U.S. automaker CEO’s apparently lobbied President Trump to weaken strong fuel economy standards during a White House summit last week. But moving backward on fuel economy standards would be bad deal for America. It would not just threaten our health and energy security, but also jobs and investments in factories across the country.
Strong fuel efficiency standards have been a key element driving the revitalization of the Detroit automakers from the depths of the Great Recession. Over the past two years, fuel economy levels and vehicles sales are hitting historic highs while industry profitability is strong. Since the 2009 low point, 700,000 more auto jobs have been added to the economy. The fuel efficiency supply chain stretches across 1,200 factories and 48 states. And those factories are running at essentially full capacity, building cleaner cars that are competitive with the latest technologies from Munich, Tokyo, and Seoul.
And at least up to now, the automakers have had regulatory certainty to enable them to make investments in a sustained, orderly manner. Those days are at risk of being over.
In the private meeting with President Trump, Bloomberg reports that Mark Fields, CEO of Ford, claimed that 1 million jobs are at risk if strong fuel efficiency standards remain in place. But Mr. Fields’ reported claim of economic calamity must be viewed in the light of the industry’s history of “the sky is falling,” claims whether it was government requirements for seatbelts, catalytic converters, or air bags.
Even more recent history gives reason to be skeptical of such a claim of job loss. Automakers claimed in a 2007 court case that they would likely have to stop selling products in California if the state implemented its 2016 clean car standard, the same standard they eventually agreed to in 2009 to meet nationwide.
In fact, an analysis I did of the automakers bailout plans they submitted to Congress in 2008 clearly showed they were planning to meet California’s standards, while they were still telling the California regulators, the courts, and the public an entirely different story. Today automakers are complying with the 2016 standards California had originally proposed and then were adopted nationally. And as I pointed out earlier, sales and profits are near historic highs. Hardly the economic calamity claimed.
Recent detailed technical assessments by the U.S. Environmental Protection Agency, California Air Resources Board and an independent scientific review committee clearly demonstrate the automakers can meet the 2025 standards with known technologies, on time, at reasonable cost. Strengthening standards that cut drivers’ fuel bills has strong bipartisan consumer support, including two-thirds of Trump voters, according to recent survey by Consumer Federation of America.
Attacking standards would create chaos and uncertainty for automakers’ business plans. The last major clean car battle took over six years to resolve, from 2002 when California adopted its law to when the automakers agreed to nationalize the California standards. Rolling back existing U.S. EPA regulations and the rule of law can’t be done overnight. It would face strong legal challenges from states and environmental groups. Furthermore, even if the U.S. EPA standards are weakened, California and 12 other states that represent one-third of the total market with California standards still have the right under the federal Clean Air Act to enforce their own clean car standards.
Maintaining strong fuel efficiency standards is a critical driver for innovation, investments, and job growth. Opportunistic attacks on these commonsense standards will threaten, not save, jobs.