House Republican Report Says CAFE Favors US Automakers

Most of the auto industry and the United Auto Workers Union support federal fuel economy mandates aimed at doubling efficiency by 2025, but some in Congress led by California Republican Darrell Issa are still trying to oppose them.

In the words of Republican opponents, the Corporate Average Fuel Economy (CAFE) rules were a product of “a raw political process designed to appease environmental extremists,” and also “openly played automakers off of each other to gain a tactical advantage over the industry.”

CAFE is unrealistic and favors bailed-out U.S. automakers following closed-door negotiations, says a report to be released today by the staff of Issa, chairman of the House Oversight and Government Reform Committee, and thus CAFE represents unethical lawmaking at the expense of Americans.

“The inevitable product of this reckless process was a pair of rulemakings that reflect ideology over science and politics over process,” says the report, ” … Americans will be forced to drive expensive, unpopular and unsafe automobiles mandated by the Obama administration.”

As reported originally by the Detroit News, Issa is following on with his agenda noted last fall to call into question the motives and legitimacy of the intended CAFE mandates.

Among the automakers that do oppose CAFE are Volkswagen AG, Daimler AG, and Japanese automakers, as observed by the Detroit News citing words written in notes obtained from Toyota.

For their part, Volkswagen and Daimler didn’t sign agreements because they said CAFE gives an advantage to light trucks, primarily made by U.S.-based automakers.

Agreeing here and adding to the complaints was head of Toyota Motor Sales, Jim Lentz, who previously told former White House chief negotiator Ron Bloom that the Japanese automakers doing business in North America feel it is a raw deal.

According to the handwritten notes, “Japan is angry. Feel like they have been screwed,” Lentz reportedly said.

The Japanese also lobbied for more flexibility to use car credits for meeting truck standards.

But they were denied, and Toyota’s Tundra pickup was excluded in the definition of “full-sized” pickup truck, while the Detroit automakers which profit heavily from such light duty mainstays, do have their full-size trucks included in the definition. As written, the rules favor this class of vehicle and let them lag along behind stricter rules for smaller vehicles.

As a major purveyor of hybrids, Toyota had also asked for but was denied credits for these types of vehicles seeing its request as fair given that credits were extended to natural gas, flex-fuel and electric vehicles.

The CAFE rules were in short, an “old Detroit tactic. It may hurt me, but it hurts my competitors more,” reported the Detroit News of words said to be written by Lentz.

The state of California was also seen as playing a key role in strong-arming efficiency mandates through. As a state that has the right to refuse federal rules it does not like, and being the largest market, it carries a heavy stick at the negotiations table.

Among those who favor President Obama’s aim to reduce oil imports and use however, are proponents who describe CAFE as breaking through a logjam that had prevented stricter federal efficiency mandates.

The argument in favor of CAFE for the period 2017-2025 held by the Obama administration is the rules will more than pay for themselves despite adding an estimated $2,000 per vehicle by 2025 – or $3,000 per vehicle, including added costs from the 2012-2016 rules finalized in 2010.

In short, the rules will cost the industry $157.3 billion while saving $1.7 trillion at the pump, says the Obama administration, and thus proponents such as UAW President Bob King have said CAFE will be good for the economy, environment and national security.

The White House did not offer an official response to Issa and company, as spokesman Clark Stevens said he had not read the report as of yesterday. In an e-mail he did offer some general thoughts on the latest attempts to obstruct passing of CAFE.

“Despite the efforts of a small few who are apparently opposed to steps that will protect Americans at the pump and reduce our reliance on foreign oil, the administration will continue to take steps to support this unprecedented agreement and ensure these savings for consumers are realized and the cars and trucks of the future are built here in America,” he said.

Similarly, Maryland Rep. Elijah Cummings, the Oversight Committee’s senior Democrat, said in an e-mail Republicans are attacking something that stands to create jobs, save money and decrease petroleum dependence.

“Any allegations that the White House is seeking to weaken the auto industry are simply ridiculous — this is the White House that saved the auto industry from its near-collapse,” he also said.

But citing e-mails also – these being between automakers and Obama administration officials, Issa’s report is repeating allegations similar to those we’ve also seen made by the National Auto Dealers Association.

“The impact of this process will not be immediate but will be felt by manufacturers forced to make, dealers forced to sell, and consumers forced to purchase far different, more expensive and less safe vehicles,” said the report.

Where are things now? One thing most will benignly agree to is the rules were seen as a compromise all around.

Overall the yeas have outweighed the nays, not least of those in favor being environmental groups which initially wanted to see 62 mpg instead of the 54.5 mpg standard by 2025 that will amount to low 40s on window stickers.

“No one wants to see Congress fighting progress toward fuel efficiency, especially when the industry that is regulated supports the agreement,” said Roland Hwang, transportation program director at Natural Resources Defense Council.

And at this point, despite vigorous attempts along the way to condemn the CAFE rules, it remains to be seen whether anyone will be able to stop them.

The final rules will be revealed Aug. 15, and are still believed to be on course as a standard to shape the industry through the remaining first quarter of this century.

Detroit News via Automotive News

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  • Modern Marvel Fan

    Darrell Issa is an idiot. He is willing to attack anything that Obama does, regardless whether it is right or wrong. I don’t like Obama, but there is nothing wrong with the CAFE rules. Toyota can build more efficient trucks if it feels it needs to meet that rule. Why NOT adding a hybrid system to the Tundra?

  • Jim Jones

    Another pure example of republicans hating American workers. When will the sheep out there stop listing to right wing bs radio and stop voting them in office???

  • Capt. Concernicus

    Funny how America political leaders cry protectionism when other countries do exactly what we’re doing here.

    In the words of Rodney King. “Can we all get along’?”

  • Toyotasux

    Screw Toyota. How many bailouts and zero interest loans have they gotten from their government over the years, as well as other Japanese companies? Why does the Japanese close their markets to foreign goods and manipulate their currency to give their corporations an advantage. In my estimation, Toyota needs to shut up and be happy they were allowed to come in this country and take so much market share.

  • otter

    I think Issa is correct. To summarize:

    According to the Detroit News:

    Detroit’s full-size trucks received an exemption that freed them from fuel-economy increases during part of the 2017-2025 ramp up, and Toyota wanted the Tundra to receive the same exemptions. But the rules excluded Toyota’s pickup truck from the exemption.
    German automakers wanted more credits for diesel cars but received none. Daimler, parent to Mercedes and Smart, ultimately opposed the new CAFE rules, as did Volkswagen.
    Hybrid pickups — but not other cars — received CAFE bonuses, which is something Honda and Toyota questioned. Two hybrid pickups exist, and both are GMs.

    I have also read that the PT Cruiser was being classified as a truck to lower the fleet mpg CAFE averages for Chrysler.

    That does sound like favoritism.

  • Tgordi

    Favoritism or not, I don’t see anything wrong with increasing fuel efficiency, which results in lees damage to the environment, less dependence on foreign oil, and less money into the pockets of oil companies and oil-producing countries.

  • Roy_H

    “That does sound like favoritism.”
    Yes, it is and it should be spread across all the auto lines, not just trucks. I remember Toyota successfully sued GM for advertising their stainless steel exhaust system, because Toyota systems rusted out, somehow an American court judge ruled it was unfair for GM to advertize its advantages. I do not understand a country, mired in debt, being taken over by foreign industry, stubornly promoting foreign industry over its own. Working hard at economic suicide, who’s the winner here? Why are they doing it?

  • Van

    Thanks Otter, your brief post made clear what the controversy is really about, Crony Capitalism and special treatment for UAW made vehicles.

    Perhaps you could explain the charge that the proposed government regulations will cause us to drive “less safe” vehicles?

  • Modern Marvel Fan


    Perhaps you should explain to us about all the assistance that Japanese government gave to Toyota to help it survive the economic crisis. Also, all those Trucks were made pre-bailout and CAFE numbers. If Toyota want it, then why don’t it extend its “Crappy LOW tech” Synergy drive system to its Tundra truck?

    “less safe”? How many safety recalls have Toyota had recently?

    Stop being a Toyota fan boy… Toyota is there to make money. It will do whatever it can to buy publicity and polticians to achieve that.

    Just like the recent episode of the “Modern Family” where the show did a major sell out on the Prius V…

  • Van

    @MMF, you post like a UAW thug, sir. The CAFE classification extends to trucks built in the future. Strike one.

    The overblown safety issues of the past are not what those opposed to the CaFE standards were referring to. Strike two

    I am a fan of Toyota, but I am also a fan of Ford. I oppose air pollution, but I also oppose those who would hijack the environmental movement for a command and control central government agenda.

    Those that defend their views with ad homenins, misrepresentations, and non-sequiturs destroy the the credibility of those pushing for cleaner air and less dependence on foreign oil.

    BTW, the Ford C-Max seems superior to the Prius V any way you look at it. 🙂