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GM chief wants higher federal gas tax

By: Mark Tapscott
Editorial Page Editor
01/12/10 8:45 AM EST

It's International Auto Show time in Detroit, so senior executives from automakers around the world are in the Motor City this week showing off their latest wares, including concept vehicles that may or may not give hints to their future products, and making pronouncements on topics far and wide.
So you never know what to expect in the way of news from Detroit. Take, for instance, Ford's announcement yesterday that due to growing demand, it is ramping up production of two of its least fuel-efficient products, the Ford Expedition and Lincoln Navigator SUVs.
Expedition sales are up 45 percent, compared to a year ago, while Navigator sales have climbed fully 60 percent for the same period, according to Ford Americas president Mark Fields. He was quoted by Automotive News, the trade publication.
But over at Government Motors - formerly known as General Motors - one of its most gregarious and visible executives is calling for a hike in the federal gas tax.
"You either continue with inexpensive motor fuels and have to find other ways to incent the customer to buy hybrids and electric vehicles, such as the government credits," Lutz told journalists at the show yesterday, according to CNN Money. "Or the other alternative is a gradual increase in the federal fuel tax of 25 cents a year, which in my estimation would have the benefit of giving automobile companies a planning base, and giving families that own vehicles a planning base."
Lutz expressed frustration that buyers react so quickly to changes in gas prices: "Every time gas prices go back down, everybody starts buying big stuff again. Gas prices go up a buck, the big stuff is unsellable and everyone wants small cars. Go figure. It's like the collective memory is about three weeks long. We can't run a business that way."
Lutz may have an ulterior motive in calling for a federal gas tax increase. He has been a vigorous advocate within GM for the Chevrolet Volt electric plug-in that will be unveiled this fall. Making gas more expensive would tend to help sales of vehicles like the Volt because they use less gas than conventional vehicles.