CAFE Regulations: The Culprit Killing General Motors
In the 1970s, GM needed to either fight the UAW to the death to get its costs down, or to abandon the small car market and focus on large vehicles. It lacked the courage to do the former, and the Corporate Average Fuel Economy (CAFE) law, which was passed in 1975, prevented it from doing the latter.
It is difficult to overstate the damage that CAFE has done to GM over the years. The entire purpose of CAFE is to force companies like GM to do something other than build and sell the vehicles that would earn them the greatest profit. Otherwise, there would be no point to the law.
CAFE has bled GM of tens of billions of dollars in profits over the years. If they had all of those dollars in the bank today, they would not be on the brink of bankruptcy. Read More...
