Carmakers gear up for White House meeting on mpg rules

May 9, 2018 GMT

Washington — President Donald Trump will meet with top executives from several automakers at the White House on Friday as his administration weighs major changes to gas mileage and trade rules.

The meeting, which will be the first joint trip by carmakers to the White House since January 2017, occurs against a backdrop of proposals from the Trump administration to freeze gas-mileage increases after 2020 and drastically alter rules for duty-free treatment under the North American Free Trade Act.

Automakers have generally been in favor of the administration’s efforts to ease gas-mileage rules that would have required them to produce fleets averaging 54.5 miles per gallon by 2025. Under the Trump administration’s current proposal, the mandate would be frozen at nearly 39 miles per gallon from 2020 until at least 2026.

The White House meeting will be attended by representatives from automakers that include General Motors Co., Ford Motor Co. and Toyota Motor Corp.

GM CEO Mary Barra, who will attend the White House meeting, on Tuesday released a letter to employees detailing her stance in favor of a single national fuel economy standard.

“Throughout this process, we have been transparent about our priorities for modernizing current rules: General Motors supports establishing one national set of fuel efficiency requirements, with flexibilities that take into consideration recent industry developments such as vehicle sharing and self-driving electric vehicles,” Barra wrote.

Automakers have expressed concern the Trump administration’s decision to reverse course on gas mileage rules could split the nation’s auto industry into two regions with distinct emission rules. California sets its own emissions standards under a waiver included in the 1970 Clean Air Act. A dozen other states have adopted the California rules, accounting for one-third of the U.S. auto market.

California and 16 other states are suing the Trump administration over its effort to freeze the fuel rules.

Rebecca Lindland, senior analyst at Kelley Blue Book, said the White House meeting is a chance for automakers to get on the same page and try to find common ground with the Trump administration, which has vacillated between siding with carmakers on fuel regulations and angering them on trade.

“This is a good opportunity for the industry to try to get on the same page, or at least understand each others’ views,” she said.

Gloria Bergquist, vice president of communications and public affairs for the Alliance of Automobile Manufacturers, which lobbies for major carmakers in Washington, said automakers are hoping for a cool-down in the rhetoric over fuel economy standards.

“We support continuous improvements in fuel economy, but we need to align standards with market demand,” she said in an email. “And we support a negotiated agreement for One National Program because it is best for our customers, who avoid higher prices from the redundancies of three government agencies regulating the same thing. And an agreement among the federal government, California and the auto industry is better than years of litigation.”

Lindland said automakers face tough balancing acts in arguing for flexibility in the gas-mileage rules.

“They don’t want to come across as being unconcerned about the environment,” she said. “They also have legit concerns about their balance sheet because consumers, for the most part, are not buying the most fuel-efficient and clean cars on the market today, as far as electric vehicles.”

She said automakers are likely to try to impress the importance of setting one set of gas mileage rules for the whole country instead of lobbying for lowering the standard to a specific number.

Environmental and consumer advocacy groups in Washington have railed against the Trump administration’s efforts to ease mileage standards. Public Citizen, Sierra Club, Greenpeace USA, Environment America, CREDO, Care2 and SumOfUs drove a 2006 Ford Focus they dubbed the “Dirty Ford” from Washington to Michigan to deliver a petition with 250,000 signatures from people in favor of keeping the gas-mileage rules.

“Dirty cars are bad for all of us, but especially the most vulnerable populations, including the poor and people of color who disproportionately live near freeways and extraction sites,” said Natalie Nava, project leader at Greenpeace USA, in a statement.

Ford has defended its record on fuel economy against previous attacks from environmental lobbyists in Washington. The carmaker pointed Tuesday to a March 27 post by CEO Jim Hackett on Medium.com that said: “We support increasing clean car standards through 2025 and are not asking for a rollback.”

“We want one set of standards nationally, along with additional flexibility to help us provide more affordable options for our customers,” Hackett wrote.

The fuel economy rules at issue were enacted in 2012 and began taking effect with the 2017 model year. They called for ramping up from the current fleet-wide average of about 35 miles per gallon for cars and trucks, to more than 37 miles per gallon in 2019 and nearly 39 miles per gallon in 2020. The eventual goal of 54.5 was set for 2025. The target was later reduced slightly to between 50 and 52.6 miles per gallon, which equates to roughly 40 miles per gallon in real-world driving.

The CAFE rules, intended to reduce dependence on foreign oil and reduce greenhouse gases, were put in place by the Obama administration when gas prices topped $4 per gallon.

Automakers have since argued that the rules are too stringent, and drivers have demonstrated in recent years that they are less interested in fuel-efficient cars and electric vehicles with gas prices that are now around $3.


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