I drive a Ford hybrid. I consider myself both a champion of American cars and of fuel efficient vehicles. So when President Obama announced his proposal for new fuel efficiency standards—requiring the auto industry to build vehicles that average 35.5 miles per gallon by the year 2016—I was pleased. Of course, hardcore environmentalists don't think the standards are high enough (today in Japan, the standard is 42.6 mpg and in Europe it's even higher at 43.3 mpg) while others feel the government should stop meddling in the private sector. But you can't please everyone.
The big question in all this, however, is what it's going to mean for the economic health of the already struggling car companies. Such fuel standards are the future and essential for US car makers to be competitive with the Japanese and European car makers, and in the long run will benefit the industry. But the upfront costs will be substantial and could be too great for them to swallow in their weakened states.
So my question to you is: What do you think Obama's new policy is going to do for American car companies? Is it the death knell of Detroit? Or is it a chance for them to turn around and compete with the Japanese and Europeans which will ultimately bolster their stocks? Let me know your thoughts!