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Gas Taxes Should Go Up To Boost Green-Car Sales, Says GM CEO Akerson

 
2,388 views Jun 7, 2011
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Dan Akerson, GM CEO as of September 1, 2010

Dan Akerson, GM CEO as of September 1, 2010

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The CEO of General Motors, Dan Akerson, told a Detroit newspaper that the Federal tax on gasoline should be raised by 50 cents or $1 a gallon to encourage consumers to buy more fuel efficient vehicles..

In an interview last week with the Detroit News, Akerson said a higher gas tax should be part of a comprehensive energy policy set by the U.S. government--a notable omission thus far from the policies issued by the Obama Administration.

A higher gas tax makes more sense, Akerson argued, than proposals to increase corporate average fuel economy (CAFE) regulations to as much as 62 miles per gallon by 2025.


Those increases "tax production" in the U.S., he said, which will cost jobs. And he asked for a discussion of the costs and the benefits of different ways of achieving the same goal: increasing the efficiency of new vehicles to reduce fuel consumption.

Making Republicans "puke"

Akerson acknowledged the political impossibility of raising the gas tax, especially with gas prices at record levels of $4 a gallon or more in some parts of the country.

The very idea, he said, "will make my Republican friends puke."

Gas pump

Gas pump

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The GM CEO is hardly the first auto industry executive to advocate higher gas taxes. Rick Wagoner, GM's CEO in 2009, said the idea was "worthy of consideration."

Akerson's counterpart at Ford, CEO Alan Mulally, has also called for a higher gas tax.

So have Bill Ford Jr., chairman and previous CEO of Ford, and Mike Jackson, CEO of AutoNation, the country's largest auto dealer.

All of them say that directing market forces by raising the cost of consuming gasoline is a far better way to move the needle than relieving consumers of all responsibility and putting the entire burden of higher gas mileage on automakers.

In addition, rising gas mileage has reduced total gas-tax revenue, increasing the deficit in the Federal Highway Trust Fund. Two years ago, that shortfall was estimated at $400 billion for the period 2010 to 2015. Nothing has changed since then.

Akerson: the new Lutz?

With the retirement of GM's former product czar Bob Lutz, Akerson may be assuming the Lutz role as the GM executive who says exactly what he thinks, no matter how much chaos it causes.

'Revenge of the Electric Car' premiere: Bob Lutz arrives in a Chevy Volt

'Revenge of the Electric Car' premiere: Bob Lutz arrives in a Chevy Volt

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Lutz once notoriously called the concept of climate change "bull$&^t" in a live interview.

Akerson's interview on the gas tax came on the heels of one in which he said of Cadillac's long-time competitor, Lincoln, "you might as well sprinkle holy water; it's over."

He also damned two upcoming Cadillac models with faint praise, saying they wouldn't "blow the doors off," though they would be "very competitive."

Detroit = East Berlin

Not the sort of stuff you heard from the previous parade of uniformly bland, media-trained GM CEOs.

Other Akerisms?

On the state of the battered city of Detroit, GM's CEO said he hadn't "seen a city in this bad a shape since I went to East Berlin in 1969."

[Detroit News]

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Comments (19)

  1. fb_1001015277 avatar John Briggs Posted: 6/7/2011 6:32am PDT

    The time to do that was during the decline in gasoline prices after the 2008 bubble. It could have been phased in in 10 cent increments as gasoline prices declined. Perhaps we can do it again now as gasoline prices decline.

    But I really feel like gasoline tax should be done as a percentage rather then $/gallon. That way, as inflation increases the price of all things, the fed. gas tax increases with it.

    So go ahead and increase the gasoline tax, but use it to compliment the CAFE standards, not as a substitute.

    I miss Bob Lutz.
     
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  2. fb_500028932 avatar Matt Heist Posted: 6/7/2011 8:53am PDT

    in general, i would think higher gas taxes are a good idea (less emissions, get the country less reliant on countries hostile to the us, etc). the issue for me with higher taxes is how they are spent. i am convinced if major overhauls to defense, entitlements and some discretionary programs were made that showed us all real cuts were being made to, admittedly, very popular programs - but cuts that made those programs sustainable - higher taxes would not be quite so toxic (at least not so toxic for a group like me for which higher/lower taxes is not a religion/ideology but more of a concern with waste and sustainability)
     
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  3. fbergski avatar Philip Berg Posted: 6/7/2011 9:31am PDT

    Looks like another reason to not buy a GM car. How disappointing, instead of letting innovation and free marking thinking dictate consumer spending we have a CEO spouting for more government regulation and taxes. I am seriously looking at the Sonic for my wife's next car but have serious reservations about GM and their government bailout (which I did not support) and now Akerson spouting off about taxing gasoline.
     
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  4. john_v avatar John Voelcker Posted: 6/7/2011 10:28am PDT

    @Philip: I'm curious, what's your position on mandated CAFE standards?
     
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  5. fb_1799141900 avatar Tom Moloughney Posted: 6/7/2011 10:27am PDT

    I support the the idea of increasing taxes on gasoline as well as eliminating the subsidies the oil companies get. As oil companies rake in record profits in the billions, we're subsidizing their exploration & refining! Then people get all up in arms about public funds going to install EV charging infrastructure and say "let the market decide which fuel is best" OK, let's let the market decide. End the oil subsidies, make the oil companies pay for the security our troops provide in unstable regions where they are only there for the oil, and create a single consumption tax based on miles driven for all cars. Gas will cost $20/gallon and electricity will be slightly higher than what it is now.
     
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  6. fb_100000005296979 avatar Kent Beuchert Posted: 6/7/2011 10:39am PDT

    I wonder if Akerson knows just how much of their slim profits GM earns from their big vehicles? If Akerson thinks that GM can compete in the small car field, he's just about the only one. Even their claimed star seems to have trouble selling. Of course, at $42K the basically $12K Volt is rather awkwardly priced, shall we say?
     
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  7. fb_100002441833924 avatar George Parrott Posted: 6/7/2011 1:37pm PDT

    Kent,
    You really don't like the Volt; that much is clear. But fact is that it is selling; few hang around dealer's lots at MSRP, but some dealers are trying to gouge up to $7000 above MSRP and those cars do sit for a while to be sure.

    But "$12K Volt..." ouch! There are generally agreed to be that much or more just in the battery pack of the Volt.

    In the last 15 years we have owned (all bought new) a Lexus SC300, BMW 3 series, Audi A4 Avant, VW Passat sedan and later Passat AWD wagon,Acura MDX, Toyota Camry Hybrid and two Gen II Prius cars, and from our experience the Volt does not have anything to be embarrassed about in that set of comparisons.

    And as I noted to your post on another thread, our last American car was a 1969 Olds 442.
     
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  8. fb_100000005296979 avatar Kent Beuchert Posted: 6/7/2011 10:47am PDT

    As for the dollar tax, you'd think that someone of his
    high position would realize that $4 gasoline is killing big car sales (he should at least know that, since GM makes more gas guzzlers than anyone out there). It is also wreaking havoc on our economy. Adding another dollar seems to be perhaps
    the most brainless statement coming from an apparent non-idiot in quite some time. Is Akerson doing other strange things? Can he find his way home at night? I wonder, after that piece of utter nonsense.
     
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  9. fb_1001015277 avatar John Briggs Posted: 6/7/2011 11:42am PDT

    I think the real question was which should we do

    1) 62.5 MPG CAFE standards
    2) $1/gallon fed gas tax
     
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  10. fb_100000111228005 avatar Ed Dennington Posted: 6/7/2011 1:12pm PDT

    They didn't quote the whole story, which you can read in Detroit News - who the interview was with. He said that would drive more people to buy more Cruzes and less Suburbans, which help the environment more and accomplish the same thing.
     
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  11. fb_1001015277 avatar John Briggs Posted: 6/7/2011 1:35pm PDT

    I am not convinced that a gas tax accomplishes the same thing as CAFE. CAFE requires that all cars and trucks get higher MPG. There is no real option (except paying a fine).

    Higher taxes will encourage you to buy a more fuel efficient vehicle (and/or drive less) but you can just pay the higher price. There is no guarantee that automakers will supply improved MPG vehicles.

    Even if you want to buy a Cruze, CAFE will likely mean it will get higher MPG than if there is no CAFE. The automakers are forced to improve the vehicle MPG, and they are doing it.
     
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  12. fbergski avatar Philip Berg Posted: 6/7/2011 11:58am PDT

    Innovation and free markets is my answer to CAFE. If GM can't make a small car to compete in the market, it's time to get new management or let GM fail. I've owned GM cars since I was sixteen so this comes from a customer. I shouldn't have to pay more taxes to support GM's archiac management philosphy.
    How come you don't hear the CEO of Toyota, Nissan, Mazada, Subaru, Suzuki, KIA having press conferences spouting increased taxes. Only CEO's from American car companies. I'd suggest Akerson sit down and read one of Dr. Demings book about quality, the japanese did.
     
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  13. fb_1001015277 avatar John Briggs Posted: 6/7/2011 1:09pm PDT

    Well, a look back through the last 30 years will tell you what innovation and free markets have done for fuel economy. NOTHING.

    Time to try something different.
     
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  14. fb_100002441833924 avatar George Parrott Posted: 6/7/2011 1:29pm PDT

    Yup, Deming was prescient about how to improve factory production and the US corporate "culture" ignored him almost completely. As you note, the Japanese did not, and we now think of products from Japan as "quality" and not "junk," which was the perspective in the 1950's.
     
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  15. fb_100002441833924 avatar George Parrott Posted: 6/7/2011 1:26pm PDT

    We have been way too spoiled by cheap gasoline here in the US; it has led us to regular use of huge SUVs and similarly big cars and little real concern about fuel economy.

    After spending $50 to even $70 to fuel a small Opel in Europe a couple of months ago, even $6 per gallon fuel costs here would be seen as cheap by most drivers over there.

    I agree that we need much higher taxes both federal and state on fuel, but there has to be some way to mitigate that impact for the long-haul trucking industry.

    AND, all of those additional fuel taxes should be directly earmarked for road upkeep; U.S. highways and roads are a joke compared to most in heavily taxed Europe.
     
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  16. fb_500028932 avatar Matt Heist Posted: 6/7/2011 2:37pm PDT

    These are great points. Again, my only exception would be the use of the tax revenue. If there was a higher level of trust in the accountability of our governments (national, state, local) to spend responsibly, I would be willing to pay more. However, the sometimes vitriolic debates about taxing and spending often seem to miss an underlying point from some responsible members of the "tax less" crowd and that is that putting more tax revenue into broken bureaucracies / public and private employee unions / etc without demanding massive reforms first seems wrong.
     
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  17. robok2 avatar robok2 Posted: 6/8/2011 11:38am PDT

    @ Phillip B... Uh, perhaps the reason the CEOs of the Asian OEMs aren't clamoring for higher taxes is they know better than to get involved in a controversial political issue. Or, better yet, perhaps it's because they come from countries which not only have the higher gas taxes in place now, they are higher than American gas taxes wopuld be even after a $.50-$1.00 gas tax increase.
    Leaders of European and Asian OEMs have criticized the low gas taxes in the US since I started in the industry long ago. Apparently, this is news to you.
     
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  18. Compare Gas And Electricity avatar Richard Kirk Posted: 8/18/2011 5:27pm PDT

    I think the only way to become more energy independent is to take actions similar to the gas tax suggestion. The economy is currently fragile, so I would gradually incorporate this tax increase. However, this tax revenue should be used for a positive benefit to the tax paying population. I would say subsidies for electric cars or vehicles with a very high miles per gallon efficiency. This would work in two ways: increasing fuel efficient cars and decreasing unnecessary mileage. If gas taxes are increased, businesses and individuals will be forced to be more efficient. This will greatly benefit the country as a whole.
     
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  19. dahammer avatar Jim Hammeke Posted: 8/25/2011 5:40am PDT

    Agreed, the tax on fuel has not kept up with inflation on the state or federal level. The highway trust fund is wiped out at a time when we need to replace thousands of deficient bridges. Pennsylvania's own Governor Rendel wanted to impose tolls on an interstate highway that was paid for by federal fuel taxes. The revenue generated by the tolls would pay for maintaining other roads in the commonwealth. He didn't have the stomach to propose increasing fuel taxes as it would cause immediate negative backlash from the voters, it was just more politically expedient to stick it to the truck drivers crossing the state on Rt. 80 who don't get a vote. Raise fuel taxes incrementally by $.10 per year for 5 years, replace bridges, reduce unem
     
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