For the second time in less than six months, Detroit's Big 3 automakers will have a sit-down with President Bush, though this time with a slightly different agenda. Executives of the Big 3 are expected to express their support for the President's plans to lower U.S. energy usage by 20% over the next 10 years, largely through the use of alternative energy sources. Not expected to be on the agenda this time are issues affecting the profitability of the auto industry such as foreign exchange rate disadvantages and mushrooming unionized healthcare costs. High on the agenda will be the industries attempts to build flex-fuel vehicles that can run on both conventional and alternative fuels, which President Bush has repeatedly endorsed, including during a visit to two gas-electric hybrid plants in the Midwest a week ago. The Big 3 stress they can not make flex-fuel automobiles profitable unless energy production companies greatly increase the availability of biofuels and fueling stations multiply greatly.
Sources: Wall Street Journal, Business Week, Reuters
Commentary: The Race for Fuel Efficiency is On • 2007 State of the Union Address: Should Alt. Energy Stocks Expect a Boost? • The Rise of Toyota and the Demise of the American Auto Industry
Stocks/ETFs to watch: DaimlerChrysler (DCX), Ford Motor Co. (F), General Motors Co. (GM). Competitors: Toyota Motor Corp. (TM), Honda Motor Co. (HMC), Nissan (OTCPK:NSANY)
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