Automobile Industry Agreement 2011- President Obama to Announce Agreement with Automobile Industry

Automobile Industry Agreement  2011-  President Obama to Announce Agreement with Automobile Industry

After what has likely been a crucible of debate between President Obama, environmentalists and automakers, an agreement has been reached between them for fuel economy standards to be implemented over time.  These standards take into account concerns for air quality and climate protection as well as fuel economy.  And the president is slated to announce the agreement to the nation tonight at 10 p.m. EDT.

Stephen W. Wade, Chairman of the National Automobile Dealers Association, told St. George News that the agreed plan reflects a compromise of 54.5 miles per gallon as a standard for vehicles to deliver, to be implemented over time between 2017 and 2025. (The president’s proposal was 60 mpg.) Wade says the administration got 7 key players in the U.S. auto industry to agree.

“Quite frankly,” said Wade, “that sounds good, doesn’t it?  60 mpg [of the president's originating proposal].  I’d love to see 100 mpg,” he said, “but the devil is in the details and you have to see what can be done.”

Wade offered that the auto industry currently has cars that can do 40-50 mpg.  But he explained that research and development along with many other factors involved in getting all new cars to the desired standards comes at a cost, and that cost gets passed on to the sales price of the cars.

“The average car in America [today] is 10.2 years old,” said Wade; “that is an all-time high. So people are sitting on those cars, … and there is a pent-up demand.”

That demand encourages optimism in the NADA. “The automotive industry is the leading indicator today in the country; usually it is homes, but today it is the automobile industry. But,” he added, “it is leading in an anemic way.”

Wade reviewed general numbers of automobiles sold in recent years: In 2007, 17 million units were sold; in 2008, 10.2 million; in 2009, 11 million; in 2010 11.6-7 million.  He said they (the members of NADA) never dreamed they could actually operate at such low numbers.  “Now we are excited at the prospect of operating at about 12.9 – 13 million unit sales. … We found out we can actually operate at levels we never dreamed possible.”  His enthusiasm at the prospects was evident.

NADA represents 17 million auto dealers in the United States. Wade is serving a one-year term as its Chairman.  His interview with St. George News offered retrospective and insights on many areas related to the automotive industry, which will be developed in a separate and forthcoming article.