Now that US President Obama has finally managed to up the ante on gas mileage standards in the US and address greenhouse gas emissions, why is the auto industry acting like this is a big surprise?
Obama issued two memoranda on January 26th to address mileage standards and greenhouse gas emissions. He is pushing for standards to take effect two years down the road (2011 model-year). On greenhouse gas emissions, he wants states to be able to set their own emissions standards, doing this by granting a waiver to California to set its own standards.
Maximum improvement is the easy way out.
It is understandable that the auto industry would not like the latter, especially as it would be hard for them to adapt to such a fragmented market should all states set different standards. But a company with foresight could simply set its fleet to match the highest standards possible, thereby circumventing the need to adapt in 50-some different ways.
Higher mileage standards were a predetermined election outcome.
So my confusion as to the industry's response stems from the former. That stricter mileage standards were on the way was a given, especially once regime change hit the US in November. While the former occupant of the White House put off the decision during his entire tenure, the new occupant has seized the day, which, at least to me, has not come as a surprise.
"It will be the policy of my administration to reverse our dependence on foreign oil, while building a new energy economy that will create millions of jobs," Obama said. "We hold no illusion about the task that lies ahead. I cannot promise a quick fix. No single technology or set of regulations will get the job done. But we will commit ourselves to steady, focused, pragmatic pursuit of an America that is free from our energy dependence and empowered by a new energy economy that puts millions of our citizens to work."
Continuous improvement is a global trend.
It is duly noted that the industry is struggling, both foreign and domestic. Sales are down for all carmakers, across the board. "Our goal is not to further burden an already struggling industry," but rather "to help America's automakers prepare for the future," Obama noted. He wants "to ensure that the fuel-efficient cars of tomorrow are built right here in America."
Surely the automobile companies realize that it is all fine and well to ask for, and receive, a government bailout. But they can't continue to expect the public, in this case Americans, to continue to pump gas down the drain, so to speak. To do so is folly. Funnily enough, this does not apply only to American car makers. Some of those companies that have the best mileage standards outside of the US were among those lobbying the US government to not change a thing.
Europe and Japan have both had strict to very strict mileage standards for years now. Governments have even created vast and deep incentives for consumers to buy efficient vehicles, ranging from tax breaks to tax rebates to no yearly car or licensing taxes at all for the most economical vehicles. And yes, the European and Japanese auto industries are suffering as well from the current financial climate. Honda has closed its UK factory for two months to allow dealerships time to sell stocks; Renault and Peugeot both closed down or suspended work in factories in Europe over 2008 and through early 2009.
But these problems aside, the auto companies have adapted very well to new market conditions and have cars that meet the challenges already on the roads outside of the US. What is keeping them and American companies from doing the same thing within?
You'll get more mileage from our archives.
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