Heads of GM, Ford, Fiat Chrysler and others tell president that fuel standards need to remain coordinated across U. S.
WASHINGTON — Automakers met Friday with President Donald Trump at the White House to impress on him the need for a single national fuel standard as his administration’s move to roll back mile-per-gallon rules on U. S. cars and trucks stokes fears California and other states might try to impose their own regulations.
“Fundamentally, that’s the issue,” Fiat Chrysler Chairman and CEO Sergio Marchionne told the Free Press following the meeting, underscoring how disruptive a series of different state rules could be for the auto industry.
Marchionne, whom Trump called his “favorite” auto executive at the outset of the meeting because of FCA’s decision to move some production from Mexico to Michigan, declined to discuss details of the meeting. But Marchionne said he agreed that the standards for model years 2025 and beyond, which were agreed to in 2011 under then-President Barack Obama, had become unrealistic because of a marketplace shift to sport-utility vehicles and trucks.
Chrysler’s move:
He called those rules “a boat anchor around your neck that says you’re going to have to do this regardless of your ability to recover costs from the marketplace.”
Environmental groups, meanwhile, have sharply criticized the decision to roll back the fuel standards — the particulars of which are still being worked out. This week, the National Resources Defense Council, League of Conservation Voters and others sent a letter to automakers in advance of Friday’s meeting, calling the current rules “a win-win” and saying they are encouraging innovation, saving money and improving health.
“These standards are working exactly as they were designed to do,” the letter said.
In attendance at the meeting besides Marchionne were General Motors Chairman and CEO Mary Barra and Ford President and CEO Jim Hackett, as well as officials from Toyota North America, Nissan, Mercedes-Benz, BMW, Honda, Hyundai and Volkswagen. Representatives of two industry groups — the Alliance of Auto Manufacturers and Global Automakers — also attended the meeting.
Transportation Secretary Elaine Chao, Environmental Protection Agency head Scott Pruitt, U. S. Trade Representative Robert Lighthizer and Larry Kudlow, director of the National Economic Council, were also on hand.
“We discussed with the president one national standard. We had a really good discussion,” said Hackett. “We want one national standard with California included, and the president’s done a lot of work to get this solved.”
The heads of the two trade groups put out a statement saying the administration “will soon issue a range of proposals for future fuel economy and… we look forward to reviewing (it).” They also said they “appreciate the president’s openness to a discussion with California on an expedited basis.”
After Pruitt announced in early April that the EPA would roll back the Obama-era fuel standards, automakers have been trying to make clear that they are committed to increasing fuel efficiency even without those tougher standards in place. This week, Barra put out a statement saying GM has an “absolute and unwavering” commitment to improving fuel economy, reducing emissions and investing in electric vehicle technology.
In the meantime, however, California and 17 other states have gone to court in an attempt to force the Trump administration to reconsider rolling back the 2022-25 standards, which would require the U. S. fleet of cars and light trucks to meet an average of about 50 miles per gallon by the end of that period. The standards were initially put into place after negotiations between the Obama administration, auto companies and California, but called for a “mid-term review” to determine if the rules were still appropriate.
Marchionne, the only one of the Detroit three automakers who was involved in those talks seven years ago, said Trump “is trying to be helpful. He’s trying to help the auto industry.” But he added that there is also a question as to whether the auto industry has become “mature enough to do the right thing anyway without regulations” of some kind.
“We’re also confronting a generational difference in the customer base, which says in order for you to sell me a car, you have to show me these attributes (that are environmentally aware)…. That’s what the president is contending with.”
As to how to settle the issue with California, Marchionne said, “That’s an issue that the president has to deal with…. I’m a metal worker, I just make cars.”
As the meeting got underway, Trump told reporters, “We’re working on (fuel) standards, environmental controls. We’re working on how to build more cars in the United States. We have a great capacity for building. We’re importing a lot of cars, and we want a lot of those cars to be made in the United States.”
Trump also singled out Marchionne — an Italian citizen — as his “favorite” for a decision to invest $1 billion in Warren and move production of Ram Heavy Duty trucks from Mexico to Michigan.
“That’s what we like. In fact, right now, he’s my favorite man in the room,” Trump said.
“No, big announcement. And I’ll tell you, the people in Michigan very much appreciate it. It’s a big deal. Leaving Mexico; going to Michigan.”
Trump in 2016 became the first Republican presidential nominee to win Michigan since George H. W. Bush in 1988.
Before reporters were sent out of the room, Trump was also asked about ongoing negotiations with Canada and Mexico regarding the North American Free Trade Agreement — which is significant to automakers with supply chains that cross both borders. A key deadline looms Thursday if Trump is to change the treaty this year.
Trump has long argued that the trade deal has resulted in jobs and production moving out of the U. S. and he wants to bring it back, though that, in turn, could hurt the bottom line for automakers.
