One Million Jobs Lost Due to Fuel Economy Regulations? Not So Fast, Mr. Fields

Jon LeSage
by Jon LeSage

Ford CEO Mark Fields used a potential worst-case scenario as the premise for his statements last month when he claimed new federal fuel economy rules would cost the nation one million jobs.

Independent industry analysts and environmental groups looked into Fields’ comments and found huge job losses were just one potential — and unlikely — consequence in a September report by the Center for Automotive Research, Automotive News reported.

Fields made the claim while speaking last month at the National Automobile Dealers Association convention in New Orleans. He didn’t reveal which studies he was citing, though a Ford spokesperson stated Fields made reference to a one report by the Center for Automotive Research (CAR) in Ann Arbor, Mich., which it published in September.

“The point that we made, as a group, on regulations and fuel economy and one national standard, we were not advocating for getting rid of the standards,” Fields said. “We think having one national standard for fuel economy is really important. And we said, various studies have said up to 1 million jobs could be at risk if we’re not given some level of flexibility on that and aligning with market realities, so that really resonated with him,” Fields said in New Orleans.

Fields was referring to a meeting he’d just attended with General Motors CEO Mary Barra, Fiat Chrysler Automobiles CEO Sergio Marchionne, and other automotive executives at the White House on Jan. 24.

The Ford CEO has been vocal over previous Environmental Protection Agency head Gina McCarthy’s sudden decision last month to finalize the 2025 fuel economy rules. Fields and other auto executives think the second phase of the policy is too strict and unrealistic based on low gasoline prices and consumer preferences for trucks and SUVs.

The CAR study presented one possible scenario from the federal fuel economy rules where 1.13 million jobs could be lost. The study used inflated data and ruled out other potential realistic scenarios, analysts have said.

“It’s a particular case taken with a particular set of assumptions that ends in an extreme result,” said Alan Baum, principal of automotive forecasting firm Baum & Associates.

Another scenario in the study finds about 144,000 jobs could be created in the auto industry from the federal rules. For the potential million-plus job loss, 322,000 would be in the automotive sector, according to the study. The remaining 805,000 jobs lost wouldn’t be directly related to vehicle manufacturing.

One other element of the study’s research assumes gasoline will stay at $2.44 per gallon as the national average in 2025. Field’s job-loss forecast is also based on the assumption that adding clean technologies —such as electrification, fuel cells, or 10-speed transmissions — will average $6,000 more in costs for new vehicles; in other scenarios explored in the CAR report, the study predicted cost increases of $2,000 and $4,000 per vehicle.

The International Council on Clean Transportation called the $6,000 estimate “grossly inflated” in a blog post.

The EPA has estimated the cost of adding fuel-saving technologies will range from $894 to $1,565 per vehicle. Baum’s study and others found the extra compliance cost would be about $1,900 per vehicle, starting from a 2010 baseline.

CAR President Jay Baron defended the study after the EPA attacked it. He noted new technology doesn’t always lead to more jobs.

Critics argue there are enough holes in the CAR report to make its conclusions debatable.

“It’s a bit distressing to see something thrown out there that a CEO of a major manufacturer should know is not a credible study,” said John German, senior fellow with the International Council on Clean Transportation.

A version of this article originally appeared on HybridCars.com.

Jon LeSage
Jon LeSage

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  • Snooder Snooder on Feb 07, 2017

    Btw, for everyone back slapping about how Fields is totally right and meeting a 54mpg fleet average is completely impossible, I got two words for you. "Kia Niro". Why the everloving fuck isn't Ford or GM producing a $22k hybrid crossover that doesn't look like ass?

  • St.George St.George on Feb 07, 2017

    Statistics show that 99.999% of all public figures/bodies (whether companies CEO's, governmental departments,political parties, charities, activists, environmental organizations, the media etc etc) cherry pick data from dubious (and biased) sources to try to validate their viewpoint. It seems to be getting worse and worse and I'm not sure where it will all end.....

    • Lou_BC Lou_BC on Feb 07, 2017

      @St.George - media, Universities, and the courts are valuable entities. They tend to hold the claims of politicians and other such manipulators of reality up to the harsh light of day. We are seeing attempts to destroy the validity of those pillars of society. That destruction is typical of any totalitarian regime. Where will it end? Unfortunately,it never ends well for the populace.

  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
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