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Auto Companies Reverse Position on Fuel Efficiency

In a dramatic turnabout from their 2007 position, automakers last week described the new federal fuel efficiency rules as a challenge, but added they welcome government leadership in the creation of the new standards.

"This may come as a surprise to some, but automakers are on board and committed to reducing CO2," said Dave McCurdy, president of the Alliance of Automobile Manufacturers, in a video statement on the organization's web site. General Motors' Chief Executive Fritz Henderson also expressed optimism, saying the giant automaker is capable of meeting the new timetable, while Ford Motor Co. CEO Alan Mulally called the new rules "a crucial milestone."

The welcoming responses from automakers came as a surprise to some, especially after the same companies vehemently battled less strict standards two years ago. Back then, the U.S. Congress called for the manufacturers to reach an average fuel economy of 35 mpg by 2020. Automakers responded by saying the 35-mpg standard would force them out of business.

Those standards now seem soft, however, in the face of last week's ruling, which calls for autos to hit 39 mpg by 2016 and for light trucks to average 30 mpg.

The new rules are expected to pose huge challenges for automakers, who must ratchet up their engineering efforts in batteries, materials, diesel engines and hybrid technologies. In 2007, the Alliance of Automobile Manufacturers argued that making such changes by 2020 was not possible. "Lead time is exceptionally important to auto manufacturers because of the cost involved in redesigning an automobile and re-tooling the plants," said Charles Territo of the Alliance in a 2007 interview with Design News. "You also have to consider the time it takes to identify suppliers and make sure the vehicle meets all the safety and emission requirements."

Auto makers said last week they are particularly encouraged by the fact that under the new ruling there will now be only one set of fuel efficiency standards, instead of several conflicting state-by-state standards.

Automotive experts said last week the new goals are technologically attainable, but will pose an economic challenge. They could be derailed by spiraling costs, safety issues or gasoline prices, they said. Dr. David Cole, chairman of the Center for Automotive Research and a former professor of automotive engineering at the University of Michigan, said government estimates of $1,300 per vehicle to bring the fleets into compliance are too low. "The government is way, way off on the costs," Cole said. "Just look at the cost of hybridizing. You're looking at $3,000 to $4,000 just for that."

Cole contends automakers are complying with new demands because of their financial condition and their newfound dependence on government aid.

"In these financial times, the auto companies are not going to do anything to tick off the government," Cole said. "They've got to live first and worry about everything else later."

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