The White House
is expected on Tuesday to announce new emissions standards that would cut greenhouse gas emissions from new cars and trucks by 30% by 2016. That's bad news and good news for domestic automakers already scrambling to restructure their operations and restore profitability.
Automakers have long fought tougher standards, complaining about the cost of better tailpipe emission technologies. The new plan would raise overall fuel economy standards to about 35 miles per gallon from the current 27.5 mpg, where they have sat since the early 1990s. With standards frozen, automakers in recent years have used engine technology improvements to raise horsepower rather than fuel economy, giving Americans the large, powerful SUVs that absent $4 per gallon gas prices consumers tend to crave (and pay up for).
But the White House plan also figures to provide savings for automakers by ensuring that a national fuel economy standard remains in place. California and 13 other states had been seeking to impose their own emission standards, higher than what the feds required. Those states were thwarted by the Bush administration, which had refused to grant waivers required under the Clean Air Act, but the Obama administration appeared to be more sympathetic to the states' demands.
While the automakers aren't crazy about higher standards, what they really fear is a Balkanized domestic market where their mass-produced products would have to meet different standards in Sacramento, Calif., and Toledo, Ohio. Allowing states to set their own standards would have created a Hobson's Choice of either spending billions to refine their assembly lines, or spending billions to litigate against the state rules and play the role of the greedy polluter in the process.
Given those options, look for automakers to quickly sign on to new, higher standards on a national level. -
Lou Whiteman
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