Automakers turn up heat on mileage proposals
A line of SUVs
KAI RYSSDAL: It's either plain bad luck or terrible timing that Detroit seems to be turning around just as Congress is turning to global warming.
GM's restructuring to get in tune with America's shifting taste for more fuel efficient cars. But even today's profit isn't enough to get the world's largest automaker to support stricter fuel economy rules.
Executives from U.S. and foreign automakers were in Washington today — along with the United Auto Workers union — lobbying hard against proposals requiring higher mileage. It's a rare alliance. And it offers a glimpse into just how high the financial stakes are as Congress tries to craft climate change legislation. Sam Eaton reports from the Marketplace Sustainability Desk.
SAM EATON: For the past three decades the fuel economy standards for cars and trucks sold in the U.S. have remained unchanged — a fleetwide average of just under 25 miles per gallon. Pressure in Washington to address climate change is now driving a new round of proposals to boost mileage requirements, or CAFE standards, to about 35 miles per gallon over the next decade. But automakers are crying foul. Their argument? It would cost too much. Peter Brown with Automotive News says they may have a point.
PETER BROWN: They're struggling. So anything they have to spend on fuel economy that they think their customers don't want to pay for is a big problem for them. They don't have any extra money.
A White House estimate says boosting fuel economy standards could cost the industry about $114 billion. Automakers favor climate change legislation that wouldn't single out any one industry — something like an economy-wide cap on greenhouse gas emissions.
But David Friedman with the Union of Concerned Scientists says putting a price on CO2 would only raise the cost of gasoline by about 20 cents a gallon, leaving little incentive for U.S. consumers to abandon gas guzzling SUVs.
DAVID FRIEDMAN: We've seen gasoline prices more than double over the past five years with only a small impact on gasoline demand and greenhouse gas pollution. The automakers know very well that a 20-cent increase in gas prices is going to leave them off the hook.
Friedman says the irony is that if Congress had been raising fuel economy standards over the past three decades, U.S. automakers today wouldn't be losing so much ground to Toyota and its fleet of fuel-efficient cars.
In Los Angeles, I'm Sam Eaton for Marketplace.