Auto execs want some relief on the 54.5 mpg CAFE limit

The auto industry leaders are very open to the idea of cutting corporate taxes, as well as Trump's pledge to scale back government regulations in exchange for moving manufacturing back to the USA. Nowhere would they like to see that more than when it comes to CAFE. The outgoing Obama administration just last week locked down the controversial 2025 target of 54.5 mpg.

A study predicts that while the industry could reach that goal, it could add thousands of dollars to the average vehicle's price tag, hammering demand. Which of course is BS as more electric cars come onto the market and battery prices plunge.

While Gloria Borquist, the vice president of communications for the trade group Auto Alliance, called the EPA decision "disappointing," CAFE proponents hope to convince the new president to leave the rule stand. Fuel economy standards "are spurring investment, creating and securing American jobs, cutting pollution, and building a better quality of life for families across the nation — it is common sense to continue this momentum," argues Kim Glas, executive director of the BlueGreen Alliance.

In recent years, the Obama White House wielded both carrot and stick in dealing with the auto industry. It cracked down hard on criminal and ethical abuses: fining GM nearly $1 billion for failing to catch a deadly ignition switch problem, and negotiating nearly $20 billion in settlements covering Volkswagen's diesel emissions scandal. Six VW employees were also indicted, as were several executives at Takata, the Japanese supplier that covered up problems with fatally flawed airbags.

What the Industry Wants

But the Obama administration also set up the first-ever industry-government consortium aimed at bringing new safety technology to market faster than would be possible through the traditional rulemaking process.

Expect to see the Detroit CEOs — and their import colleagues — argue that this is the approach they'd like to see more of in the years ahead.

As a businessman, Trump liked to promote himself as a master of deal-making. It would surprise few if the Tuesday White House meeting would be the start of that process for the auto industry.

Leave a Reply