Mileage proposal unfair, GM exec says

A proposal to increase the U.S. fuel economy standards would force Detroit-based automakers to “hand over” the market for trucks and sport utility vehicles to Japanese manufacturers, a senior General Motors Corp. executive said.

Bob Lutz, GM’s vice chairman and the head of the company’s global product development team, said the proposed changes to the government’s so-called corporate average fuel economy standards would represent an unfair burden on the traditional Big Three automakers.

“For one thing, it puts us, the domestic manufacturers, at odds with the desires of most of our customers, namely larger vehicles,” Lutz said in a year-end posting on a website maintained by GM.

He added, “That effectively hands the truck and SUV market over to the imports, particularly the Japanese, who have earned years of accumulated credits from their fleets of formerly very small cars.”

Lutz, a longtime critic of government fuel economy regulations, compared the attempt to force carmakers to sell smaller vehicles to “fighting the nation’s obesity problem by forcing clothing manufacturers to sell garments only in small sizes.”

The Energy Security Leadership Council, a group that includes more than a dozen prominent U.S. executives and retired military officers, issued a report this month calling on Congress to take steps to reduce the reliance on imported oil.

The group called for tougher regulation, including a 4% annual increase in fuel economy standards.

Auto executives have argued that the industry’s flat overall fuel economy in recent years reflects the strong preference for trucks and SUVs by U.S. drivers, a point Lutz made in his posting.

“As long as [gasoline] is around $2 per gallon here, people will exercise their freedom to buy the vehicle they want, V8 engine and all,” Lutz said.