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


President Barack Obama gets behind the wheel of a new Chevy Volt during his tours of the General Motors Auto Plant in Hamtramck, Michigan.

The Obama administration is about to promulgate fuel-economy and carbon-pollution limits for 2017 to 2025 model cars. These essential standards will reduce oil use, save families money from lower gasoline purchases, create jobs, and reduce emissions responsible for climate change.
Under these new standards U.S. companies will produce vehicles that employ modern fuel-saving technologies and ensure that their cars remain competitive with foreign models during future oil and gasoline price shocks. Recent events reemphasize the importance of reducing dependence on oil with its volatile price. Gasoline prices are rising again due to supply concerns related to sanctions on Iranian oil. In addition, the anticipation of economic growth that increases demand could enable speculators to bid up oil prices.
The new fuel-economy standards are one of several actions the Obama administration has taken to revive and strengthen the U.S. auto industry. The most prominent, of course, was the bridge loans granted to General Motors and Chrysler in March 2009 that enabled them to remain in business long enough to restructure, begin to innovate again, and return back to profitability.
One of the bailout stipulations was that the companies had to develop aggressive plans to return to viability by reducing costs and investing in energy-efficient cars. Both companies agreed to move toward a more fuel-efficient fleet. In a March 2009 press statement President Barack Obama described the bailout as a restructuring process that would create “a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us towards an energy-independent future.”
Because credit markets were frozen and the two companies were teetering on bankruptcy, no private lender would have come to their rescue. Rep. Fred Upton (R-MI) noted that:
There was no one that could have picked up those pieces other than the federal government.
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