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Tuesday, June 07, 2011

GM CEO: Raise The Gas Tax

GM's CEO, Dan "plain speaker" Akerson said in an interview with Detroit News:

"There ought to be a discussion on the cost versus the benefits," he said. "What we are going to do is tax production here, and that will cost us jobs." For the years 2017-25, federal officials are considering 3 percent to 6 percent annual fuel efficiency increases, or 47 mpg to 62 mpg. That could boost the cost of vehicles by up to  3,500. "You know what I'd rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas," Akerson said. "People will start buying more Cruzes and they will start buying less Suburbans."

He is of course, correct: it would be easier to push the market towards buying efficient cars by keeping gas expensive... easier for the carmakers, not for the consumer.  The consumer wants the pain hidden--we want cheap gas and efficient cars (but not too expensive, thank you).  However, the last part of his quote, "People will start buying more Cruzes..." is not what the CEO should really want--GM probably makes a much nicer margin on Suburbans than on Cruzes.   GM's top selling product is still the Silverado/Sierra.

Also, a gas tax now would hurt consumer spending, now, and slow economic recovery--hurting GM's sales. 

Akerson should be careful, he isn't going to win any friends among his customers, or on Wall Street, with so much plain speaking.

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