Obama's New MPG Rules -- GM Is For Them, Except When It's Not
General Motors (GM), which has long led the fight against tough fuel economy standards through its lobbyists at the Alliance of Automobile Manufacturers, is now a "new company" looking for a middle ground -- not jumping in and cheerleading for the Obama administration's proposed 56.2 mpg goal for 2025, but at least embracing a process it once scorned.
GM's North American president, Mark Reuss, has been cautiously optimistic about the ongoing process several times recently. The Associated Press paraphrased him as saying that the 56.2 mpg goal is "tough" but workable. New technologies make it possible and, he said, "What was very expensive in the past is no longer very expensive."
The bankruptcy still looms
Word on the street is that GM's new congeniality is payback to Obama for the $50 billion bankruptcy bailout, and that certainly makes a compelling narrative: The snarling predator reduced to lap dog with a nice bowl of food. GM denies it, of course, but there's little doubt the company is walking a path with more twists and turns than the Snakes and Ladders board.
The final standards won't be released until September, and a lot of jockeying will take place before then. It's becoming increasingly likely, though, that Obama will get his 56.2 mpg standard, with the real fight over the details, especially how many loopholes will remain in the final deal.
Dan Becker, the safe climate campaigner at the Center for Auto Safety, thinks that GM should be in payback mode.
The company owes its existence to our $50 billion. The least GM can do is not try and block the rules that will save us money at the gas pump, protect our health and environment, and cut oil addiction.The coalition splits up
There is growing evidence that the Big Three, once a united front opposing fuel economy increases, is starting to splinter on this issue. In a change of pace, Ford has been more openly hostile to tougher fuel economy standards (particularly the idea of separate mandates imposed by California) than GM. In the Big Three, Chrysler probably has the swing vote. But we're talking about nuances here, because on the surface their positions don't seem all that far apart.
The public positioning is key, because GM officials have been saying one thing and the company's behind-the-scenes lobbyists another. Greg Martin, GM's Washington spokesman, told me that Reuss wasn't talking about any specific target, just endorsing the process of automakers working out a deal with the government. Martin points out that GM has gone through "a change of leadership," and
The notion that we fight against fuel economy increases of any size is not where we're at today. Reuss was saying, "Listen, we know fuel economy increases are coming and we're ready to do what we need to do to meet them."Meanwhile, GM is still very much part of the Auto Alliance, which continues to loudly proclaim that 56.2 mpg is an unworkable "electric car mandate" that will force people to buy vehicles they don't want.
Hard of hearing
People are hearing what they want to hear, and that's led to some charges and counter-charges.
Roland Hwang, the clean car campaigner at the Natural Resources Defense Council, says that GM has "broken from the automaker pack" and now supports 56.2 mpg. GM's Martin disagrees. He told me:
I'm not surprised that Roland would wish to think that, but it's not the case. It's wishful thinking to apply Reuss' comments to a specific number, like 56.2 mpg.And Hwang came back with:
The news media specifically framed Reuss' comments as reacting to 56.2 mpg, so Martin is not being fully transparent here. What we have is the difference between what the executives and the lobbyists are saying. The lobbyists are holding to a tough line. I think Reuss was being honest, and moving beyond the company's lobbying position to what the company can actually achieve. Yes, it's challenging but achievable.Gloria Bergquist, a spokeswoman for the Auto Alliance, told me that GM would "clarify" Reuss' comments, and the company has now done that -- to me, at least.
Becker thinks that Chrysler is also being less combative towards tougher fuel economy standards, which could have something to do with the company's new Italian owner, Fiat. Europe has tougher fuel economy standards than the U.S., and automakers there are adjusting.
Toyota and Hyundai: whatever you guys want
The other companies sticking their necks out on 56.2 mpg are Toyota and, interestingly enough, Hyundai, which has taken over the role once played by Honda -- agreeing that technology makes possible a great leap forward on fuel economy.
Hyundai has long proclaimed a 50 mpg fleet average by 2025 as a corporate goal and its CEO, John Krafcik, says that "50 is do-able with a lot of hard work." It's not a huge leap from 50 mpg to 56.2 mpg.
And Toyota is the most accommodating of all. Jim Colon, a company vice president, said at the Washington Auto Show that "Toyota will be prepared to meet" whatever goal the administration sets. That includes the outer limit of what Obama is considering, 62 mpg (a six percent annual increase). "If it's 62 miles a gallon, we'll be able to achieve that," Colon said.
It's refreshing to hear such candor from an automaker. Detroit, too, can and will meet the standards that are thrown at them, but the Big Three are still going to jockey for loopholes and leeway. That's the way it's done.
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Photo: GM