically you are saying their profit margins remain totally constant....put the crayons back in the box.....

 

I can't put the crayons back until I've filled in all the areas on my diplomas.

 

I'm saying oil companies aren't jacking up prices because the global market sets the prices. You don't think that Exxon would pump more oil at $90 a barrel if they could? Daily global production might no longer be high enough given the demand.

 

Also, over time the fixed cost per barrel of oil rises. Once you get all the easy oil out you have to get the rest out and it's more cost intensive.

[jonas1022]

Buying trends are already changing at the moment, sales of compact cars and small SUVs are the only vehicles sales rising at the moment.

 

Amen to that. And if energy costs rise the price of everything rises. Hence, INFLATION.