Economics of the Automotive Industry

Flynn, M., Sims, M., Alkire, K.F. 2002. Detroit Delays Fuel Gains at its Peril.
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Two recent policy decisions appear to treat the automotive industry well, especially the traditional Detroit manufacturers and the United Auto Workers. In January, the Bush administration shifted the focus of government-industry technology efforts to develop more fuel-efficient vehicles and pushed the time line out another decade. In March, the automakers celebrated the Senate's defeat of a bill requiring 50 percent higher corporate average fuel economy (CAFE) by the middle of the next decade. It opted instead for one that exempts pickups from future fuel efficiency increases and delays any CAFE decision up to 18 months.