Trump forces Ford and GM to abide by the rules of fuel economy

DETROIT – Automakers are striving to change President Donald Trump's policies and policies to roll back the Obama era's energy consumption rules.

In Wednesday's tweets, Trump set fire to automakers, including Ford, for failing to back its plans. He described the car executives as "stupid", said the founders of Ford Motor and General Motors "are turning around" in the face of the "weakness of the current leaders of the automaker".

The attacks took place after Ford, Honda Motor, BMW and Volkswagen reached a voluntary agreement with California last month on fuel economy standards. The agreement provided relaxed standards instead of freezing the rules of the Obama administration, which most major automakers have supported.

Trump's attacks highlight the lingering dilemma of automakers wishing to satisfy the administration as they try to do what is best for businesses. The industry has already invested billions of dollars to improve energy efficiency and reduce carbon emissions from new vehicles. This includes a litany of new 100% electric and zero emission vehicles under development and on American roads.

Compliance with California rules is a good deal for automakers. The state accounts for about 12% of vehicle sales in the United States. Not selling locally and in other states that adhere to California regulations would hurt business.

No major automaker has supported a freeze of Obama's era standards, although many have advocated a re-evaluation of the rules to deal with current market conditions, namely gasoline prices. lower, 100% electric vehicles and increased sales of trucks and SUVs.

Ford, in response to Trump's tweets, said it remained "proud to lead the way in taking the right steps for the environment while protecting affordable prices for consumers and the health of the short-term sector. and in the long run ".

Ford's shares on Thursday morning remained relatively unchanged from their opening price of $ 9.05.

Proponents of the Obama era standards noted that consumers are saving money at the pump and have pointed out that environmental benefits such as reducing carbon emissions were a positive element for the rules. The regulation, passed in 2012, projected an average energy efficiency of 54.5 miles per gallon by 2025.

Opponents, including Trump, have criticized the rules for being unrealistic about current market conditions and adding thousands of dollars to the price of new vehicles. The Trump administration also argued that reducing the cost of vehicles would save lives, as more and more people would sell older, less safe models.

"My proposal to politically correct auto companies would lower the average price of a car to consumers by more than $ 3,000, while boosting the safety of cars," Trump said. "The engines would work better, very little impact on the environment!

Jeff Alson, a former member of the Environmental Protection Agency who had been working on the 2012 fuel economy and greenhouse gas standards, blamed Trump for not factually supporting his assertions and claims. to ignore the fuel savings at the pump for consumers.

"It's incredible," he told CNBC on Thursday. "There is no economic reason or common sense" for the claims of the administration that a rollback would save lives.

Earlier this month, Consumer Reports, a not-for-profit watchdog, also challenged Trump's cost escalation request. According to this publication, a rollback could cost US consumers $ 460 billion in fuel over the next few years and lead to lower vehicle sales.

The regulators of Trump and California have since August opposed the right of the state to establish its own standards. The administration argued that federal law deprives states of doing so.

California is allowed to set its own standards under the 1970 Clean Air Act.

GM and other major manufacturers have been reluctant to meet California standards. Instead, they have always supported a national standard to help product planning and eliminate regulatory uncertainties.

"Our goal remains to work with all parties on a solution that would involve a 50 state solution and a national electric vehicle program," GM said in a statement.

The Detroit automaker also spoke of its initiative for a "zero accident, zero emissions and zero congestion" future, including "the steady improvement in fuel consumption and our commitment to" the company. a 100% electric future ".

Ford also reiterated Thursday its support for a national standard, despite its agreement with the California deal: "We have always supported a 50-state solution to regulate fuel economy standards, and this agreement with California ensures Regulatory stability while reducing CO2 emissions with two different standards As always, we will continue to produce ever cleaner, smarter and safer vehicles. "