Auto Leaders to Press for More Federal Aid

On the Hill in March, from left, UAW president Ron Gettelfinger, GM CEO Rick Wagoner, Toyota North America president Jim Press, Ford Motor CEO Alan Mulally and Tom LaSorda of Chrysler. (By Ken Cedeno -- Bloomberg News)

"It's not going to be the blank check some automotive companies are hoping for," said Thilo Koslowski, Gartner's lead auto analyst based in San Jose.

Obama proposed increasing fuel-economy standards 4 percent each year and providing $4 billion for U.S. automakers to retool plants to build more fuel-efficient vehicles.

By 2015, he aims to get 1 million U.S.-built, plug-in hybrid vehicles -- autos potentially capable of getting 150 miles per gallon -- on the road. He said the government should invest $150 billion over 10 years to accelerate the commercialization of such hybrids, along with pushing the construction of low-emission coal plants and providing training for green jobs.

Under his administration, he said he would mandate that all new vehicles be capable of using biofuels and other alternatives.

And Obama said he would promote the sale of these autos. Obama promised to offer a $7,000 tax credit for people who buy advanced technology vehicles, similar to a measure approved by Congress last month. Within a year, the entire White House fleet is slated to consist of plug-ins, as security permits, and by 2012 half of the cars the federal government buys are supposed to be plug-in hybrids or all-electric.

Obama has not taken a position on a possible merger between GM and Chrysler. Obama, who voted in favor of the larger $700 billion rescue package, has remained mum on the possibility of broadening the plan to include automakers.

Speaking on NBC last week, Obama said he would meet with Detroit's Big Three and United Auto Workers "to sit down and craft a strategy that puts us on a path for an auto industry that can compete with anybody in the world."

But the $4 billion he proposed for research and development, as well as $7,000 incentives for consumers, might not be enough to perfect technologies, mass produce them and make the vehicles affordable on such an fast timetable, according to a CSM Worldwide report analyzing Obama's plan.

Plug-in hybrids from General Motors and Toyota both rely on pricey lithium-ion battery technology. GM said its plug-in Chevrolet Volt, slated to appear in showrooms in 2011, will be priced at as much as $40,000.