You can argue over its ultimate value as an economic stimulus, but one thing is certain — the recent cash for clunkers program sent nearly half a million relatively inefficient cars to the junkyard. The $4,500 trade-in credit was enough to push droves of consumers into more fuel-efficient vehicles. And car dealerships, which had resembled Maine beach resorts in the winter for most of 2009, looked more like a firemen's carnival in midsummer as they tried to handle the onslaught of real, live customers with money to spend. The staggering automotive industry got, at the least, a temporary lift, and the environment gets a much longer-term benefit.
You've probably guessed where I'm going with this — why not create a similar program to speed up the transition to 2010 trucks powered by the cleanest diesel engines in the world?
Beginning Jan. 1, diesel engines manufactured for sale in the U.S. will have to meet new EPA emissions regulations. These limits are so stringent that in many cities the exhaust at the tailpipe will be cleaner than the air going into the engine. This represents a major advance in efforts to control mobile air pollutants and a major technological achievement for the truck industry.
It also represents a major cost increase for truck users. In 2002, 2004 and 2007, fleets bore the cost of our incremental movement towards this rather astonishing emissions performance. Estimates are those steps added at least $10,000 to the price of each new truck. In 2010, this penultimate step in truck emissions will add another $8,000 to $10,000 for a heavy-duty truck and at least $6,000 for a medium-duty one. And that's before the additional Federal excise tax, which will add a few thousand more to the final price.
To make matters worse, fleets face this substantially higher price after suffering two years of depressed freight volumes which have driven down rates, revenues, employment and profits. For truck manufacturers, sales have been dropping like a stone since 2007 and this year will bottom out at less than a third of what they were in 2006 when the economy was healthy. Between continued soft freight demand and the higher price to pay for emissions, forecasts are that truck sales will continue to remain weak in 2010 despite the increasing age of the trucks in our fleets.
So why not a cash for smokers program? Society would benefit by getting substantial numbers of older, dirtier trucks off the road. Fleets would be incentivized to buy trucks that are not only cleaner, but more productive and efficient, bringing benefits to the nation's entire supply chain as well as improvements to air quality. And truck manufacturers could bring back furloughed production workers while their dealers could begin pumping revenue back into their local economies.
As for cost, it would pale in comparison to the billions spent on cash for clunkers. It could be as simple and low-impact as suspending the excise tax for the 2010 technology surcharge. Or it could be combined with the current Congressional proposal to offer tax credits for trucks with advanced safety systems. We'd get two bangs for our buck — cleaner air and safer trucks.
Now that would be a stimulus package with far more tangible benefits than bank bailouts and corporate loan guarantees.
E-mail: [email protected]
Web site: fleetowner.com
