There’s a great new commercial, called “Imported from Detroit” that debuted at the Super Bowl. It’s about re-birth of one of the toughest cities in America. It’s about American innovation. It’s about American automakers leading not following. It’s an inspiring piece of advertisement.
And thanks to tougher pollution and fuel economy standards, American automakers are not just making world beating, competitive products, they are doing fuel economy. And they are doing it well: Ford and GM have cars that get 40 mpg and are on the cutting edge on electric vehicles.
And just in time. With gasoline prices pushing $4/gallon, consumers are flocking to fuel-efficient cars, shunning SUVs and snatching up hybrids. My most recent Automotive News magazine headline blared “Buyers Move Towards Fuel Economy”. According to the article, automakers are reaping the benefits of the tougher standards that they fought so hard against:
“Many automakers believe that the work they've done since the last big price surge, and in anticipation of higher government fuel-economy standards, leaves them better prepared this time, with stables of more competitive small cars and crossovers.”
High, volatile oil prices killed Detroit’s market share during the previous three oil shocks during the 70’s, 80’s and 2008. Detroit has learned a hard lesson. Fuel efficiency is not a virtue; it’s matter of survival.
Thanks to California, the 2007 Congress, the Supreme Court, President Bush and President Obama, we have tougher pollution and fuel economy standards in place. And because of their leadership, Detroit is poised to lead, not follow, the world’s auto industry.
The biggest winners from stronger pollution and fuel economy standards? Perhaps ironically, Detroit (according to same article):
“It could be a fairer fight this time. GM and Ford not only have more competitive small cars, but hot-selling crossovers such as the Chevrolet Equinox and Ford Edge that could benefit if consumers abandon big SUVs.”
The job is not finished of course. California and President Obama have the opportunity to ensure Detroit remains on its path to rebirth by partnering on the next round of the National Program. Tough, but achievable, pollution and fuel economy standards that deliver 60 mpg by 2025 are what is necessary to ensure Detroit is an innovator and global leader on clean cars.
Financial analysts at Citi confirm that tougher fuel economy standards leading to 60 mpg by 2025 are good for Detroit:
“.. future improvement in fuel economy may actually have positive implications for sales units and variable profits for both the industry and the Detroit 3 in particular.” (Citi, “Fuel Economy Focus: Perspectives on 2020 Industry Implications”, March 14, 2011)
60 mpg. Do it to for national security. Do it to lead the world. Do it for our future.