Meet Us in the Middle: Automakers Plead for Peace, Compromise Between White House and California

Matt Posky
by Matt Posky
meet us in the middle automakers plead for peace compromise between white house and

The automotive industry is in turmoil. There’s an industrywide push toward electrification that has yet to prove itself as truly profitable, volume seems to be tapering off in the developed world, and emissions regulations aimed at improving air quality are operating counter to existing consumer tastes. As a result, automakers are scrambling to find the best path forward.

In 2017, that path involved encouraging the new U.S. president to roll back Obama-era fuel economy mandates, thus providing some breathing room and staving off fines as automakers began to realize they wouldn’t be able to meet tightening targets. The administration listened, leading to a proposal that would effectively freeze mileage standards at about 37 miles per gallon — rather than the previously decided 54.5 mpg — by 2025.

However, California and a coalition of supportive states claim they won’t be going along for the ride. This group says it will maintain the old standards, regardless of what the White House says. The staredown has automakers worried; they’ve now banded together to issue a letter asking both sides to calm down and keep talking.

According to The New York Times, a letter signed by 17 manufacturers requests that President Trump return to the negotiating table and attempt to find some common ground. California also received a copy on Thursday, with automotive firms suggesting that a midpoint between the old standards and the proposed rollback could be best option for peace.

The letter purportedly warns of industrial upheaval and economic instability stemming from an American market fractured by disparate fueling rules.”We strongly believe the best path to preserve good auto jobs and keep new vehicles affordable for more Americans is a final rule supported by all parties — including California,” the letter states.

Not every major automaker signed the document. While most of the big names are there, notably absent was Fiat Chrysler. As for the receptiveness of governmental groups, neither side appears to be particularly interested in working with the other. While negotiations took place in the past, the California Air Resources Board (CARB) previously claimed it was having trouble making any headway. The White House similarly said that California seemed unwilling to compromise and pulled out of negotiations, along with the Environmental Protection Agency and Transportation Department, in February. Their responses to the letter appears to be more of the same.

From The New York Times:

A White House spokesman, Judd Deere, in an email put the blame on California, saying the state “failed to put forward a productive alternative.”

[California Governor Gavin] Newsom said he is not interested in a “midway” deal requiring California to loosen its rules. “A rollback of auto emissions standards is bad for the climate and bad for the economy,” he wrote in an email. “I applaud the automakers for saying as much in their letter today to the President. We should keep working towards one national standard — one that doesn’t backtrack on the progress states like California have made.”

The letters are the latest twist in Mr. Trump’s effort to roll back regulations on auto manufacturing, an industry he has vowed to support. Some industry chief executives and lobbyists have been privately telling the White House for months that the president’s efforts may do more harm than good, but Thursday’s action represents a particularly strong pushback.

We’re skeptical about forecasting the economic impact of either course. Forcing elevated economy mandates on automakers that now seem incapable of reaching them will result in massive fines or money-losing, low-volume electrics plunked into a unready market. However, rolling back targets could discourage manufacturers from seeking out new technologies and innovations, while effectively forcing environmental groups sound their war horns. Yet it’s hard to feel bad for an industry that got itself into this mess by promoting the rollback, after claiming they could manage, it in the first place.

Automakers cling to the hope that California and the White House can still agree on one national standard, preferably one that splits the difference. That way, they’re not forced to cater to two domestic markets and can still enjoy some of the benefits of deregulation. That scenario doesn’t appear incredibly likely, as California is readying itself for battle. Xavier Becerra, the state’s attorney general, said recently that the region intends to sue over the automotive rules.

California’s fighting for its right to self-governance, something the most recent draft of the rollback would change — at least in regard to automobiles. But it’s also fighting for the right to set national automotive trends. Regardless of California’s intent, automakers would have to cater to it and its member states in a divided market.

The can of worms that concept would open is immense. Would California residents be able to cross state lines to purchase gas guzzlers? Would automakers have different lineups for different states? What happens if manufacturers fail to meet California’s guidelines? Couldn’t they just try to adhere to the more rigid economy laws they previously agreed to, regardless of whatever the government decides, and call it a day?

The White House previously called on the industry to choose a side. The EPA has basically said that the existing fuel economy targets are unsustainable ( something the Golden State disagrees with) and the current administration says it can’t work with California. With all options seemingly exhausted, the federal government wants manufacturers to plant their flags somewhere so it can decide how to proceed. And yet the industry’s fence-riding hasn’t come to an end.

As litigation seems inevitable at this point, we’re not even sure why automakers bothered to issue the letter. Perhaps companies realized a long, drawn out legal battle inside the government was less appetizing than the difficult process of boosting fuel efficiency. Perhaps they just want to look impartial after setting this conflict’s wheels in motion. Regardless, it still seems too little, too late. Unless the White House simply drops the issue or California blinks under the pressure, this will only get uglier.

[Image: Nithid Memanee/Shutterstock]

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  • Jeff S Jeff S on Jun 10, 2019

    Well the Earth itself will survive climate change but our species might not. I think there is a happy medium between not believing humans contribute to climate change and pollution and those who believe that we should regulate climate change and pollution out of existence. There are ways of addressing climate change and pollution without taking extreme positions.

    • See 2 previous
    • ToddAtlasF1 ToddAtlasF1 on Jun 10, 2019

      @philipwitak Find a new lie to lay down your life for. I don't know how the sheep can still fall for AGW. It's so 1989. It's one thing to be smart because you remember that AGW was what the apocalypse cult came up with after their 'new ice age' narrative couldn't stand into the '80s, but we've now had thirty years of a false crisis for even imbeciles to come to their senses. The only explanation at this point is that believers who aren't being compensated by avaricious plutocrats are comprehensively brainwashed. #walkaway

  • PandaBear PandaBear on Jun 10, 2019

    I like the way things are right now: CARB states do their own things so they can have less pollution as they want, and non-CARB states can roll coal if they want. Are you saying you want the non-CARB states to sell CARB vehicles because they want one standard? or are you saying that you want CARB states to ban certain kind of vehicles so they don't have enough volumes to be made, and you never get to buy them? Just let it be, if you have seen how bad the air can be without emission control (i.e. smog that brown up the air on spare the air day), you would want some sort of regulation too. One standard in the middle doesn't do much good. I don't care if mid-west wants to roll coal in their own backyard, and I am sure they don't care if CARB wants to have some more expensive vehicles that they don't force you to buy anyways.

  • Jeff S I am not a fan of Tesla and they were niche vehicles but it seems that they have become more common. I doubt if I get an EV that it would be a Tesla. The electrical grid will have to be expanded because people over the long run are not going to accept the excuse of the grid can't handle people charging their EVs.
  • AMcA The '70 Continentals and Town Cars may have been cousins to the standard body Fords and Mercurys, they didn't have to be disguised, because they had unique, unbelievably huge bodies of their own. Looking at the new 1970 interior, I'd say it was also a cost savings in sewing the seat. Button tufted panels like the 1969 interior had require a lot of sewing and tufting work. The 1970 interior is mostly surface sewing on a single sheet of upholstery instead of laboriously assembled smaller pieces. FINALLY: do I remember correctly that the shag carpet shown under these cars was a Photoshop? They didn't really go so peak '70s as to photograph cars on shag carpets, did they?
  • Inside Looking Out Toyota makes mass market cars. Their statement means that EVs are not mass market yet. But then Tesla managed to make mass market car - Mode; 3. Where I live in CA there are more Tesla Model 3s on streets than Corollas.
  • Ltcmgm78 A lot of dirt must turn before there's an EV in every driveway. There must be a national infrastructure plan written by other than politicians chasing votes. There must be reliable batteries that hopefully aren't sourced from strategic rivals. There must be a way to charge a lot of EVs. Toyota is wisely holding their water. There is a danger in urging unplanned and hasty moves away from ICE vehicles. Do we want to listen to unending speeches every election cycle that we are closer than we have ever been to 100% electrification and that voting for certain folks will make it happen faster? Picture every car in your town suddenly becoming all electric and a third of them need a charge or the driver will be late for work. This will take a lot of time and money.
  • Kendahl One thing I've learned is that cars I buy for local errands tend to be taken on 1,000 mile trips, too. We have a 5-speed Focus SE that has gone on longer trips than I ever expected. It has served us well although, if I had it to do over again, I would have bought an ST. At the time of purchase, we didn't plan to move from 1,000 feet elevation to 6,500. The SE is still adequate but the ST's turbo and extra power would have been welcome.