Is A Battle Between Automakers And Washington Brewing?

Edward Niedermeyer
by Edward Niedermeyer
is a battle between automakers and washington brewing

As I write this, President Obama and his top environmental and auto regulators are gathering for a speech on “American energy security” at Georgetown University. In this speech, the President is expected to make the case for ramped-up CAFE standards, EV subsidies and other transportation-related energy efficiency goals, and based on his politically pragmatic framing of the issue as being about “energy security” rather than environmental prerogatives, it seems that he’s serious about creating new policy rather than merely playing to his base. But, according to the Detroit News, the automakers are not going to take increased regulation sitting down, but appear to be gearing up for the first major legislative clash over automotive regulation since the green-tinged bailout. Automakers have begun to push back on both fuel economy and stalled safety legislation, explains Alliance of Automotive Manufacturer’s spokesperson Gloria Bergquist.

Automakers have always supported legislation and regulations that are driven by data and sound science, and there have been some examples where there was more wishful thinking and targets being selected that weren’t based on the data. So we have become more outspoken on the need for data to drive policy decisions.

Of course, automakers haven’t always supported regulation of their industry… but this is clearly a change in tone from the cowed industry that collapsed into the government’s arms just a few short years ago. A battle is brewing, so let’s look at some of the flashpoints in this forthcoming conflict.

On safety, the administration has already begun to to pick its battles. It allowed the Motor Vehicle Safety Act to die in last December’s lame duck session, and has made no new efforts to push it back towards the President’s signature. It has backed away from power window “auto-reverse” regulation, and postponed final rulemaking for its new back-up camera requirement. But automakers want even more time for the backup camera legislation to take effect, and they’re holding their ground on another recent NHTSA rule regulating “ejection mitigation.” According to the DetN

A new rule on “ejection mitigation” — keeping drivers and passengers from flying out of a vehicle in a crash — is among the safety proposals at which automakers are balking.

The alliance wants NHTSA to reconsider a final regulation it adopted in January, saying aspects of it are “inappropriate” — especially the phase-in period, which requires full compliance by 2017. The rule, to be phased in starting in 2013, will require automakers to keep unbelted adults from moving more than 4 inches past the side window opening in a crash. The government says it could save 373 lives annually and cost automakers $500 million annually.

“These timing changes impose unreasonable and impractical burdens on vehicle manufacturers and have not been justified by the agency,” the automakers said.

Porsche AG says it can’t comply without a “major vehicle redesign.” Absent a redesign, it said, production of some vehicles could be halted.

But energy efficiency rules, the highlight of Obama’s about-to-commence speech, is where the real battle lines seem to be being drawn. Compliance with the 34.1 MPG by 2016 CAFE standard is expected to cost the industry $51.5b, and the regulations for 2017 and beyond, which will be announced this September, are expected to ramp up efficiency requirements even more aggressively.

The Alliance of Automobile Manufacturers says the next round of new rules is “likely to be significantly more expensive” than the first, and warned that if consumers don’t buy new hybrids and electric vehicles, the auto industry will suffer.

“If consumers do not buy the vehicles that manufacturers are required to produce, sales will fall, production will slow and manufacturers will be forced to eliminate jobs,” it said.

NHTSA and EPA are considering annual increases in fuel efficiency ranging from 3-6 percent between 2017 and 2025, which equates to a fleetwide average of 47 and 62 mpg by the period’s end. The range of government-estimated costs per vehicle is $770 to $3,500, depending on the stringency of the emissions limits.

Automakers says those estimates are “unrealistic” and pointed to a Center for Automotive Research analysis that said hiking fuel efficiency to 60.1 mpg could boost vehicle prices by 22 percent, cut sales by 25 percent and trim up to 220,000 auto sector jobs.

But if President Obama keeps the discussion framed as one of “energy security,” he may well be able to build a bipartisan congressional coalition for further energy-efficiency legislation despite the industry’s protests. After all, the bad taste of the auto bailout lingers on the national palate, and the industry can only portray itself as a victim so many times. Besides, not everyone in the auto industry wants to join the fight against fuel economy regulation. Hyundai, for example, has realized that it can make hay with consumers by conspicuously pledging to “over-comply” with CAFE. Like most conflicts, the lines of battle won’t be clear until it’s actually joined. And as it plays out, TTAC will be watching.
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  • GeneralMalaise GeneralMalaise on Mar 30, 2011

    "I am grateful … I made it clear … I said he needed to step down … I ordered … At my direction, America led an effort … I refused to let that happen … I authorized … And tonight I can report … I said … I am fully confident … I want to be clear … I refused to wait … I will never minimize … I am convinced … I, along with many other world leaders … I assigned our forces … I will never hesitate … As I have said before … etc." More of the relentless use of the vertical pronoun, as Obama plotted the demise of Ed Whitacre, former Government Motors chief...

  • Dr Lemming Dr Lemming on Mar 30, 2011

    For starters, I don't think the automakers have shifted at all when it comes to support for regulation. They have merely changed their rhetoric to appear less strident. It's pretty standard practice for any industry to wrap its opposition to a regulatory proposal by arguing that it doesn't reflect "sound science" (re: "My numbers are better than your numbers!"). The most astute comment made here was that the administration has no meaningful hope of passing new legislation. Not only will House Republicans quickly kill any Democratic proposals, but they could also try to unplug existing regulations by attempting to gut the appropriate budgets. They have already been working that angle on global warming. The dialogue on this thread is rather depressing . . . and another indication that the blogosphere needs a site that deals in a meaningful way with the role of the automobile in society. Bromides about the magic of the marketplace will get you only so far.

    • VanillaDude VanillaDude on Mar 31, 2011
      The dialogue on this thread is rather depressing . . . and another indication that the blogosphere needs a site that deals in a meaningful way with the role of the automobile in society. "Excuse me, sir! You wouldn't happen to have any Grey Poupon would you? The blogosphere at this site is indicating that my dialogue is not being addressed in a meaningful way, and my ego needs some of that delicious imported mustard to cover up the pointless bromides I am tasting here, sir! It is appalling what this country is turning into, some kind of mob-rabble driven anarchistic unenlightened poppycock that pays no heed to my astute advice as certified by Dr. Honoria Farnsworth-Packer, dean of the College of Liberal Arts at my Alma Mater, you know - FU!" "I say Good Day to you sir! Good Day!"

  • MRF 95 T-Bird Back when the Corolla consisted of a wide range of body styles. This wagon, both four door and two door sedans, a shooting brake like three door hatch as well as a sports coupe hatchback. All of which were on the popular cars on the road where I resided.
  • Wjtinfwb Jeez... I've got 3 Ford's and have been a defender due to my overall good experiences but this is getting hard to defend. Thinking the product durability testing that used to take months to rack up 100k miles or more is being replaced with computer simulations that just aren't causing these real-world issues to pop up. More time at the proving ground please...
  • Wjtinfwb Looks like Mazda put more effort into sprucing up a moribund product than Chevy did with the soon to be euthanized '24 Camaro.
  • Wjtinfwb I've seen worse on the highways around Atlanta, usually with a refrigerator or washer wedged into the trunk and secured with recycled twine...
  • Wjtinfwb Surprising EB Flex hasn't weighed in yet on it being the subject of a recall...