Detroit calls emissions proposals too strict

By Nick Bunkley
Published: January 27, 2009

DETROIT: Automakers said Monday that they were working toward President Barack Obama's goal of reducing fuel consumption, but rapid imposition of stricter emissions standards could force them to drastically cut production of larger, more profitable vehicles, adding to their financial duress.
Obama ordered the government on Monday to reconsider whether California and other states could regulate vehicle emissions to help control greenhouse gas emissions, a reversal of a position taken by the Bush administration.
The announcement came as General Motors and Chrysler are borrowing billions of dollars from the government to avoid bankruptcy, and as Toyotaprepares to report its first operating loss in 70 years. Shortly after the president spoke, General Motors said it would cut 2,000 jobs at plants in Michigan and Ohio because of slow sales.
The California regulations, if enacted today, "would basically kill the industry," said David Cole, chairman of the Center for Automotive Research, an independent research organization in Ann Arbor, Michigan "It would have a devastating effect on everybody, and not just the domestics."
But Cole said he thought major modifications to the proposed standards were likely and that action was still "a long ways off," giving the carmakers more time to overcome their financial problems and develop the technologies needed to sell a full lineup of compliant vehicles.

Right now, carmakers say they would be able to sell only their smallest, most fuel-efficient cars — models like the Toyota Prius, a hybrid whose sales have fallen sharply since gas prices began dropping last fall — because once-popular vehicles like pickup trucks made by Ford and GM are not efficient enough.
"I want clean air and clean water just like the next guy," said Erich Merkle, an independent automotive analyst in Grand Rapids, Michigan "But in the real world, there would be consumer outrage with the fact that they're limited to maybe two vehicles and there's nothing there that would meet their family's needs."
Environmental advocates who have long challenged the automakers' opposition to the proposed California standards say such regulations will help the companies produce vehicles that consumers want.
Failing to invest in reducing emissions and increasing efficiency will only prolong Detroit's problems, said David Doniger, climate policy director for the Natural Resources Defense Council.
"I think this is the pathway to their survival," Doniger said. "If carmakers are going to survive in a world of volatile oil prices and global warming, they have to be making more efficient vehicles. When the economy comes back and people start buying cars again, they're going to expect that gas prices are going to go up, and they're not going to want the gas hogs that they used to want. Consumers' tastes have changed in terms of what's cool."
One concern automakers have with states regulating tailpipe emissions is that keeping up with a hodgepodge of standards would be difficult. They expressed support Monday for the ideal of cutting emissions but want their engineers to be concerned with meeting just one set of requirements nationally.
The Alliance of Automobile Manufacturers, which represents 11 carmakers, said it favored "a nationwide program that bridges state and federal concerns and moves all stakeholders forward, and we are ready to work with the administration on developing a national approach," in a statement from the group's chief executive, Dave McCurdy.
GM, the only automaker to issue its own response Monday, said it was "working aggressively on the products and the advance technologies that match the nation's and consumers' priorities to save energy and reduce emissions." But the company also emphasized the need for "a comprehensive policy discussion that takes into account the development pace of new technologies, alternative fuels and market and economic factors."
Automakers are operating in the worst market since the early 1980s. New vehicle sales fell nearly 19 percent in 2008 and are universally expected to be even lower in 2009.
Representative John Dingell, Democrat of Michigan, who has long been one of the Detroit automakers' strongest allies in Washington, praised the president's attitude toward global warmingand expressed hope that the administration would act only after carefully studying the effect that "setting a patchwork of different emission standards" would have.
"President Obama and I both share the goal of energy independence and a cleaner environment for our children and grandchildren," Dingell said in a statement. "We have a unique opportunity in history to address the issue of global climate change and we must take bold and balanced action."
Cole, the Center for Automotive research chairman, said he believed Congress would ensure Detroit would be able to live with any new standards.