Fuel Economy Fights Have Tarnished Auto Industry Image

California's 2004 CO2 law requires the auto industry to cut emissions by one-third in new vehicles by 2016 or reach an average of 36.8 mpg, setting a deadline four years earlier than the new federal law.

Published: 07-Jan-2008

Hopes that the new energy measure would defuse the controversy over fuel economy appear to have been premature.

Executives now admit, grudgingly, that endless fights over fuel economy have badly damaged the reputation of the Big Three, undermined their marketing efforts and helped Asian automakers make even deeper inroads into the U.S. market by attracting a new generation of young buyers to the brands.

Alas, the ink was hardly dry on President Bush's signature on the new energy bill when the issue came roaring back to life as the U.S. Environmental Protection Agency ruled California's efforts to regulate greenhouse gas emissions were out of bounds.

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