To be fair, the new president faces a lot of immediate challenges. But when it comes to the auto industry, the biggest four challenges could be the bridge loans, fuel economy mandates, the EPA vs The California 14, and the board of czars that will oversee the fortunes of GM and Chrysler. The similarity between these challenges and others on the domestic and global agenda: he doesn't have a lot of time to get them right.
It was clear that the $17.4 billion granted to GM and Chrysler was just the beginning of a process needing a well thought out and long term endgame. Part of that endgame involved the two automakers coming up with viability plans, which are due on February 17. Then Congress and the president will need to decide, based on those plans, whether the car companies should receive more money.

Should the carmakers get more money, the necessary car czar position is looking like a body-of-car-oligarchs instead, which sounds like a more reasonable idea. One name that has popped up to head the group is Steven Rattner, a former NYT reporter turned private equity fund founder. What hasn't been explained yet is how this board of overseers is meant to work with the car companies.

On the issue of fuel economy, some of Obama's campaign pledges might cause additional consternation. He had said he wanted to double the CAFE standard in 18 years, which would mean a 50 mpg average by 2027. He has backed off of that to the more generic "I want to raise fuel economy standards." His other campaign trail pledge was to review the EPA not granting California and 13 other states a waiver to set their own emission standards. His EPA designee has said one of her first priorities will be to review that decision, and she sounds like she intends to overturn if she can. If that happens, as the Obama administration lifts up the industry with one hand, the industry will probably feel itself being choked by the other hand.

[Source: Detroit News]

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