Decision by GM, FCA to side with Trump in mpg fight draws fire

Keith Laing
The Detroit News

Washington — Democrats in the U.S. House of Representatives railed against General Motors Co. and Fiat Chrysler Automobiles NV on Tuesday for siding with the Trump administration in a legal fight with California over gas mileage rules for the nation's auto industry. And in testimony before a House panel Tuesday, former California Gov. Jerry Brown singled out GM, calling Detroit's biggest automaker a "lapdog" for the president.

The two automakers, together with Toyota Motor Corp. and the Association of Global Automakers, which lobbies for foreign-owned carmakers in Washington, said Monday they want to intervene in a lawsuit between California and the federal government to argue in favor of the Trump administration's position that Washington should create one set of gas mileage rules for all the nation's cars. 

Since the earliest days of Trump's presidency, the federal government and California have been at odds over gas-mileage rules in a fight that is dividing the auto industry.

U.S. Rep. Harley Rouda, D-Calif., chided the carmakers in a hearing Tuesday for their "poor" decision and praised Ford Motor Co. and three foreign automakers that reached a separate deal with California to voluntarily meet higher fuel-economy standards. 

"I commend those automakers, Ford, Volkswagen, BMW and Honda, that have been courageous enough to look forward to the future, that recognize that California is attempting to solve a planetary crisis while the Trump administration sticks its head in the sand," said Rouda, chairman of the U.S. House Oversight and Reform Subcommittee on Environment.

"Unfortunately not all auto companies have taken this tack, and I urge those companies to reconsider their poor decision not to comply with California's higher standards," Rouda continued.

But U.S. Rep. James Comer, the top Republican on the panel, backed the automakers who sided with President Donald Trump, saying the intervention "appears to signal that large segments of the auto industry are in agreement that the regulatory certainty that would come from a single national standard is preferable to the one where California and any other state can develop their own standards." 

Comer defended the Trump administration's effort to roll back Obama-era mpg rules and also revoke California's right to set its own gas mileage standards. 

Appearing before the House subcommittee, former Gov. Brown said: "It's really something, at the very moment when California is burning, General Motors jumps on the bandwagon as Trump's lapdog, joining the opposition to undercut California's rules."

GM and Toyota declined to comment. FCA said in a statement it "supports continued fuel economy improvement and we are investing accordingly." 

Since the earliest days of Trump's presidency, the federal government and California have been at odds over gas-mileage rules in a fight that is dividing the auto industry. California is the nation's largest state, and accounts for 12% of the U.S. auto market. Thirteen states and Washington, D.C., have adopted California’s gas mileage rules.

GM, Fiat Chrysler and Toyota are siding with the Trump administration in a legal fight with California over the gas mileage rules that govern the nation's automobile industry.

The Trump administration has moved to relax stringent gas mileage rules that were enacted by the Obama administration that would have required automakers to produce car fleets that averaged over 50 miles per gallon by 2025. Trump has proposed a freeze in the mandate after 2020, when their lineups must average 39 miles per gallon. California, which helped craft the Obama-era rules, has sued over the rollback and has promised to also sue over the revocation of its right to set its own rules. 

California in July reached an agreement with Ford, VW, Honda and BMW to voluntarily increase the average fuel economy of their fleets from 2021 levels by 3.7% per year, reaching an average of nearly 50 mpg by 2026. The U.S. Department of Justice has launched an antitrust investigation into that agreement.

Carmakers note the U.S. auto industry achieved a record average of 24.9 miles-per-gallon in the 2017 model year, according to most recent figures released by the U.S. Environmental Protection Agency. But automakers fell short of marks set by the Obama administration, and most manufacturers only remained in compliance with the standards by cashing in credits from previous model years.

Automakers were required by the Obama-era mileage rules to achieve a fleetwide average of 29.3 miles-per-gallon in "real world" testing for 2017. Not only did they fail to meet that threshold for last year, but the EPA said preliminary data shows automakers are likely hit an industry-wide average of only 25.4 miles per-gallon for 2018, which would fall short of the 30.6 miles-per-gallon milepost.

Honda led all automakers for 2017 with an average of 29.4 miles per gallon for its fleet, followed by Mazda with an average of 29 miles per gallon and Hyundai with an average of 28.6 miles per gallon. 

Ford, GM and Fiat Chrysler ranked 11th, 12th and 13th respectively among 13 manufacturers who were measured. Ford and GM averaged 22.9 miles per gallon, while Fiat Chrysler averaged 21.2. 

Carmakers attribute the lagging fuel economy performance to changing consumer preferences that have shifted heavily toward SUVs and pickups since the Corporate Average Fuel Economy (CAFE) standards were finalized in 2012. The standards average the fuel-economy of every car and truck sold by a carmaker, so if a carmakers sells large numbers of trucks or SUVs, it drags down the overall fleet performance.


Twitter: @Keith_Laing