Follow Ford’s lead and reject fuel standards rollback
LET’S PUT ASIDE for a moment that some of us who breathe air might want to limit the amount of toxins in our daily oxygen intake, or that the fossil fuel supply is actually finite, or even, heaven forbid, that climate change is real and we should probably do what we can to save the earth as we know it. If you’re running a major corporation that sells high-end products to market-driven consumers, do you really want to tether your business plan to the whims of an administration that rules by tweet and encourages endless conflict?
That’s something the Alliance of Automobile Manufacturers might consider after hitching a station wagon to the Trump distraction du jour: the announcement by Environmental Protection Agency administrator Scott Pruitt of a rollback of fuel emissions standards adopted during the Obama Administration.
The standards date back to 2011, when automakers agreed to a fleet-wide average fuel efficiency of 54.5 miles per gallon by 2025 (affecting 2022-2025 model-year vehicles). In its last days in January 2017, Obama’s EPA performed a Midterm Evaluation (MTE) further codifying the standards.
Directed by Trump, Pruitt said the departing Obama Administration “short-circuited the MTE process” and that the standards “didn’t comport with reality, and set the standards too high.”
In the simple-minded thinking that all regulation is inherently antibusiness, this would seem to be good news for automakers, who now could be relieved from the costly R&D of producing vehicles that pollute less. Buttressing that is a trend in recent years of consumers buying fewer fuel-efficient cars in favor of small trucks and other guzzlers, thanks to low gas prices.
The alliance — which includes among its 12 members GM, Ford, Toyota, and Volkswagen — cited that buying pattern in a statement supporting Pruitt’s action, saying, “Consumer research shows that the monthly payment is the top concern when car-shopping,” and not fuel efficiency.
But not all businesses think in such black-and-white terms. In a more nuanced response, Ford said, “We support increasing clean car standards through 2025 and are not asking for a rollback. We want one set of standards nationally, along with additional flexibility to help us provide more affordable options for our customers.”
Even if Trump’s EPA succeeds in abandoning the standards, the higher rules will still be in effect in California and 13 other states, including Massachusetts, that follow its lead. Automakers have no interest in producing one set of cars for 37 states and another for the rest, let alone the rest of the world. The rules for California, the largest single market, would prevail. Expect then a legal battle between the administration and the states, likely landing in the Supreme Court before it’s sorted out.
Even on a fast track, that could take years, certainly past this fall’s midterm elections, which could change the political complexion of Congress and begin to put a roadblock on Trump’s EPA. There are also other unforeseen forces, such as the economic effects of whatever trade war the president might tweet into existence, or less dramatic fluctuations, like the seasonal hike in gas prices after Memorial Day. If a gas-gouged public suddenly starts prioritizing fuel efficiency, manufacturers won’t get very far trying to assure them that what they really want are cheaper sticker prices and low monthly payments.
The noise from the EPA is just the latest chaos from a president who thrives on discord, calling it unpredictability that proves he’s smart and the greatest world leader history has ever known. But no sane business would base its marketing plan on such a wrongheaded notion, especially when the rest of the world is committed to abating greenhouse gases (yes, the entire rest of the world; the other holdout, Syria, joined last fall).
In recent months, corporate America has shown responsibility in many areas where the government has not, such as with so-called bathroom bills and gun control. Automakers hailing the EPA’s latest attack on the environment it’s supposed to protect might follow Ford, which is headed down the right road.