Just after Christmas I wrote about the laughable Energy Bill mandating an average 35 mpg for car companies by the year 2020. With a stroke of his pen, President Bush had signed the death sentence for the US automobile manufacturers. True, the bill took forever to get through Congress, primarily because the Republicans refused to increase the requirement of electricity that electric utilities needed to get from renewable sources. Basically the bill was a testament to the power of entrenched powers - oil, electric, and auto - to control the energy policy.
Today I checked the stock prices on those companies and GM was under $10 at $9.69 for the first time in 50 years while Ford hit a new low of $4.60. GM needs some $15 billion to remain solvent according to Merrill Lynch and with consumers racing away from trucks and SUVs its difficult to see how they will return to profitability.
The price of crude oil is $141.65 while the price at the pumps went way over $4 a gallon. We have basically had the same automobile industry - that includes the logistics/distribution system for its primary fuel - for a hundred years. Now it looks like Bush added 12 more years to this dying legacy.
Some of my friends say let the "free market" take care of this. OK, I have a Toyota. I'm doing my part.
So what is the point? Government needs to kick this industry in its butt. We need guidelines that are more realistic, like 50 mpg by 2015. Electric hybrids with regenerative braking is the most promising technology on the horizon. Hydrogen also has potential (but so did Zeppelins). Government needs to put the pressure on these companies to adapt the new technologies and become much more efficient. This is the "competition" the US automobile industry needs.
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