Auto Outlook: Federal fuel efficiency standards not a done deal

By AL SWANSON, United Press International
Auto Outlook: Federal fuel efficiency standards not a done deal
National Highway Safety Administrator David Strickland speaks during a news conference to launch the National Highway Traffic Safety Administration's "Click it or Ticket" seat belt campaign at the Department of Transportation in Washington on May 24, 2010. UPI/Roger L. Wollenberg | License Photo

The head of the National Highway Traffic Safety Administration says the proposed 54.5 mpg fuel economy standard will save U.S. consumers more than $1 trillion at the pump by 2025 and invited public comment.

David Strickland sought to allay Republican concerns the mileage agreement the government announced with 13 major automakers and environmental organizations in July was hatched in a secret backroom deal.


"Our doors were always open during that process," Strickland told a panel of the House Oversight and Government Reform Committee during a hearing on Capitol Hill Wednesday.

In July, the Obama administration unveiled proposed fuel economy standards for vehicles made from 2017 to 2025 after discussions with GM, Ford, Chrysler, Toyota, Honda, numerous environmental groups and even the United Auto Workers, but a proposal for a formal rule that was expected from NHTSA and the Environmental Protection Agency in September was delayed until mid-November, The Detroit News said.


"The deal is not done. We still have to propose -- bottom line," Strickland told subcommittee chairman Jim Jordan, R-Ohio.

Gina McCarthy, assistant administrator for the EPA's Office of Air and Radiation, said the mileage proposals had widespread support because the standard represents "a model for how government can work effectively with a wide range of stakeholders to develop thoughtful, data-driven regulations that benefit consumers, improve the environment and energy security, and are supported by the regulated industry."

Rep. Darrell Issa, R-Calif., chairman of the full committee, said the new standards would force automakers to produce lighter vehicles and accused the government of waging "a war on the private automobile and the private light truck."

However, Strickland said the proposed fuel efficiency standards were "safety-neutral" and stressed his agency would study how the standards would impact vehicle safety before signing off on them.

Jim Kliesch, research director for clean vehicles at the Union of Concerned Scientists, said 39 vehicle models already meet the proposed 2017 fuel economy standard, the FuelFix blog said.

"Vehicles which are lighter can be safe or safer than heavier vehicles," said Roland Hwang, director of the Transportation Program at the Natural Resources Defense Council based in New York.


Last month, Issa asked in a letter to Transportation Secretary Ray LaHood for a list of all transportation department and NHTSA officials that worked on the proposal, for economic and safety studies, and to provide all relevant communications with auto companies and California's Air Resources Board, Politico reported.

The EPA fuel economy standards that take effect next year would boost vehicle fleet mileage to 34.1 mpg by 2016.


Obama hailed as auto industry hero

Although the administration jobs bill stalled in Congress, Chicago Mayor Rahm Emanuel says President Obama is a hero for saving jobs in the U.S. auto industry.

In fact, Emanuel, who was Obama's White House chief of staff for two years, said there might not be a domestic auto industry had Republican presidential candidate Mitt Romney been in the Oval Office in 2008.

Former President George W. Bush gave GM and Chrysler a $25 million bailout before he left office and Obama added $60 million more, allowing General Motors Co. and Chrysler Group to shed crushing financial obligations and emerge from structured bankruptcies in 2009 with new management.


"There would not be an auto industry if Mitt Romney was president," Emanuel told David Gregory on NBC's "Meet the Press" in Chicago last week. "He would have said: "Let it go bankrupt.'"

Emanuel praised Obama for aggressively doubling down on American workers and saving hundreds of thousands of good paying jobs. He said the administration also boosted fuel efficiency standards for passenger cars and trucks and invested in improved battery technology for hybrid and plug-in electric vehicles.

GM has repaid much of its $49.6 billion in loans but the United States Treasury still holds 26.5 percent of the stock, Canada has a 12 percent stake and the government of Ontario 3.8 percent. Chrysler finished repaying $7.6 billion in loans in May. The U.S. government lost about $1.3 billion on the $12.5 billion Chrysler bailout, The Detroit News said.

Romney campaign spokesman Ryan Williams disagreed with Emanuel's assessment.

"Mitt Romney argued that instead of a bailout, we should let the car companies go through a restructuring under the protection of the bankruptcy laws. This is the course the Obama administration eventually followed, and if they had done it sooner, as Mitt Romney suggested, the taxpayers would have saved a lot of money," he told The Detroit News.


Emanuel's position appeared to resonate with Michigan residents, where most are directly affected by the auto industry's fortunes.

A poll of 600 likely voters conducted by EPIC-MRA of Lansing, Mich., found 35 percent of respondents said the state's economy had hit bottom and is improving, an increase of 4 percent from a similar survey in August.

Thirty-four percent said they thought the state's economy had bottomed out and was not showing improvement and 31 percent said the Michigan economy is still in decline.

The poll was conducted Oct. 1-4 and had a margin of error of 4 percentage points.

Study: U.S. fuel economy averages 22.1 mpg

Researchers at the University of Michigan Transportation Research Institute in Ann Arbor say mileage of new vehicles sold in the United States was flat for the second consecutive month.

The average fuel economy of vehicles bought in September was 22.1 mpg, the same as in August. It will be more than a decade before proposed federal corporate average fuel economy standards that would double mileage to 54.5 mpg by 2025 take full effect.

Average fuel economy for new vehicles purchased in the United States reached a high of 23 mpg in March.

"This decrease is likely related to a slight drop in gas prices since spring, because people tend to buy more fuel-efficient vehicles when gas prices go up," said Professor Michael Sivak, who runs the institute's Human Factors Group.


Sivak said despite being at a 12-month low, mileage for new vehicles sold still is 2 mpg better than in 2007.

"Our analysis suggests this long-term improvement in vehicle fuel economy is associated with both gas prices and unemployment being higher now than four years ago."


Worst flooding in 50 years halts Thai auto production

Floodwaters swamped new cars in a lot outside the Honda Motor Co. factory in Ayutthaya, Thailand, last week prompting automakers to stop vehicle production because of supply-chain disruptions.

The Wall Street Journal said the situation is analogous to the disruptions in the just-in-time delivery systems that hit Japan after the devastating March 11 earthquake and tsunami. Honda, Ford and Toyota all halted production at their parts plants in Ayutthaya, 42 miles north of Bangkok, although the Honda plant was the only one experiencing flooding.

Toyota, which has three production plants in Thailand capable of building 550,000 vehicles annually, said it would continue deliveries from inventory.

"We can't tell when we will be able to resume operations," a senior official told the Journal. "We are now evaluating the situation on a day-to-day basis."

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