The Presidential Task Force on Autos released it’s New Path to Viability for GM and Chrysler. The administration has concluded that GM can come back strong after a restructuring, but that Chrysler must link up with someone else, specificially Fiat. So far, so good.

The problem:

“The new GM will have a significant focus on developing high fuel-efficiency
cars that have broad consumer appeal because they are cost-effective, have good performance and are
reliable, durable and safe.”

There’s a similar emphasis on fuel economy in discussing the products Chrysler will get from Fiat.

What’s with the fixation on fuel economy as the solution? These companies, especially GM, did not fail because their cars’ fuel economy is not competitive. Aside from a brief recent blip, car buyers are not heavily basing their buying decisions on fuel economy. TrueDelta operates a real-world gas mileage survey. When people focus on fuel economy, we get more traffic. From this perspective, we’d love people to be fixated on fuel economy. Fact is, while some car buyers are, most are not.

If McDonald’s was in danger of going under, would the solution be limiting its menu to salads?

Washington clearly wants to believe that the only reason Americans aren’t buying more fuel efficient cars is that Detroit doesn’t offer them. This simply isn’t the case. McDonalds offers salads, and GM offers fuel-efficient cars. Bottom line is that most people simply aren’t buying them.

Force these companies to offer only highly efficient cars, and unless gas shoots up in price these companies will fail.