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5 Ways the Obama Administration Revived the Auto Industry by Reducing Oil Use

5 Ways the Obama Administration Revived the Auto Industry by Reducing Oil Use

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Daniel J. Weiss and Jackie Weidman outline the five major Obama administration policies that helped the auto industry and the nation by creating jobs, reducing oil use, saving families money, and cutting pollution.
Daniel J. Weiss and Jackie Weidman outline the five major Obama administration policies that helped the auto industry and the nation by creating jobs, reducing oil use, saving families money, and cutting pollution.

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Published by: Center for American Progress on Aug 27, 2012
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1Center or American Progress | 5 Ways the Obama Administration Revived the Auto Industry by Reducing Oil Use
5 Ways the Obama AdministrationRevived the Auto Industry byReducing Oil Use
Daniel J. Weiss and Jackie Weidman August 2012
Te Obama adminisraion oday promulgaed uel-economy and carbon-polluion lim-is or 2017 o 2025 model cars. Tese essenial sandards will reduce oil use, save ami-lies money rom lower gasoline purchases, creae jobs, and reduce emissions responsibleor climae change.Under hese new sandards U.S. companies will produce vehicles ha employ modernuel-saving echnologies and ensure ha heir cars remain compeiive wih oreign modelsduring uure oil and gasoline price shocks. Recen evens reemphasize he imporance o reducing dependence on oil wih is volaile price. Gasoline prices are rising again due osupply concerns relaed o sancions on Iranian oil. In addiion, he anicipaion o eco-nomic growh ha increases demand could enable speculaors o bid up oil prices.
1
 Te new uel-economy sandards are one o several acions he Obama adminisra-ion has aken o revive and srenghen he U.S. auo indusry. Te mos prominen, o course, was he bridge loans graned o General Moors and Chrysler in March 2009ha enabled hem o remain in business long enough o resrucure, begin o innovaeagain, and reurn back o proabiliy.One o he bailou sipulaions was ha he companies had o develop aggressive planso reurn o viabiliy by reducing coss and invesing in energy-ecien cars. Bohcompanies agreed o move oward a more uel-ecien ee.
2
In a March 2009 presssaemen Presiden Barack Obama described he bailou as a resrucuring processha would creae “a 21s cenury auo indusry ha is creaing new jobs, unleashingnew prosperiy, and manuacuring he uel-ecien cars and rucks ha will carry usowards an energy-independen uure.”
3
Because credi markes were rozen and he wo companies were eeering on bankrupcy,no privae lender would have come o heir rescue. Rep. Fred Upon (R-MI) noed ha:
 
2Center or American Progress | 5 Ways the Obama Administration Revived the Auto Industry by Reducing Oil Use
Tere was no one that could have picked up those pieces other than the ederal government.
4
In a jus-published book,
Te New New Deal
 ,
ime
magazine reporer Michael Grunwaldconcluded ha he auo-assisance program saved GM and Chrysler and prevenedhese wo companies rom dragging down he res o he U.S. indusry, paricularly sup-pliers. He deermined ha:
His [Obama’s] overhaul o the auto industry would become a stunning success, mini-mizing taxpayer losses, avoiding erasure o countless jobs, and restoring the Big Tree[Ford, GM, and Chrysler] to protability.
5
In addiion o he successul bridge loans here are ve oher major Obama adminisra-ion policies ha helped he auo indusry and he naion by creaing jobs, reducing oiluse, saving amilies money, and cuting polluion:
•
Fuel-economy and carbon-polluion sandards or 2012 o 2016 model cars sparked job growh in auomobile manuacuring and increased auomobile sales.
•
Fuel-economy and carbon-polluion sandards or 2017 o 2025 model cars willdouble heir uel economy and reduce oil use by 2 million barrels per day.
•
Te Recovery Ac invesed in uel-ecien vehicle research and developmen o spur job growh and increase inernaional compeiiveness.
•
Federal loans helped conver acories o he producion o uel-ecien vehicles.
•
Te “Cash or Clunkers” program increased vehicle eciency and helped save heauo indusry by jump saring demand during he dephs o he Grea Recession. We review hese below.
1. Fuel-economy and carbon-pollution standards for 2012 to 2016model cars sparked job growth in automobile manufacturing andincreased automobile sales
In May 2010 Presiden Obama nalized new, modern uel-economy sandards or hers ime in wo decades. Working wih U.S. and oreign auo companies, he Unied Auo Workers, saes, and oher sakeholders, he adminisraion developed a plan o improveuel economy o 34.5 miles per gallon or model year 2016 vehicles. Implemenaion o hese sandards are one o he reasons ha U.S. oil use and impors are lower.U.S. gasoline consumpion in he rs hree monhs o 2012 was down 124,000 barrels o oil per day compared wih his ime las year. Te Energy Inormaion Adminisraion cieshe improvemens in uel eciency as one o hese reasons, noing he sandards “helpreduce gasoline consumpion, as more ecien vehicles use less uel or each mile driven.”
6
A 21st century autoindustry that iscreating new jobs,unleashing newprosperity, andmanuacturing theuel-efcient carsand trucks that willcarry us towards anenergy-independentuture.
—President Barack Obama
 
3Center or American Progress | 5 Ways the Obama Administration Revived the Auto Industry by Reducing Oil Use
 A new repor sponsored by he Naural Resources Deense Council, he Naional Wildlie Federaion, and he Michigan League o Conservaion Voers, “How FuelEciency is Driving Growh in he U.S. Auo Indusry,” ound ha a renewed ocus onuel eciency also plays a criical role in reviving he auo indusry.
7
 Model year 2012 is he rs year ha auomakers are required o implemen he new san-dards, bu hey began improving uel economy beore he sandards ook eec. Wihin hepas year (2011-2012 year o dae) uel economy increased by 1.1 miles per gallon. Auocompanies added jobs while hey worked o comply wih he uel-eciency sandards. Inac, he auo indusry added over a quarer-million jobs—236,000—since 2009.Tese sronger sandards—rs adoped in a biparisan law passed by Congress and signed by Presiden George W. Bush in 2007—provide cerainy or auomakers and suppliers,allowing hem o inves in he echnologies necessary o reach uel-economy sandards.Bu job creaion isn’ he only posiive auo indusry rend. Reuers repored ha auosales “have been one o he brigh spos o he U.S. economy” over he pas severalmonhs.
8
Baum and Associaes’ recen uel economy analysis ound “sales increasing aa greaer rae han he economy.”
9
Te “seasonally adjused annual rae” or July was 14.1million unies, up rom 1.7 million rom his ime las year.
10
GM’s plug-in hybrid Chevy  Vol sold 1,849 new models in July, bringing heir year-o-dae sales over 10,000.
11
Volsales his year jumped 272 percen compared o he sales during he rs seven monhso 2011.
12
  Auomoive News repored ha new uel-ecien vehicles are he key drivers o he2012 increase in sales:
13
 
Te changeover to high-mpg [miles per gallon] models, in all segments is the key mar-ket driver this year. Dealers say it has been the release valve on pent-up demand as uel prices soared.
Te rs phase o improved sandards has helped he U.S. economy grow hrough increased vehicle sales. Dramaic uel-cos savings make vehicles wih high gas mileage more appeal-ing, paricularly when gasoline prices are high as hey have been in 2011 and 2012.Tese sandards will help proec drivers rom he impac o volaile gasoline prices onheir budge. For insance, seep prices his winer were ollowed by a signican decline, wih a subsequen upick in prices occurring now. Higher uel eciency will shield con-sumers rom hese unpredicable gasoline price shifs. A May 2012 poll by 
Consumer Reports
ound ha uel eciency is he number one con-cern or prospecive auomobile buyers:
14
 

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