Since the AXP is all about incentivizing and publicizing highly fuel-efficient (and thus very-low-emitting) vehicles, you might not think we have much sympathy for OEMs who have difficulty getting much past 20 or 25 MPG on average. But far be it for us to lecture (after all, we haven't built a car ourselves yet, unless you count that converted wagon from third grade...). The millions and even billions of dollars, yen, and Euro's that have been poured into powertrain development over the decades make clear how hard this task really is. While one has to take the huffing and puffing about this that emanates from Nagoya, Stuttgart, and Detroit with large doses of skepticism, the challenge remains immense.
If you don't believe the OEMs -- or even the think-tanks and analytical labs like ORNL -- there is some recent quasi-independent confirmation of this from the cold hard world of Wall Street. As Alex Taylor recently wrote in Fortune (and Alex is always very well informed), the private equity firm Cerberus, which is in the final stages now of buying Chrysler from its German parent, is very worried about the new tighter MPG regulations Congress is considering. In fact, he writes, "the moneymen from Cerberus behind the private equity buyout for Chrysler are said to be threatening to walk away from the deal if the new requirements go through." Whether Cerberus believes Chrysler's own publicized punumber of $6,000 or more per vehicle to meet the standards we can't say, but the possibility that the biggest automotive deal of this millenium could go South based on what might seem to us a minor tightening of CAFE tells you how worried they may be. Of course, for them it is all about making more or less money, so it is hard to feel sympathetic. What is striking, however, is of all the issues Chrysler has to face: UAW contract talks in the Fall, gigantic underfunded retiree health care liabilities, an overbuilt dealer network, and brands that have weak appeal (as a result of which many Chryslers are sold primarily to fleets rather than to individual customers)... the only one Cerberus sees as a deal-breaker is the MPG challenge.
The point of all this? First, we at AXP are under no illusions as to how hard the task we've set for our entrants is. And second, we are going to be very, very proud of the winner, knowing as we do what an achievement victory is going to be.