"Four years ago, the American auto industry was so opposed to higher fuel economy standards that executives of Detroit camped out in Washington in an unsuccessful bid to undercut them," Bill Vlasic opened his July 28 front page article. [1]
But now "when President Obama announced even stricter standards — in fact, the largest increase in mileage requirements since the government began regulating" fuel economy, "the chief executives of Detroit's Big Three were in Washington again," this time "standing in solidarity with the president."
Of course, a few paragraphs later, Vlasic allowed that the massive federal bailout of GM and Chrysler helped push the auto industry into obeisance:
...Detroit was faced with an undeniable political reality: there was no graceful way to say no to an administration that just two years ago came to its aid financially.
That being said, that doesn't mean the auto industry doesn't have legitimate cost concerns about the new federal mandates. Of course, Vlasic downplayed such cost concerns, citing a Nissan official as having a sunny outlook on meeting the government's goals:
'The standards are going to be quite stringent and a challenge,' said Scott Becker, a senior vice president in the United States for the Japanese automaker Nissan. 'But given the range of technologies that we either have currently or are developing, we will be in a position to meet them.'
Also left out of Vlasic's story was how Washington may end up shoveling taxpayer money to Detroit to help government-owned automakers to attempt to meet the new standards.
From the Heritage Foundation's The Foundry blog this morning [2]:
Has the promise of government subsidies been enough to convince the automakers and the United Auto Workers (UAW) to get on board with the job-killing standards? It sure looks that way. Despite reports that the government has 'reached an agreement' with automakers on the new standards, the auto industry initially lobbied against [3] the new rules, going so far as to prepare TV ads against the regulations to run in seven states. Strangely, the ads were pulled a week ago [3], possibly out of fear of further antagonizing the Obama Administration. And don't forget, the industry faced the prospect of a higher than 60 mpg standard, as reported last October [4]. Given no other option, it looks like they took the lesser of two evils.
The UAW, too, had a change of heart on the regulations. Autoline Daily reports [5] that the UAW met with automakers over its concern that the rule would mean fewer jobs because of its impact on SUV and truck production. But then on July 18, the UAW joined with members of the BlueGreen Alliance—which includes labor unions and environmental activist groups like the Natural Resources Defense Council and the Sierra Club—in calling for increased fuel efficiency standards in a letter [6] to President Obama.
The change in the UAW's position might seem puzzling, were it not for a significant point in the letter. In addition to supporting the fuel efficiency standards, the UAW and the BlueGreen Alliance wrote that they support [6] 'federal efforts to assist the industry retool to meet demand for cleaner, more efficient cars.' And there's the rub. Going green will require more green from the federal government in the form of cash for retooling—more government subsidies from the Obama Administration. Not surprisingly, the UAW is all for it. A blue-green alliance, indeed.
Also ignored by Vlasic was any consideration of how lifting the fuel economy standard results has resulted in a tradeoff whereby more efficient automobiles are less-suited to protect drivers and passengers in a crash, as Reason.com's Shikha Dalmia noted in a July 26 blog post [7]:
[T[o the extent that carmakers have complied with CAFE, it is less through radical innovation and more by simply slashing vehicle weight. In the 15 years after CAFE standards were first introduced in 1974, vehicle weight diminished by 23 percent. But every 100-pound weight reduction results in a 4.7 to 5.6 percent increase in the fatality rate. A 2002 National Academy of Sciences study concluded that CAFE's downsizing effect contributed to between 1,300 and 2,600 deaths in a single representative year, and to 10 times that many serious injuries.