The U.S. auto industry, along with the rest of America, must prepare for the inevitable bump-up in gasoline prices to avoid a devastating economic shock like the one suffered during the summer of 2008. But this is no time to panic or do stupid things.
A look around the North American International Auto Show in Detroit last week revealed a bumper crop of small, fuel-efficient vehicles -- many with alternative powerplants -- that consumers will demand when pump prices reach some as-yet-undetermined threshold.
The vehicles on display in Detroit were developed in part as a response to the national standard that mandates a corporate average fuel economy of 35.5 mpg by the 2016 model year. The standard was derived in 2009 in a relatively painless process that gave automakers a single, national target.
By September, the Obama administration plans to devise fuel economy standards for 2017-25, which will mandate that companies achieve more miles per gallon. Some automakers have questioned their ability to hit a lofty target, the cost of doing so and whether consumers would be willing to buy the resulting vehicles.
Last week, there were signs that the process will be contentious. The Alliance of Automobile Manufacturers wrote to two Republican committee chairmen in the U.S. House, expressing fears that the California Air Resources Board is trying to set its own standards and asking for congressional scrutiny.
CARB, in turn, accused carmakers of trying to renege on their pledge to build fuel-efficient vehicles.
The Obama administration must maintain control. It is in everyone's best interest to have a transparent process to establish a single, national fuel economy standard that is achievable and affordable.