Ford, FCA oppose Trump’s proposal on gas mileage rules

Nora Naughton
The Detroit News
Fiat Chrysler Automobiles NV, maker of the Ram pickups, joined rival Ford Motor Co. in opposing a Trump administration plan to ease gas mileage rules.

Dearborn — Two Detroit automakers, environmental advocates and lawmakers all reiterated their opposition to the Trump administration's current proposal to relax existing gas mileage rules, asking for a different path to a single national standard for emissions and fuel economy.

Ford Motor Co. and Fiat Chrysler Automobiles NV both opposed the proposal to freeze fuel economy standards in 2020, calling instead for a strategy that eases standards set during the Obama administration without freezes or rollbacks. They're also eager to avoid establishing two emissions standards for the country — one for California and a dozen coastal states and another for everyone else.

Critics say the automakers are driving a tight line on proposed fuel-economy rule changes: the Trump proposal is considered too abrupt and the Obama targets are considered too lofty given overall trends in the industry, namely comparatively meager demand for electric and hybrid vehicles in the U.S. market.

 "The big question that has to be answered is how do you generate consumer demand" for electric vehicles? said Michelle Krebs, an analyst for Cox Automotive. "You can put regulations in place and force automakers to build these cars, but you can't force American consumers to buy them."

Automakers say that sales of electric vehicles and hybrids — vehicles critical to improving average gas mileage fleet — are still too low to meet fleet fuel efficiency standards set by the Obama administration in 2012. The electric vehicle segment accounted for a little more than 0.5 percent of the U.S. auto market in 2017. That's expected to increase to 1 percent by the end of this year.

“FCA supports the policy choice in favor of ongoing fuel economy improvements in the fleet, but that policy needs to be based on market realities as they have evolved since 2012,” FCA’s vice president of global fuel economy Steve Bartoli said in testimony before NHTSA and the EPA Tuesday. “In business and in government, we have to make decisions based on the best information available to us at the time, but we also must be nimble enough to adjust our plans when the facts on the ground change.”

Ford’s global director of sustainability and vehicle environmental matters, Bob Holycross, echoed this sentiment, saying in his testimony that the Blue Oval does not support “standing still.”

“We need a consistent, stable regulatory framework in which to make these capital-intensive investments, including policies that will help drive demand for emerging technologies,” he said.

The Tuesday hearing in Dearborn was the second of three to take place nationwide this week. The first was in Fresno, Calif., Monday and the last is in Pittsburgh Wednesday. General Motors Co. did not testify, opting instead to provide written comments on the agencies’ Notice of Proposed Rulemaking by the October 26 deadline.

The National Highway Traffic and Safety Administration and the Environmental Protection Agency earlier this year proposed freezing the mandate after the 2020 model year, when automakers will be required to build fleets averaging about 39 miles per gallon fleet wide.

The agencies have also indicated the federal government could push to revoke a longstanding waiver allowing California and roughly a dozen other coastal states to set their own stricter auto emissions standards — a move that would be met with litigation, the states have said.

That's a prospect Rep. Debbie Dingell, who testified before NHTSA and the EPA Tuesday, wants to avoid.

"This should not be taken to the courts," Dingell, D-Dearborn, told The Detroit News. "I'm very focused on keeping everyone at the table, and if California is at the table — if they agree to the standards — I know (the standards) are OK." 

The federal move to freeze gas mileage benchmarks was initially touted as a helping hand to the U.S. automotive industry. But automakers and the groups that lobby for them pushed back against the proposal, instead supporting a move to a more measured path to improved fuel economy that includes reaching a single national standard.

The Alliance of Automobile Manufacturers, a lobbying group that represents most automakers in the U.S., said this single standard is needed to ensure the health of the industry going forward.

“One national program enables (automakers) to keep new vehicles affordable, so more Americans can replace older vehicles with models that are cleaner, safer, and more energy-efficient,” said Chris Nevers, the alliance’s vice president of energy & environment.

The move to a single national standard seems to be common ground for the administration, the automotive industry and environmentalists. But it's the route to getting there that divides the parties.

The automotive industry still wants to see an easing of fuel economy standards set during the Obama administration, which would have required automakers to produce fleets averaging more than 50 miles per gallon by 2025. Some environmental advocates, however, say any relaxing or rolling back of standards is a step in the wrong direction.

"No one wins if we move backward," former state Rep. Rashida Tlaib, said in her testimony, in which she focused on the health and environmental impacts of fossil fuel emissions. "Yes, the economics are important ... but growing up in southwest Detroit, I want to focus on the human impact."

Tlaib, poised to be the first Muslim woman elected to Congress, said she wants the federal government to keep in place what was agreed to under the Obama administration.

"Moving backwards or slowing it down would actually hurt the initiative of moving toward really, truly addressing the impact on public health, the environment and climate change," Tlaib told The News. "I think it’s critically important that we as a federal government provide support for (the industry) to continue supporting the current standards."

And as NHTSA and the EPA look to ease U.S. gas mileage rules, other major automotive markets globally are clamping down. China, India and Europe are all considering bans on gasoline and diesel engines, and Chinese regulators are slowly phasing out internal combustion engines in favor of electric cars.

Ceding a leadership role in global fuel economy standards could threaten the automotive industry's revival since the Great Recession, said Zoe Lipman, director of the vehicles and advanced transportation for the BlueGreen Alliance, which works together with American labor unions and environmental organizations. 

"Leading standards have been critical to the automotive recovery," Lipman said before the hearing, "and they remain critical to sustaining it."

Twitter: @NoraNaughton