Detroit jumps into the fuel economy debate

Roland Jones Business news editor • Profile • E-mail

For decades, as Americans enjoyed low-priced gasoline and bought large, gas-guzzling pickup trucks and sport utility vehicles, Detroit’s Big Three automakers kept their distance from the debate about fuel economy. The feeling was that a new set of tough fuel guidelines could hurt them financially. But now there’s a new economic impetus for automakers to jump into the debate.

A recent Supreme Court decision over global-warming emissions suggests that the discussion about greenhouse gas is about to have a big impact on the nation’s largest industries, and automakers are at the focal point of that change.

In early April, the Supreme Court ruled that the federal government has the authority to limit greenhouse gas-producing emissions from vehicles. The primary way to do that is to increase the fuel economy of automobiles, experts say, making the prospect of new fuel economy standards likely for cars and light trucks, the category that includes pickups and SUVs.

New rules would have a major impact on the nation’s automakers. General Motors, Ford and Chrysler have been racking up heavy losses, pummeled by Asian automakers that have taken a growing share of the U.S. market. The Big Three also are saddled with billions of dollars in health care and pension obligations. All three have announced massive layoffs, plant closures and a shake-up of their product offerings.

Passenger cars and light trucks generate about one-fifth of the world's emissions of carbon dioxide, one of the principal gases implicated in global warming, according to the Environmental Protection Agency. Carbon dioxide, methane and other gases trap energy from the sun, which in turn warms the surface of the Earth, contributing to global climate change.

Now political pressure to curb emissions is intensifying, and automakers are working to make sure their voices are heard as new fuel economy rules are being debated. Proposals to change fuel economy rules range from raising them as high as 35 miles per gallon from the current level of about 27.5, to a more modest increase of one mile per gallon over the next few years.

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One reason automakers want to jump into the debate is the growing desire among the general public to address climate change, said Mike Stanton, a former lobbyist for the Big Three and now president of the Association of International Automobile Manufacturers, a trade group that represents Japanese automakers.

“The new Democratic control of the House and Senate is driving that agenda, and so is the Supreme Court ruling,” Stanton said. “And there’s a correlation between carbon dioxide emissions and the growth of the economy, so we want to make sure a reduction in emissions doesn’t come as dramatic change to the economy.”

Automakers have operated under a carbon-emission limit for more than 30 years due to federal  fuel-economy rules. But for years General Motors, Ford and Chrysler have resisted any calls to tighten those rules. As a result, the corporate average fuel economy or “CAFE” standards for passenger cars have remained unchanged at 27.5 mpg.

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