Carmakers Join GOP Lawmakers to Stymie Fuel Economy Hikes

In recent weeks, it appeared that major auto companies had finally stopped fighting higher fuel economy standards—and were ready to make it happen. But backsliding and heel dragging is back in season.

Issa and Toyoda

Rep. Darrell Issa, R-Calif. and Toyota President Akio Toyoda in Washington in February.

“Whatever goal [the Obama administration] establishes, Toyota will be prepared to meet,” said Jim Colon, Toyota vice president, speaking at the recent Washington auto show. “If it’s 62 miles a gallon, we’ll be able to achieve that.”

“I think the industry can do anything it wants when it puts its mind to it,” Mark Reuss, General Motors’ top North American executive, said at the National Automobile Dealers Association annual convention, earlier this month.

Meanwhile on Capital Hill, Republican House Oversight Committee chairman Darrell Issa in January enlisted more than 160 industry groups and conservative organizations to submit letters testifying to a recent perceived “overregulation” of corporate activity. Central to the letters were complaints about the EPA and other federal and state regulatory bodies that have sought to step up environmental enforcement in areas like industrial emissions and automobile fuel economy.

Two Faces

In a letter submitted by the Alliance of Automobile Manufacturers—a lobbying organization whose members include General Motors, Toyota and 10 other automakers—the group’s vice president Shane Karr said that his industry faces the prospect of losing as much as 25 percent of its light vehicle sales if the EPA increases its Corporate Average Fuel Economy standard to a proposed 60 mpg by 2025. “At the federal level, it is critical that standards carefully balance the important national interests of reducing oil use and GHG gas emissions while supporting continued economic growth and jobs,” wrote Karr. “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.”

This comes at a time when AAM members have made great strides in producing affordable high-mpg cars, and are prominently featuring their hybrids and plug-in cars in advertising campaigns. The Alliance is running its own campaign demonstrating how its members are now offering 160 innovative high-mpg models.

Shane’s letter also expressed concern that the California Air Resources Board could act to subvert the EPA process by enacting its own standards in advance of a final ruling. As the United States’s largest car market, the Golden State has for decades used its leverage to move the industry toward cleaner, more fuel efficient cars. But the industry contends that California and the 14 other states that follow CARB guidelines are overstepping their powers in creating separate fuel economy benchmarks to those of the federal government.

This is the same argument that the auto industry made for decades, but that was apparently resolved in 2009 when President Obama ended a years-long battle between California and the federal government over the state’s attempt to create a separate fuel economy mandate. The parties agreed on a matching set of CAFE standards for the years 2012 through 2016, and already started the push to even higher MPG numbers for 2017 through 2025.

In a response letter admonishing AAM member corporations like Toyota, Ford, and General Motors for not staying the course, Mary Nichols, chairman of the California Air Resources Board, took issue with the alliance’s assertions. “For the Alliance to suggest we are no longer committed to a cooperative effort is disingenuous at best, and incorrect,” wrote Nichols. She said that Karr’s letter to the Oversight Committee “brings into question the auto industry’s desire for continued cooperation.”

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  • TD

    What’s it going to be GOP?

    Are you for States rights and letting California and other states set their own regulations?

    Or are you for a strong Federal government with the right to enact meaningful regulations across the nation?

  • Shines

    The AAM might be trying to point out that if light vehicles (cars) are required to so efficient that their size/comfort/performance/safety becomes a factor and the price of fuel is not high enough people will just buy the next segment – light trucks. Of course saying jobs and the economy will be hurt by this is bogus – people still need to buy transportation vehicles. Gutless politicians need to increase gas taxes and reduce taxes elsewhere.

  • Carl

    The new standards may cause a jump in new car sales.
    Get a fun to drive car while you can!

    I am sooo looking forward to driving a 60 mpg box-O-shit.

  • JamesDavis

    Well, there goes the GOP on their backsliding – two-faced, rich bitch rants and virgin pig squealing again. Does the GOP only want big government when it benefits them; do they only want to balance the budget when it benefits them; do they only want to restrict states when it benefits them; do they only want tax breaks when it benefits them; do they only want tax increased when it benefits them? Go ahead and increase the tax on gas and put it out of reach of the common worker, that will benefit the GOP and keep the common worker impoverished where they can’t even afford to drive their vehicle to work. That gas tax should also cut down on carbon emissions, but that will not benefit the GOP. We don’t need electric cars, that won’t benefit the GOP.

    Thank God, Nissan is not controlled by the GOP and we can depend on them to try their best to get those 1 million electric cars on the market by 2015 and they will also get above 60+ MPG on their fossil fuel vehicles before 2015.

    Thank you, Nissan, you are quickly becoming my favorite auto manufacturer and as soon as you get a great looking affordable electric two-seat sports car, like the 1970’s Nissan 280Z use to be, I will drop my fossil fuel Ford like a hot egg and buy yours.

  • Nelson Lu

    JamesDavis, your praising of Nissan and your swipe at Ford is perplexing, given that Ford currently has as many electrical models on the market (one) as Nissan, by the end of the year will have one more, and by the end of next year will have at least one, possibly two, plug-in hybrids in the market whereas Nissan will have none.

  • Charles

    As noted the GOP likes states rights when that is how they can progress their agenda. Not so much otherwise. So what is the GOP’s agenda? To me it looks like power for power’s sake.

    When the GOP talks about a balanced budget, people should just cringe in horror and disbelief. Until the current financial crises hit the GOP was the group that ran up the national debt. Even now the GOP is not the least bit serious about the debt. You cannot reduce the debt without raising taxes.

    The GOP should drop the elephant for the grasshopper.

  • Anonymous

    This story suggests that government regulation (CAFE standards) somehow bring about more fuel efficient vehicles. Fuel injection replaced carb’s in the 1980″ and leftist liberals claimed the improved performance was the result of their self serving regulations.
    Then for more than 20 years, vehicle mileage decreased under the supposed positive influence of CAFE standards, as safety regulations added weight to vehicles. Now we have the twin boost of direct injection and electrical assist, giving us about 20% improved mileage.
    Compare the Buick e-assist with the standard model. And when the next generation of Lithium batteries hits, we will get another big jump.

    The idea that regulations drive innovation is just another leftist myth, pushed by the same folks who designed the Soviet economic model.

  • Anonymous

    Carl says:

    “The new standards may cause a jump in new car sales.
    Get a fun to drive car while you can!

    I am sooo looking forward to driving a 60 mpg box-O-shit.”


    nobody’s stopping you from driving a bus if you enjoy driving a large gas guzzling vehicle. even gm proved (with volt) you don’t necessary have to drive a tiny car to achieve 60 mpg equivalent. stop thinking like the old days and wake up to a new reality.

  • MrEnergyCzar

    If they don’t increase the MPG to 60 they’ll loose 50% sales because no one will be able to afford to drive them….


  • JamesDavis

    That is okay, “Nelson Lu”, as long as Nissan floods the market with affordable all electric vehicles. I am so sick and tired of these roller coaster gas prices that I can scream and our big three automakers dragging their heels and feeding us all their pathetic excuses and lies. I have been with Ford ever since I got my driving license at 16 (40 years) and I have always loved their 60’s Cobra and their 60’s up to 70’s Mustang and I now drive a 2005 Mustang, but if Ford doesn’t want to convert one or both of those vehicles to all electric, I will drop Ford in a heartbeat for a Nissan all electric sports car; they are currently thinking about coming out with a two seater that looks similar to the old Dotson, but with a new twist that makes it look even better than the Telsa, and you know that Telsa has to best looking all electric two seater on the market – but no one can afford it.

    So if Nissan can deliver what the common working American wants and our three big auto makers refuse to, then I will go with Nissan.

  • Anonymous

    Nelson Lu said: “Ford currently has as many electrical models on the market (one) as Nissan …”

    Hmmmm, the Transit Connect Electric uses an electric powertrain manufactured and integrated by specialty upfitter Azure Dynamics.

    – the motor, NOT by Ford;
    – the transaxle, NOT by Ford;
    – the battery, NOT by Ford.

    – ‘glider’ i.e. the body shell – assembly at Ford Otosan plant in Kocaeli, Turkey
    – final assembly by Azure Dynamics Corporation

    So, how much of the ‘electric’ content of the vehicle comes from Ford???

  • Nelson Lu

    Anonymous, it’s called a “Ford Transit Connect Electric.” In my book, that makes it a Ford. Just as if Tesla actually produces EVs for Toyota and they are sold as Toyotas, they would be Toyotas even if they are produced by Tesla. (Although I am still not convinced that Tesla will ever have the ability to mass-produce anything.)

  • Anonymous

    Nelson Lu said: “Anonymous, it’s called a “Ford Transit Connect Electric.” In my book, that makes it a Ford.”

    Just for interest, will Ford dealers be able to perform any ‘service’ on the electric components of these ‘Ford’ Transit Connect Electric?

  • Anonymous

    Automakers like GM, Ford and Toyota instead of just keep talking their talk, saying they are ready for better mileage in tomorrow’s world, they should stand up and show us what their true colours are:
    either correct the action of Alliance of Automobile Manufacturers or quit the ‘alliance’ altogether; otherwise they are just paying lip service.

  • Anonymous

    Nelson Lu said: “Anonymous, it’s called a “Ford Transit Connect Electric.” In my book, that makes it a Ford. Just as if Tesla actually produces EVs for Toyota and they are sold as Toyotas, they would be Toyotas even if they are produced by Tesla.”

    According to this, the ‘Ford Transit Connect Electric’ is, quote: ‘only partly a Ford vehicle. The Transit Connect Electric’s ‘manufacturer of record’ is Azure Dynamics.”

    If what is reported is true, then the true identity of such vehicle may not be Ford. It is a Ford, perhaps, in name only.

    Would you look into it and report back?

    The article also mentioned that: “How much did Ford have to do to get the electric van into production – aside from making the liquid-fueled Transit Connect in the first place? We don’t know for sure, but there were only five Ford employees who worked full-time on the Transit Connect Electric program.”

    Oops. Five employees doesn’t sound many, don’t you think? Congrats to Ford to pull off an ‘electric vehicle’ program with FIVE employees. (If Ford can run an electric vehicle program with five staff, it makes me wonder why Ford announced to hire hundreds, if not thousands, of engineers recently.)
    Alternately, are they all involved in training the dealers to service the vehicle? Haha.

    Furthermore, in a separate article, Autoblog Green also reported that “Azure Dynamics has announced that it has signed deals with the final two organizations to join the Ford Transit Connect Electric’s ‘Lead Customer’ program.”

    It is note worthy that it included a press release from Azure and it was Azure which signed the agreement with its LEAD customers.
    Hmmm, where is Ford? It seems that company’s interest is just to show off the car in auto shows and earn some green bragging right.

  • Shines

    @Anon – it’s easy to spin an article one way or another isn’t it?
    I read it this way: Azure has an idea for an excellent automotive electric propulsion system but no vehicle. Ford is working on EV technology but is behind in the game. They partner with each other. Ford already spent millions developing the Transit Connect. Ford pays Azure to incorporate their EV technology in the Transit Connect. I am sure Ford provided a lot of funding to Azure to help them make that happen. Azure’s technology is then sold nation (World?) wide through Ford’s dealership network. Looks like a win win to me. Ford hires 5 of their own staff to help Azure with the integration of their system in the Transit. There is way more to a vehicle system than just the electrical system. So saying Ford pulls off an electrical vehicle program with a staff of five is not accurate.
    Nice spin though.

  • Anonymous

    shines said:
    – Ford pays Azure to incorporate their EV technology in the Transit Connect.
    – [s/he is] sure Ford provided a lot of funding to Azure to help them make that happen

    Fact or speculation?
    Any published report(s) that can substantiate your ‘claims’??

  • Shines

    Anon you are right – I was just speculating on Fords providing funding. My bad – I can’t substantiate my claim.
    However, they did supply a whole vehicle platform for Azure.
    They did partner with Azure and AM General on assembly and Johnson Controls for the battery.
    An electric vehicle has been produced. And of the big three this one is mostly Ford. Spin it any way you want, it takes a lot of effort to coordinate the integration of vehicle frame, propulsion system and power/battery supply. It seems Azure did most of the work on this. But in the end if you want to buy one you’ll have visit your local Ford Dealership. Same with the Focus EV or Fusion and Escape hybrids.

  • Anonymous

    Just went to Azure’s web site. It seems the buyer of Transit Connect have to see ‘selected’ Azure authorized Ford dealers, not just any ‘local’ Ford dealer one might expect.

    Another myth busted.

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