Wednesday, October 3, 2007

Friedman

Tom Friedman has a very odd Op-Ed in today's NY Times. In many ways, it is a classic Tom Friedman piece (sounds worldly, says nothing). For instance, it says this early on:

Look, I get pork-barrel politics. I understand senators from oil states protecting the windfall profits of oil companies. Ditto for farm subsidies. It’s an old story: Protect my winnings, and I’ll reward you with campaign contributions. I get it. I get it.

Followed by this:

What I don’t get is empty-barrel politics — Michigan lawmakers year after year shielding Detroit from pressure to innovate on higher mileage standards, even though Detroit’s failure to sell more energy-efficient vehicles has clearly contributed to its brush with bankruptcy, its loss of market share to Toyota and Honda — whose fleets beat all U.S. automakers in fuel economy in 2007 — and its loss of jobs. G.M. today has 73,000 working U.A.W. members, compared with 225,000 a decade ago. Last year, Toyota overtook G.M. as the world’s biggest automaker.

Which means he obviously doesn't get pork-barrel politics at all. American car manufacturers fight higher mileage standards for a number of reasons, the two primary reasons being that (1) American car manufacturers currently make much more money on low mileage cars and trucks and (2) Foreign manufacturers are much better at making high mileage cars and would, in the view of the American car manufacturers, increase their market share in the short and medium terms if higher mileage standards were mandated.

So, American car manufacturers contribute huge sums to ensure that fuel standards are not raised, and they are not raised. That is pork-barrel politics. What the politicians care about is raising enough money to get re-elected. They really don't care much what happens to Ford, GM, et al in 10 years if they themselves don't survive the next election cycle. It would be responsible for Congress to raise fuel standards, but if those in Michigan voted for it, they'd be operating outside of pork-barrel politics rather than inside it. Friedman doesn't get it, regardless of how many times he says he does.

Further on, he states:

But assisting Detroit’s suicide seems to be contagious. Everyone wants to get in on it, including Toyota. Toyota, which pioneered the industry-leading, 50-miles-per-gallon Prius hybrid, has joined with the Big Three U.S. automakers in lobbying against the tougher mileage standards in the Senate version of the draft energy bill.

Which does sound weird. Why would Toyota, a company that makes the Prius lobby against the new bill?

Is it because Toyota wants to slow down innovation in Detroit on more energy efficient vehicles, which Toyota already dominates, while also keeping mileage room to build giant pickup trucks, like the Toyota Tundra, at the gas-guzzler end of the U.S. market?

Oh, that makes perfect sense! They then can sell very profitable Tundras while at the same time continuing to dominate the fuel efficient markets. That makes sense to me. They are in a win-win situation then, regardless of the outcome. If they succeed in getting fuel standards stalled, they sell Tundras. If they fail, they sell Prius's. I'm not saying I agree with the strategy, but it sure seems to be logical and one that could be very successful. So, he doesn't get pork-barrel, but he gets the Toyota strategy. Bring it home, Thomas!

Sad. If Toyota were to take the lead on this front, it could enhance its own reputation and spur the whole U.S. auto industry to become more globally competitive. Hey, Toyota, if you are going to become the biggest U.S. automaker, could you at least bring to America your best practices — the ones that made you the world leader — instead of prolonging our worst practices? We have enough people helping us commit suicide.

Um, whaaaa? WTF? Toyota has a great reputation, I'm not sure it really needs any additional "enhancing" at the current time. People love Toyota (with the exception of Joe White at the Journal, of course). And why should Toyota help the U.S. auto industry become more globally competitive? I mean seriously, WTF? Is he really asking Toyota to let its competition back into the game? Really? And finally, isn't Toyota bringing their best practices here? After all, they aren't exactly camped out in Detroit talking to the UAW now, are they?

Sadly, this is increasingly a typical Friedman column - world-weary, preachy, ignorant babble.

And to preempt some comments, let me say that I don't necessarily like the fact that Toyota is selling Tundras, nor do I like the fact that they are campaigning against CAFE. I'm just saying that the strategy is (obviously) a winner.

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