Effects of environmental expectations and changing product demand due to the crisis

Global warming and related concerns regarding carbon emissions have heightened sensitivity to gas mileage standards and environmental protection worldwide. In a 2007 edition of his book An Inconvenient Truth, Al Gore criticized the Big Three. "They keep trying to sell large, inefficient gas-guzzlers even though fewer and fewer people are buying them." For example, Japan requires autos to achieve 45 miles per US gallon (5.2 L/100 km; 54 mpg_-imp) of gasoline and China requires 35 mpg_-US (6.7 L/100 km; 42 mpg_-imp). The European Union requires 52 mpg_-US (4.5 L/100 km; 62 mpg_-imp) by 2012. By comparison, U.S. autos are required to achieve only 25 mpg_-US (9.4 L/100 km; 30 mpg_-imp) presently. Other nations have adopted standards that are increasing mpg requirements in the future. When California raised its own standards, the auto companies sued.^[1][2]

The Big Three received funding for a $25 billion government loan during October 2008 to help them re-tool their factories to meet new fuel-efficiency standards of at least 35 mpg_-US (6.7 L/100 km; 42 mpg_-imp) by 2020. The $25 billion in loans from the Department of Energy to the auto manufacturers were actually authorized by Congress early this year but not funded. Automakers could use these loans to "equip or establish facilities to produce ‘advanced technology vehicles’ that would meet certain emissions and fuel economy standards; component suppliers could borrow funds to retool or build facilities to produce parts for such vehicles."^[3]

References

1. ^ Gore, Al (2007). An Inconvenient Truth. Rodale. ISBN 978-0-670-06272-0. 
2. ^ An Inconvenient Truth - Online
3. ^ Consumer Reports - $25 billion for Auto Industry

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Video: The U.S. Auto Industry and the Ripple Effect