Mitch Bainwol is the chief executive of the Alliance of Automobile Manufacturers. That’s the trade group that has been making dire predictions about the CAFE auto emissions standards the EPA locked in as the Obama administration was heading for the exits. Mark Fields, the CEO of Ford, told anyone within earshot those standards would throw one million Americans out of work and cost consumers billions. Donald Trump made a big show of flying to Michigan to announce his EPA would conduct a thorough, top to bottom review of the CAFE auto emissions program and come up with recommendations within a year.
Meanwhile, California, the state that most responsible for CAFE rules in the first place, told automakers it plans to make its emissions rules even tougher. The automakers clearly hoped for quicker action by the Trumpeters and when they didn’t get it, they had to face up to reality. The cars they will build in 2022 are being designed now. They need to know what the rules of the game in the future will be and they need to know soon.
This week at the New York auto show, Bainwol was busy telling people the car companies don’t want to roll back existing standards. What they want is a rational, predictable, stable policy.” He hopes “that over time, responsible parties will come together and have an honest conversation about what the data is.”
Bainwol, being the good PR flak he is, went on to say, “The talk of rollback is fallacious. What we are talking here is the nature of the slope. We will get to the Obama numbers (54.5 mpg). We will get beyond the Obama numbers. The question is when and how.” Can you say “slow walk,” boys and girls?
Business wants certainty. When the automakers full court press didn’t work, the car companies decided to fall back on that old standby — delay. They have delayed seat belts, crash test standards, and air bags. They said every one of those would throw people out of work and cost consumers money. Yet they are rushing ahead with autonomous car sharing — which is expected to put billions of dollars in their pockets. It’s all just a matter of priorities.
The White House plans to hold negotiations with car companies and California. A deal would remove uncertainty for automakers , who need years of lead time to engineer future models and want uniform rules across all 50 states. Without a deal, automakers could be forced to meet one set of standards for California and and the other states that have adopted its rules and another set of rules for the rest of the country.
Environmentalists say the rules are saving consumers billions of dollars in fuel. Dave Cooke, a vehicle analyst at the Union of Concerned Scientists, said in a blog post recently that “fuel economy regulations have been critical in moving the needle towards energy efficiency. The auto industry is historically resistant to change, pushing back on safety improvements like air bags and seat belts.”
Automakers want one set of rules and are willing to soften their assault on CAFE to get it. For his part, Trump is finding out it is a lot easier to Tweet than to govern. The Obama EPA went to extraordinary lengths to buttress its rules with reams of data. If Trump or Scott Pruitt tries to undo them, environmentalists will challenge any such move n court. The courts will not substitute their judgment for the EPA’s findings. As long as the rules are amply supported by solid data, and lots of it, the rules are virtually impervious to a legal challenge.
The automakers have overplayed their hand and realize they have no trump card left. They now want peace and predictability. Such is the nature of politics.
Source: Fortune Image credit: AAM