Quote:
Originally Posted by lycosid
Thanks. I could see that being a very long term effect, but it's hard to imagine any significant impacts in the next 5-10 years. Seems like you would need to
1. Project significant demand increases beyond what your current industrial capacity can handle;
2. Project that regulations won't be changed back to a more exacting standard; and
3. Have the capital available to build a new plant.
It seems like that would all conspire to leave US production levels pretty much where they ate now.
Sorry if that was garbled and/or objectively dumb. I know next to nothing about manufacturing, automobile or otherwise.
The thing is that car factories can be retooled a lot more easily than in the past, and you can increase capacity a lot by adding second/third shifts.
In addition, cars on a global level tend to be produced as close as possible to where they're consumed. The big market for SUVs and pickup trucks is the US, which is why many of our vehicle exports are of these product types (VW, Mercedes, BMW, etc). Smaller cars are consumed in large numbers everywhere, which means they tend to be imported. So we'll see on the margin a boost of production/jobs in SUV production in all likelihood, and a decrease in imports of smaller cars which often are sold at or near a loss in the US to improve CAFE performance. The SUVs will lower in price, and the smaller cars will increase in price.
Regarding industrial capacity, the auto industry is awash with excess capacity right now and more is coming online, so the question is one of which factories will be adding shifts and which will be eliminating them.
On balance I see CAFE standards as having a negative impact on American production.