Ford hedges on autonomous vehicle timeline, but not commitment

Ford Motor is battling the image of an also-ran in autonomous vehicle (AV) technology. And this reality makes CEO Jim Hackett bristle.

In a recent conference call to discuss Ford’s decent third-quarter earnings, Hackett emphasized that a commitment to autonomous vehicles “is not a question here at Ford at all. It’s something that is really on track and I’m very confident about what it’s going to do for the company.”

2017 Ford Focus:: quality has been terrible for years now. The Focus and Fiesta were recently named by Consumer Reports as among the least reliable vehicles.

Hackett further suggested that competitors might be over-promising when they point to a near-future in which our roads are filled with fully autonomous cars. General Motors and Tesla, for instance, might well find themselves under-delivering – and disappointing customers.

Hackett cautioned that in a “regulatory sense,” fully autonomous vehicles aren’t “really possible yet.”

Most if not all global automakers agree that no one knows when and how regulators around the world will fully adopt standards for the safety and operation of AVs. Beyond that, questions of liability remain unresolved. Who or which entities are responsible in the event of an accident?

On top of that, customer adoption remains a huge question. Who will buy AVs and how much will they be willing to pay? Hackett noted that the smartphone and personal computer industries did not evolve in a “linear” way, so it’s unlikely that the road from here to “smart” cars will be a straight line, either. Progress, it seems, will come in fits and starts, regardless of what AV acolytes and apologists are saying.

Hackett, in fact, appeared to hedge on Ford’s previous commitment to bring autonomous cars to market in 2021. Ford, he noted, is aggressively developing and testing AVs, but he noted that the 2021 launch date was set under his predecessor, Mark Fields. Fields departed Ford with a huge payout earlier this year.

Hackett emphasized that EV technology “is evolving in a non-linear way. And as all you write about it, I see you trying to peg when is it fully smart. And that is a really elusive question.”

Ford’s F-150 is incredibly profitable.

In other words, no hard promises on the AV front — other than a promise that Ford is working on them and is committed to smart cars in general.

That said, added Hackett, the reality of AVs “is not a question here at Ford at all. It’s something that is really on track and I’m very confident about what it’s going to do for the company.”

Ford, of course, is in the early stages of a remake and re-set under new CEO Hackett. He signalled Ford’s new direction/s this month in a long-term strategic plan. Ford has also announced countless senior management changes in recent weeks.

In terms of immediate and tangible progress, October brought mixed results.

Ford’s fully autonomous Fusion Hybrid research vehicle on the streets of Dearborn, Mich.

Consumer Reports hammered Ford in its most recent dependability rankings. The Ford brand placed 15th out of 27 brands, with Lincoln the luxury brand dropping to an embarrassing 22nd. Ford’s Focus and Fiesta small cars were both named among the least reliable vehicles.

On the other hand, Ford’s third quarter results beat analyst expectations. Net income came in at $1.6 billion, well ahead of the same quarter in 2016 (all figures in U.S. dollars). Ford has been diligently and aggressively cutting costs to boost the bottom line.

And the continued strength of the F-150 pickup has had a very good effect on revenue and earnings. The F-150 is truly a beast for rivals to reckon with. Ford said the average F-150 transaction price hit $45,400 per truck in the quarter, up $2,800 from a year ago.

CEO Hackett said the results were solid, but acknowledged the tremendous amount of work ahead. Among them: Ford is essentially the F-Series company. A one-product car company is vulnerable to any number of threats, of course. Worse, Ford posted a loss in Europe and while Ford expects Europe to be profitable in 2017, the returns will not match 2016’s.

Hackett emphasized that Ford is being refashioned into a car company that will compete and win on the global stage, a not so subtle dig at his predecessor in the C-suite. “And I can assure you that we’re committed to transforming our business.”

 

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FCA needs a 21st century car company plan

The marketplace is swirling with rumours and speculation about the future of Fiat Chrysler (FCA). This is bad news for consumers of FCA’s many brands, though it’s highly entertaining for stock watchers and car business aficionados.

Sergio Marchionne, CEO of FCA.

And so…

Rumours and speculation?

Some suggest FCA is anxious to do an IPO/spin-off of its Maserati and Alfa Romeo brands, just as it did with Ferrari in 2015. At least one Chinese automaker appears poised to make a play for the Jeep brand, and perhaps all of FCA. China’s Great Wall Motor has, for one, confirms interest in owning Jeep, an icon of American military might. Enjoy that irony.

So, what would Jeep, Maserati and Alfa together be worth? The smart money suggests more than $35 billion (US). That pile of cash could be used to help what’s left of FCA fund the development of new and desperately needed products and technologies for its mass market brands – Ram, Dodge, Chrysler and Fiat.

FCA, we should not forget, is the product of a combination of the former Fiat and Chrysler Corp. — Chrysler which was rescued out of bankruptcy with the help of loans and other assistance from American and Canadian taxpayers seven years ago. We — you and me — have at least a distant stake in these proceedings; we helped bail Chrysler out and make it palatable for Fiat to swallow whole. And today, well, plenty of Canadian jobs are in play here.

Nonetheless, the hard truth is, FCA needs the capital. The company badly lags behind its competitors in autonomous and electrification technologies. Moreover, FCA’s stable of traditional powertrain technologies are, collectively, mediocre, as well.

What’s happened here is easy to understand. Since bankruptcy, FCA has not invested the funds and effort necessary to keep pace with its rivals in two key technology areas: autonomous drive and electrification.

2018 Alfa Romeo Stelvio: rumours suggest FCA might spin-off or sell its Alfa brand.

To be fair, FCA has used some of its scarce resources to make taxpayers whole. The Netherlands-based company payed off its bailout loans long ago. That’s worth a round of applause.

But paying back taxpayers has come at a price. That is, FCA has lacked a really rich well of resources to invest in research and development — in new product development.

CEO Sergio Marchionne has never conceded this reality, not publicly. Instead, he has long-argued that ALL car companies — not just his — lack the resources to develop the full scope of 21st century advanced technologies — autonomous drive, electrification and so on.

FCA’s rivals dispute that. Late last year, for instance, Daimler AG said it would invest €10 billion to develop at least 10 new EVs by 2015. Ford Motor plans to invest $4.5 billion (US) in electrified vehicles by 2020. Toyota, Honda, Nissan, General Motors, BMW, Hyundai Motor… All the world’s big car companies are sinking huge sums into advanced technologies and services.

FCA has been close to mute about its plans for big investments in electrification and autonomous drive. Instead, Marchionne has energetically advocated technology-sharing among the world’s big automakers. He argues this is a smart cost-saving measure.

Alas, Marchionne has been repeatedly rebuffed in his efforts to build big, sweeping alliances with his rivals – who see proprietary technologies as essential competitive advantages. This seems quite clear: FCA has under-invested in critical high-tech areas, apparently waiting for these alliances to form..

FCA is making a huge mistake here. Goldman Sachs, for instance, argues that by 2025, 25 per cent of cars sold will have electric motors, up from 5.0 per cent today. Most electrified vehicles will be hybrids of some sort. Therefore, automakers must also continue refining the internal combustion engine to make it compliant with increasingly challenging fuel economy and emissions rules around the world.

Carmakers must also search for ways to strip weight out of future models while also meeting tougher safety standards. These efforts across the board are very, very expensive.

The Jeep brand might be worth $27 billion (US) if spun off or sold. At least one Chinese automaker has said it is interested in Jeep.

Meantime, the world’s big automakers are racing to develop autonomous vehicles. Semi-autonomous vehicles are already on the road. Fully autonomous rides are coming fast and some believe fully self-driving cars will be available in the very near future. McKinsey and Co. says that by 2030, once regulatory hurdles are overcome, 15 per cent of all new cars sold will be fully autonomous.

Again, autonomous technology is expensive to develop and implement. It forces car companies to foster and often fund supplier relationships with specialized companies. This explains why all the world’s car companies have a growing presence in Silicon Valley, the information technology heartland. Most observers believe FCA lags its competition here, too.

Now a third major and related trend is ride-sharing. General Motors’ Maven car-sharing service is a perfect example of an area where FCA remains an also-ran. The price tag to nurture ride sharing units and alliances is hefty.

Last year, GM invested $500 million in Lyft, a car-sharing service, for instance. GM is hardly alone. Toyota has invested in Uber, Volkswagen has purchased shares of Gett, and BMW has become a shareholder of carpool-platform Scoop, to name three more rivals.

Ram:pickup: popular and profitable.

FCA and Google’s Waymo unit have entered into a modest deal to test an autonomous ride-sharing service. But FCA has not yet invested in anything with the scope and vision of GM’s Maven. Overall, FCA’s competitors clearly have a significant edge in this area.

Then there is this complication: FCA is in the early stages of planning and executing a leadership succession strategy. CEO Marchionne is expected to depart in 2018.

Marchionne deserves great praise for successfully merging Fiat and Chrysler, making it quite profitable today. But Marchionne’s constant emphasis on the need for mergers and spin-offs — his obsession with deal-making — has been an unwanted distraction for the company.

My point is, the car business demands leaders with a tight focus on today’s operations. Those leaders must also be astute, forward-thinking visionaries who regularly approve multi-billion-dollar investments in future products, technologies and services. I’d argue FCA’s leadership has been under-performing right across the board here.

Take quality. FCA’s consistently miserable performances in all manner of quality studies suggests the company lacks focus on the very fundamentals of the industry.

Indeed, in the latest J.D. Power and Associates long-term Vehicle Dependability Study, the Fiat brand finished dead last with Jeep second-worst among all brand. This result is not an aberration nd it’s inexcusable.

It appears to me that FCA has stalled while leadership has focused on finding cost-sharing deals that have yet to materialize in any substantive way. The company has not adequately invested its own resources in future technologies and alliances. I understand why, but the problem remains.

In any case, FCA appears to be falling further behind its rivals in critical areas. Quality remains a serious problem, too. And, frankly, management looks tired and short of the new ideas, initiatives and energies needed to position FCA in a world of autonomous, connected and electrified vehicles.

FCA’s best play might very well be to sell off Jeep and use that massive windfall to fund product and technology programs right across its remaining brand lineup. There is value to be exploited in the Ram, Chrysler, Dodge and Fiat brands, but only if the products are modern, technologically advanced. I would also argue against selling Maserati and Alfa. Both upscale brands are needed to launch halo products and technologies that filter down and throughout the higher volume brands.

Yes, FCA needs an injection of new, forward-thinking leadership that is fully and completely devoted to the car/light truck/SUV business as it is evolving in the 21st century. Who are those leaders and where will they come from?

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The latest sales numbers: winners and losers in Canada

Canadians gorged on cars and trucks in May, buying a record 216,861 new vehicles, and breaking all previous monthly sales records, notes DesRosiers Automotive Consultants.

Canadians have bought 835,582 new vehicles this year to date, a jump of 4.7 per cent year-on-year. Perhaps it was the wealth effect at play. Statistics Canada reports the economy grew at an annualized rate of 3.7 per cent in the first quarter. As the economy grows, so apparently do car sales.

That’s the big picture. Here’s a closer look at five winners and five losers in Canada’s car market now that the May numbers are in.

Winner 1: Automakers as a whole. May sales were up 11.2 per cent year-on-year, and trucks led the way. Light truck sales were up 16.3 per cent, while passenger car sales nudged up just 2.9 per cent. Trucks now out-sell cars by about 2:1 (141,689 trucks sold, 75,172 cars).

The all-new 2017 F-150 Raptor. Truck sales are surging and the F-Series remains Canada’s most popular vehicle.

Loser 1: Or losers. It’s a short list: BMW (-5.9 per cent), Land Rover (-0.8 per cent), and Volkswagen (-9.9 per cent). Mercedes-Benz and its smart brand landed precisely in the middle, with sales flat, month-on-month.

Winner 2: Here, we have a list of winners, carmakers whose sales simply exploded in May. Honda posted an all-time sales record for May (19,175), with an 11.6 per cent increase over May 2016, notes DesRosiers. FCA, the former Chrysler, reported a monthly sales record with 33,186 units sold. General Motors’ sales exploded, up 35.8 per cent. Other notable sales increases for May, adds DesRosiers: Jaguar (+166.2 per cent), Maserati (+77.9 per cent), Subaru (+17.6 per cent), Ford (+17.4 per cent), Audi (+16.6 per cent), Porsche (+15.7 per cent), and Lexus (+11.9 per cent).

Loser 2: The Jeep brand. FCA is really struggling with Jeep in Canada. Sales in May were down 31 per cent, and they’re off 23 per cent for the year. The Cherokee was off a stunning 64 per cent in May, while the Renegade slipped an almost equally staggering 41 per cent year-on-year.

2017 Chrysler Pacifica Hybrid cutaway. The Pacifica is a minivan success story.

Winner 3: Full-size pickups. Canadians just can’t get enough of them. Ford sold 15,307 F-Series pickups in May, making it the best-selling vehicle in Canada for yet another month. Ram pickup sales were up 62 per cent in May, to 14,990. That’s right. The Ram almost caught Ford’s juggernaut of a pickup.  At General Motors, pickup sales were up 43 per cent year-on-year, led by the Chevrolet Silverado (up 45 per cent) and GMC Sierra (up 43 per cent).

Loser 3: Cars in general, and midsize ones in particular. Sales of the Nissan Altima were off 25.3 per cent and it was a similar story with others in the segment. The midsize sedan is suffering a slow but steady death in the marketplace.

Winner 4: Minivan mania. Toyota Sienna sales were up 45.4 per cent in May, to 1,567 units. Chrysler sold 718 Pacificas.

Loser 4: Subcompact cars. For example, the Honda Fit – a very, very good small car – fell 32.6 per cent in May. Subcompact car sales have plunged 25.5 per cent this year, notes DesRosiers.

Winner 5: Jaguar in particular and luxury vehicles in general. Jag sales surged 166.2 per cent in May. But the news was also good for Audi (up 16.6 per cent); Acura (up 15.1 per cent); Maserati (up 77.1 per cent); Infiniti (up 7.9 per cent); Lexus (up 11.9 per cent); Porsche (up 15.7); and Volvo (up 2.0 per cent).

Loser 5: The Chrysler and Dodge brands, down 25.0 and 9.0 per cent respectively. Both brands suffer from aging lineups dotted with vehicles not suited for Canadians. For instance, the Dodge Journey is as old as dirt and needs a major makeover. No wonder sales were down 48 per cent.

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Winners and losers: April’s auto sales story in Canada

Okay, the full Canadian April sales numbers are in and they spin many interesting tales about the winners and losers in this market.

Losers? For starters, year-over-year new vehicle sales declined in April compared to a year ago, reports DesRosiers Automotive Consultants. Sales fell slightly, by 1.6 per cent to 197,203 from 200,384 a year ago. Year-to-date sales at 618,721 units remained 2.5 per cent above the 603,364 units sold by the end of April 2016.

Thirteen of 26 brands in Canada reported year-over-year sales decreases, including higher volume brands such as Toyota (-9.9 per cent), FCA (-9.1 per cent) and Nissan (-8.1 per cent), adds DesRosiers.

Now with a bit of digging we found some really tasty winners and some truly egregious losers. Here’s a celebration of both:

Buick Encore sales were up 23 per cent in April.

Winner: Small SUVs/crossovers: Honda HR-V and CR-V sales are up 56 and 17.9 per cent respectively this year. GM Canada’s small/compact crossover sales were up 41 per cent in April: Chevrolet Equinox (up 73 per cent), the GMC Terrain (up 35 per cent), Buick Encore (up 23 per cent).

Loser: Small cars in particular and cars in general, too: Honda Fit sales are down a staggering 55.5 per cent this year. Mazda3 sales in April slumped 26.9 per cent. Car sales at Ford were down 27.7 per cent in April, and they’re down 20.3 per cent on the year. Ford in Canada has sold 596 Fiestas for the entire year so far, versus 47,460 F-Series pickups. Nissan Micra sales were down 17 per cent in April.

Honda’s little HR-V is attracting lots of buyer.

Winner: Luxury SUVs: at Lexus, SUV sales were up 18.7 per cent in April, with the NX up 25 per cent, the RX up 11.2 per cent. Range Rover was up 48 per cent year-over-year, with the Range Rover Evoque up 69 per cent year-over-year. Jaguar sold 202 F-PACE SUVs in April, which represented about two-thirds of all Jaguar sales for the month.

Loser: Honda’s Acura luxury brand. Sales overall down 4.6 per cent, but look at these numbers: RLX sales down 44.9 per cent, TLX sales down 15.9 per cent. Acura crossovers? RDX sales collapsed in April, down 19.9 per cent.

Winner: SUVs: Toyota Highlander sales sup 20.5 per cent in April, 4Runner sales up 24 per cent. Mazda CX-9 sales jumped 184.4 per cent.

The Jeep Renegade. Jeep sales were down 35 per cent in April.

Loser: Ford’s entire car lineup: Through the end of April, Ford in Canada sold 82,354 light trucks – Escapes, Explorers, F-Series – compared to a paltry 10,751 cars, the once-popular Focus among them.

Losers and Winners: Passenger car sales decreased 8.7 per cent year-over-year in April, with 66,291 units sold, while light truck sales increased 2.5 year-over-year with 130,912 units sold, notes DesRosiers Automotive Consultants.

Winning brands: Jaguar up 157.4 per cent, Maserati up 112.3 per cent, and General Motors up 16.4 per cent, notes DesRosiers.

VW sales were down 30.1 per cent in April, due in large part to fallout from the “Dieselgage” scandal. VW vehicles powered by the company’s 2.0-litre TDI diesel engine — vehicles such as the Jetta, Golf and Beetle convertible shown here — have been tainted by the emissions cheating scandal.

Losing brands: The largest declines, notes DesRosiers: smart (-60.0 per cent), Volkswagen (-30.1 per cent), and Acura (-23.3 per cent). Mercedes-Benz Canada delivered a grand total of 22 fortwo runabouts in April.

Winner: Infiniti Q50 sales were up 80.2 per cent for April. In a market in which customers are turning away from luxury cars to luxury SUVs, the Q50 was a rare exception. A second: Mercedes-Benz is having great success with the C-Class: a 61.2 per cent increase in April and year-to-date growth of 46.6 per cent.

Loser: Nissan’s midsize cars: Altima sales in April were down 48.3 per cent, Maxima down 38.9 per cent.

Winner: Big pickups: FCA’s Ram up 10 per cent in April; Chevrolet Silverado up 27 per cent; GMC Sierra up 19 per cent; Ford F-Series up a modest 3.0 per cent, though April was still the best month on record for F-Series sales.

Loser: Fiat Chrysler (FCA) in Canada: overall, April sales down 9.1 per cent, but there were some whopping slumps amongst previously popular brands: Jeep down 35 per cent, Dodge down 13.0 per cent. If you’re searching for a bright spot, FCA sold 757 Chrysler Pacifica minivans in April.

2017 Chrysler Pacifica Hybrid cutaway. Advanced technology in a production vehicle. The luxurious Pacifica is a minivan is appealing to a surprising number of buyers.

Winner: Mercedes-AMG: 1,034 units delivered, for a 65.7 per cent jump over the same period last year. Year-to-date Mercedes-AMG total: 3,530 sold, for a growth of 80.5 per cent over 2016. The Merc numbers reflect the truly awesome power of good branding and packaging. 

 

 

 

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Trump goes to Detroit: setting the stage for the next bailout?

President Donald Trump brought his usual chaos to Detroit this week, promising to review former President Barack Obama’s decision to lock in a timetable for stricter fuel economy and emissions standards through 2025 and gut the Environmental Protection Agency that enforces them.

The President also toured a Detroit-area research and development centre — car company bosses in tow, genuflecting appropriately — and held a campaign-style rally in Ypsilanti, Mich. His promise: make Detroit “the car capital of the world again.”

President Donald Trump in Detroit, holding a roundtable discussion with industry and union leaders and various officials.

All in all, it was a very bad day for the auto industry, for auto workers, for automotive consumers, for taxpayers and for the planet. That’s how I see it and for good reasons that I will share.

Now to be fair, not everyone will agree with me. For some, Trump brought cheery news. But if you truly understand the auto industry, its long timelines and 20-year product lifecycles, and if you appreciate the industry’s need for a stable R&D investment climate, Trump’s visit has the look of something that could prove catastrophic. I’d argue we should start saving for the next taxpayer-funded bailout right now.

Let me explain by starting with a few facts.

Mark Fields, Ford Motor Co. president and CEO: slashing Obama’s plan could save up to 1 million auto industry and related jobs.

Trump is ordering the EPA to reopen a mid-term review of Corporate Average Fuel Economy (CAFÉ) standards that would require the industry to deliver a fleet average of at least 4.3 litres/100 km or 54.5 mpg by 2025 based on a complicated formula which asks car companies to improve fuel economy for cars by five per cent a year, and for light trucks by 3.5 per cent annually.

This is a big ask of the industry, no doubt, and will require R&D investments, creativity and hard work. Some car company bosses have argued – Ford CEO Mark Fields first among them – that it’s all too much for them. They, in fact, say slashing Obama’s plan could save up to 1 million auto industry and related jobs. They say Obama’s tough rules would make consumers less willing to buy the more fuel efficient vehicles. Advanced engineering will make them too expensive.

The facts suggest something else entirely. A new study commissioned by Consumers Union, publisher of Consumer Reports, found that the average price of new cars and light-duty trucks has remained relatively flat since 1997 – a period of ever-stricter regulations during which fuel economy has improved dramatically and emissions have plunged.

President Barack Obama with the Chevrolet Bolt EV. President Obama put his plan for the auto industry this way: it this way: “It is to help America’s automakers prepare for the future.” He challenged Detroit’s automakers to reinvent themselves and it worked.

And car companies have not suffered one bit. Sales have been booming this entire decade and the profits have been rolling in by the billions. For instance, last year, General Motors booked net income at $9.43 billion (US) and Ford’s full-year net income was $4.6 billion (US).

Consumers have done well, too. The study by Synapse Energy Economics of Cambridge, Mass., found that if “fuel economy had not improved from 2005 through 2015…households would have spent 25 per cent more on fuel in 2015 than they actually did.” Better fuel economy saved the average household $523 (US) in 2015, and the prices of entry-level vehicles have “remained approximately the same over the past 10 years.”

The only losers have been Trump and his fellow millionaires and billionaires. The study found serious price inflation among the most expensive vehicles – by 40 per cent for the top 30 priciest vehicles. Ah, but the average consumer has been a net winner thanks to the toughening of fuel efficiency rules.

President Obama gave Detroit’s auto industry tough love and was rewarded. Detroit’s carmakers are immensely profitable and a global force.

So it seems that Trump’s promise in Detroit is not good news for everyday consumers in particular, though already-profitable car companies stand to benefit in the short term from reduced  R&S pending on fuel economy and emissions. For a couple of years, that will be good for car companies; a decade or less from now, disaster looms.

You see, the car business is a global game. Trump’s administration may be anxious to roll back vehicle standards, but the rest of the world is not. China, for example, is the world’s No. 1 market for full electric vehicles and the Chinese government is pushing ahead with even more stringent vehicle standards.

In Europe, the German government have just passed a resolution to ban the sale of internal combustion engines in the European Union by 2030. Only zero-emissions vehicles would be allowed on the market after that time, according to the resolution.

The German Bundesrat has no direct authority over the EU, and cannot demand changes to the EU’s transportation regulations. But Germany is the richest, most powerful country in the EU and has enormous influence over EU policy.

The all-new 2017 F-150 Raptor. Ford is meeting its fuel economy goals in part thanks to the aluminum F-Series.

The point is, while Trump is vowing to roll back an Obama plan marked by consistent, predictable and achievable targets, the world is moving ahead with tougher rules on a timeline that is consistent with the former president’s initiative. And it was an initiative borne of crisis and created with great foresight.

Go back to January of 2009. In the midst of a global financial meltdown, General Motors and the then-Chrysler Corp. clung to a government financial lifeline that would eventually turn into bankruptcy and a full-scale taxpayer-funded bailout.

The new Obama administration saw that decades of mismanagement, general incompetence and narrow thinking had left Detroit’s automakers hopelessly behind by every metric imaginable. Detroit’s products were poorly built, technologically deficient, generally unappealing and unattractive and inefficiently produced. Obama could see a necessary bailout coming, but he didn’t offer a free ride.

2017 Chrysler Pacifica Hybrid cutaway. Advanced technology in a production vehicle.

Instead, on Day 6 of his administration, he instructed the Department of Transportation to finalize new fuel-economy rules for the 2011 model year, and asked the EPA to review whether California and other states should be able to write their own greenhouse gas rules.

At the time, this all seemed counter-intuitive. Why was the new president further burdening an already struggling industry with new demands and hard regulations?

President Obama put it this way: “It is to help America’s automakers prepare for the future.” He challenged Detroit’s automakers to reinvent themselves and it worked. GM, the company that has since become Fiat Chrysler and Ford reinvented themselves and are now producing world-class vehicles capable of competing around the globe.

In 2009, Obama said his administration’s fuel economy and emissions rules would prove to be “the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil,” with the added benefit of saving U.S. consumers $1.7 trillion(US) at the pump by 2025, or $8,000 (US) per vehicle.

GM resorted to mind-boggling drivetrain complexity in order to maximize electric-only driving for the Chevy Volt.

By 2015, the U.S. Energy Information Administration reported that U.S. net imports of foreign oil were at the lowest level since 1970. New and sometimes controversial oil extraction techniques like fracking have played a large role, but so have dramatic fuel economy improvements – with the added benefit of seeing established U.S. automakers become modern and profitable.

Furthermore, it’s fair to argue that the automotive business environment has changed for the better, too. Without Obama’s initiatives and the accompanying rhetoric, it’s fair to argue that start-ups like Tesla the battery-car company would never have emerged to influence the entire auto industry.

And on the broader issue of the overall climate itself, Obama’s take on the auto industry has been extraordinarily beneficial. A study by the University of Michigan Transportation Research Institute found that the cumulative amount of fuel saved from 2007-2014 came to about 15.1 billion gallons or the equivalent of all the fuel used by U.S. vehicles for about a month.

This reduction has come with a cut in emissions. From 2007-to 2014, says the U of M, 297 billion pounds of carbon dioxide have NOT been pumped into the atmosphere thanks to CAFE.

GM’s electrification chief Pam Fletcher is charged up about plans to being battery cars, plug-ins and hybrids to showrooms at affordable prices.

Trump’s announcement this week is horrifying. |It points to plans that will undo the progress of the last eight years. Obama’s initiative forced Detroit’s automakers to reinvent themselves and the vehicles they build. It worked.

The genius of Obama’s plan was that it fostered numerous realistic innovations but did not push any one particular technology. Thus, Ford now sells a lighter aluminum F-Series pickup with an advanced turbocharged engine that is notably fuel efficient. GM has adopted stop-start engine technology and cylinder deactivation that saves fuel in its hot-selling pickups, and has just launched the first affordable, mass-production electric vehicle in the world, the Bolt.

Car companies have refined their designs to make them more aerodynamic, moved to lightweight materials in everything from seat design to chassis components. They now work closely with tire makers to reduce rolling friction and have adopted more efficient transmissions. And more. All the while booking fantastic profits on record sales to customers who are benefitting from savings at the pump while driving cars that are no more expensive now than a decade ago.

President Trump, it appears, wants to change all that – to take Detroit back to when it was great – to a way of business that lead to bankruptcies and bailouts in 2009.

Trump’s vision for Detroit means we should start saving for the next bailout right now.

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