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Ford loses by winning

One of the reasons why I haven't been blogging recently, I think, has to do with my apartment. Right now, it hasn't got a lot of furniture, and I don't have a lamp for the table where I usually sit to work with my computer. The place just doesn't feel like home yet, so I've been spending most of my non-working time in coffeeshops. It's just been easier to sit and read, rather than blog.

But I've got to say something about the announcement that Ford is cutting production in the face of what it insists are surprisingly high gasoline prices. Surprising? The NYT times article appropriately quotes an analyst who ridicules that notion: "they might say nobody could see it coming; well, nobody but everyone in the world." This talk of "surprisingly" high gas prices is pure CYA from Ford.

But the real point I'd like to make is this: Ford's competitive disadvantage in the market for fuel-efficient cars is in part a product of its own success at resisting government regulation. It was Ford, and the other American carmakers, who have fought tooth and nail against any increase in the corporate average fuel economy (or CAFE) standards, and who have gotten what they've asked for from the compliant administration of George W. Bush. Now that gas is over $3 a gallon (not a surprising thing), the market is eating Ford's gas-guzzling fleet of pickups and SUVs alive. Ford would probably be in a better competitive position vis-a-vis Toyota if the government had gotten serious about improving domestic fuel efficiency.

Frankly, I laugh when I read about Ford's troubles selling cars. The problem is, it's no laughing matter for Ford's workers, who ought to worry about layoffs like Ford should have worried about higher gas prices. And next time, hopefully, the industry's anti-regulation lobbying efforts won't be so successful.

Comments

I agree - I don't know what's wrong with American automakers. As far as your furniture situation goes, think IKEA for cheap, apartment sized, minimalistic type furniture.

Yeah, I need a trip to IKEA badly. That and about $1000 to spend on furniture...

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