In 2009, then-President Barack Obama entered into a historic bailout agreement with the U.S. auto manufacturers pursuant to which the auto companies agreed to comply with emission standards regulated by the Environmental Protection Agency and National Highway Traffic Safety Administration. Under this agreement, the EPA set emission and fuel efficiency standards for two phases: 2012 to 2016 and 2017 to 2025. As a result of these Corporate Average Fuel Economy standards, vehicles have reached a record high average fuel efficiency, preventing roughly 130 million tons of carbon pollution. In addition, consumers have saved over $31 billion in fuel costs; and since 2009, 700,000 jobs have been added to the auto industry. In fact, over 1,200 facilities working on fuel-efficient technology exist in the United States today.
But last November, just two days after President Trump was elected, the Alliance of Automobile Manufacturers — which represents 12 major automakers, including domestic makers such as Michigan’s General Motors, Ford and Chrysler — wrote a letter to Trump’s transition team offering “policy recommendations” to rollback fuel economy standards. Clearly wasting no time, the automakers launched their campaign to work with the Trump administration to undo many of the gains U.S. auto consumers and the environment enjoyed under the CAFE standards. In furtherance of this campaign, in February 2017, the Auto Alliance wrote a letter to EPA director Scott Pruitt asking him to initiate a new review of the CAFE standards, with the hope that President Trump would repeal them. The Alliance argued that the EPA moved too quickly in deciding whether the standards set for 2022 to 2025 are feasible.
In March, Trump showed a willingness to comply with the automakers’ demands. The President agreed to postpone a decision on whether to enact previously scheduled increases to fuel efficiency standards. Furthermore, the administration recently delayed increasing penalties for automakers that fail to meet fuel efficiency standards.
While the auto industry acknowledges that “manufacturers are capable of developing and producing products that meet the standards” for 2022 to 2025, they suggest that the slight increases in costs due to meeting the standards would price consumers out of the market. However, from 2008 to 2016 fuel efficiency standards were increased by 10 miles per gallon, and the automakers not only met those requirements but enjoyed record sales in the process. And to cast further doubt on the automakers’ concerns, the Brookings Institute reported that, “other important economies (Canada, the EU, and China) have emission and fuel economy standards equal to if not more stringent than the U.S. requirements.” As the U.S. lags far behind countries around the world in vehicle fuel economy, with nations such as France intending to ban gasoline and diesel-powered vehicles by 2040, the Alliance’s claims appear quite frivolous.
Reports have shown that rolling back fuel economy standards would actually cost consumers significant amounts of money. For instance, the EPA estimated that the increased standards would save $56 billion in reduced fuel costs for purchasers of automobiles made in model years 2022 to 2025, even after increases in sticker price due to the cars’ improved technology.
While all of the members of the Auto Alliance share the blame for this most recent campaign to roll back fuel efficiency standards, the role which Ford Motor Company has played is particularly sad for millennials. Ford markets itself as being eco-friendly, a cause which is near and dear to the hearts of a majority of millennials who will be the next generation of car buyers. Specifically, Ford has stated that it “recognizes the risks and opportunities climate change poses and (is) committed to doing (its) share to prevent or reduce the potential for environmental, economic and social harm due to climate change.” And in March, when President Trump spoke to auto companies in Michigan, Curt Magleby, the vice president of Ford’s government relations, stated, “Ford is deeply committed to improving fuel efficiency.” Thus, in utter hypocrisy, Ford advocates for climate-friendly policies in the public eye, while lobbying for corporate interest behind closed doors.
Growing up in Southeast Michigan, Ford has always been close to my heart. Ford is a principal driver of the Michigan economy, and it seems as though most Michigan residents have either someone in their family who works at Ford or who knows someone who works at Ford. Furthermore, many intelligent, innovative University of Michigan engineering students will find themselves working for Ford after graduation. We, at the University of Michigan, need to make Ford aware that the next generation of automobile buyers is more concerned with what Ford actually does to improve fuel efficiency, rather than what it says in a feel good marketing campaign. According to Consumers Union survey, nearly 9 in 10 Americans want automakers to raise fuel efficiency standards, giving us cleaner, more fuel efficient cars. Automakers have long been on the cutting edge of technology and innovation to help lead our economy.
By asking the Trump administration to roll back emission standards, automakers are neglecting their historic role and failing to invest in the innovation America wants and desperately needs.
Carolyn Ayaub is a rising senior in the Ford School of Public Policy.