Because Detroit Just Isn't Screwed Enough
The other week, Obama joked that Car and Driver magazine had named him auto executive of the year. If only he really was joking:
WASHINGTON — President Barack Obama will announce Tuesday a breakthrough compromise to set tough standards of 35.5 miles per gallon by 2016 for new cars and trucks in return for California backing off its push for more stringent rules on automakers.Read the whole thing from the Detroit Free Press here.
The rules could radically reshape the U.S. automotive industry by forcing automakers to push higher levels of technology such as hybrid-electric drives into vehicles faster than once planned. The deal fulfills Obama’s campaign promise to push Detroit and other automakers toward more fuel-stingy vehicles, but will also sharply raise the industry's costs for meeting regulations.
The new rules will increase the costs of meeting fuel economy standards by $600 per vehicle to a total of $1,300 in 2016, a senior administration official said. The administration did not provide a total cost to the industry, but previous estimates for meeting 35 miles per gallon by 2020 had run more than $100 billion.
Now, is it just me or is this not the best time for this kind of industrial policy? We are in a recession and the auto industry is suffering big time, with two of the Big Three are teetering on the edge of extinction. Do we really want to be jacking up costs across the board?
Then again, what do I know? I'm not Car and Driver's auto executive of the year, am I?