Invitation to Gas Guzzlers
Fresh from their triumph in persuading a compliant Reagan Administration to weaken the fuel economy standards set for 1986 model cars, General Motors and Ford have embarked on a vigorous new campaign aimed at getting more, more, more. What they specifically want is a similar relaxation in the fuel standards for the cars they will turn out between 1987 and 1989. If that isn’t granted them, the Big Two threaten darkly, they will probably have to shut down some of their plants, throwing tens of thousands of workers out of jobs, depressing entire regions, sending ripple effects throughout the economy in an earthquake of retribution.
Yes, we’ve heard it all before. We heard it when the auto companies swore they couldn’t possibly reduce their engine pollutants enough to meet federal clean-air requirements, although when the government stood firm behind those standards the companies backed away from their threat of suicide and did what had to be done. And we heard it when the fuel standards that required progressive mileage improvements were first mandated in the aftermath of the 1973 oil embargo. An impossibility, moaned the auto manufacturers. And yet, up until this year anyway, the standards were somehow met.
The problem now, plead GM and Ford, is the public. Auto buyers have gone back to their old ways, buying bigger domestic model cars that guzzle a lot of fuel while turning their noses up at the better-mileage smaller cars that the Big Two offer. This lopsided exercise of choice works to reduce the average mileage of an auto company’s total output. The law’s remedy for failure to meet mileage standards is a fine of $5 for each one-tenth of a mile that the requirement is missed, multiplied by the number of cars the company sold over the year. If applied, those fines could cost GM and Ford hundreds of millions of dollars in 1986. But the fines won’t be applied. Instead the Reagan Administration has agreed that the average fuel-economy standard for new models can be 26 miles per gallon, instead of the 27.5 that was supposed to have taken effect.
It’s a sad situation, and it has left GM and Ford crying all the way to the bank, where they have been socking away the record earnings they’ve made from selling so many higher-profit big cars. Chrysler has been shedding tears as well, but for a different reason. Chrysler is grieving because it has been caught red-handed doing the right thing. Unlike GM and Ford, Chrysler made the investment in retooling that allowed it to meet the federal mileage standards. Now, as Chrysler correctly notes, it is being punished for obeying the law. If Chrysler was able to do so, why couldn’t GM and Ford?
Allowing the sale of 4 million or 5 million 1986 model cars that fail to meet the mandated fuel standards means that tens of millions of additional barrels of oil are going to be consumed over the lifetime of those cars. That’s imported oil we’re talking about, which has to be paid for in dollars, which contributes that much more to the nation’s trade deficit. And now GM and Ford are asking for assurance that they’ll be able to go on evading their responsibilities until at least the end of the decade, and threatening horrendous consequences if their demand isn’t met.
Does anyone seriously believe that these companies will shut down their most profitable plants and sacrifice billions in profits if they don’t get their way? If the Reagan Administration insists that GM and Ford meet the fuel economy standards for future years, it’s a good bet that the standards will be met. Achieving those standards could in fact be the easy part. The harder part is likely to come in preventing the Administration from once again rolling over.
