GM addresses Friedman's editorial - Take two

Once again Steven J. Harris, General Motors' VP of Global Communications, has posted on the company's FastLane Blog a response to New York Times columnist Thomas Friedman's most recent op-ed piece on the giant automaker. And again, Harris takes Friedman to task by pointing out that HUMMER sales account for less than half of one percent of vehicle sales in the U.S., and that less than 7,000 H2s have been sold this year and only 138 H1s, the latter of which will be discontinued this month anyway. As we also noted in our a previous post, the rebates GM is offering on 2006 model large SUVs that Mr. Friedman seems to think is a subsidy for gas-guzzling is actually, according to Harris himself, just GM trying to move what's left of last year's model.
While we're with Harris on these first two points, we hesitate to follow him down his path of reasoning that explains the "shameless federal loophole" that Friedman claims many automakers used in the past to make it possible to sell less fuel-efficient vehicles without being penalized by the E.P.A. Harris refers to the "loophole" as a "public policy incentive that actually did what it was supposed to do" and got flex-fuel vehicles on the road. By his reasoning, either the cars or the fuel had to come first, and this legislation paved the way for E85-capable vehicle to be mass-produced. The only reason why ethanol-based fuel hasn't been such a hot commodity until now is because high gas prices are finally encouraging the public to consider alternatives, which wasn't the case 5-10 years ago.

Despite one's feelings about the efficacy of E85, it is a good thing that there's already a fleet of 5 million vehicles on the road ready to accept the alternative fuel as soon as production and distribution catch up with demand. However, Mr. Harris doesn't explain exactly how the aforementioned legislation encouraged his employer and others to produce flex-fuel vehicles. Without knowing exactly what incentive was offered to automakers, it's impossible to judge whether or not the cost of putting FFVs on the road has been worth it.

[Source: GM FastLane Blog]

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