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The notion of government assistance for private industries can be controversial, as can be the idea of government mandates for industries. The former are expensive and can be seen as using public funds to further private interests. The latter can be said to constitute ill-advised interference with the functioning of the marketplace. Early in the Clinton Administration, the prospects and pitfalls of such public investment come under consideration as they relate to the US auto industry. An administration which hopes, in part for environmental reasons, for the development of a much more fuel efficient car, but one which also wants to demonstrate that, as one of "New Democrats," it will not turn to increased regulation, seeks to build an alliance with American automakers on a middle course. The Partnership for a New Generation of Vehicles links the capacities of a wide range of existing federal government programs, including research laboratories, with the work of US Car, a research consortium of the Big 3 automakers. But few new public funds would be invested in the partnership. The case allows for discussion of both whether public support for automotive research is a good idea, and for discussion of how such a program would be structured. More broadly, it raises the issue of the advisability and implementation of so-called industrial policy.