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Trump's Ties to Carmakers Get Testy Over Obama Mileage Rules

Trump's Ties to Carmakers Get Testy Over Obama Mileage Rules

Thursday, 22 August 2019 05:17 PM

Tensions between Donald Trump and major automakers erupted this week over the president’s plan to gut Obama-era fuel efficiency standards, the latest flareup in the administration’s testy relationship with the industry.

In a series of tweets Wednesday, Trump blasted “politically correct” executives for refusing to back the administration’s August 2018 plan that called for capping efficiency requirements after 2020 and revoking California’s authority to regulate vehicle greenhouse gas emissions to combat climate change.

The fuel-efficiency spat is just the latest dust-up in Trump’s up-and-down relationship with big automobile companies over some of the president’s signature policy decisions, from immigration to trade, and his push to roll-back regulations on business. It also highlights how some automakers are growing more comfortable being at odds with Trump even at the risk of drawing an attack in front of his 63 million Twitter followers.

Automakers have refused to endorse the Trump administration’s fuel economy plan, put forth last year by the Environmental Protection Agency and the National Highway Traffic Safety Administration. The companies for months have urged the administration to broker a deal with California, fearing a lengthy legal battle over the state’s regulatory powers would throw the critical standards into uncertainty for years.

Last month, four automakers including Ford Motor Co. (F) snubbed Trump by announcing a compromise on fuel-efficiency targets offered by California regulators. Those voluntary standards fall between the Obama-era requirements in place today and Trump’s plan to cap requirements after 2020.

The founders of General Motors Co. (GM) and Ford would be “rolling over” due to the “weakness of current car company executives,” Trump said in one tweet that incorrectly identified longtime GM chairman and chief executive Alfred P. Sloan as the company’s founder, rather than William C. Durant.

Trump singled out Ford on Wednesday by saying company founder “Henry Ford would be very disappointed if he saw his modern-day descendants wanting to build a much more expensive car, that is far less safe and doesn’t work as well, because execs don’t want to fight California regulators,” Trump said.

Ford responded by defending its agreement with California and saying the company is “proud to lead the way in taking the right actions for the environment while at the same time protecting consumer affordability and the short- and long-term health of the industry.”

The emissions pact with California -- to which Honda Motor Co. (HMC), BMW AG and Volkswagen AG also agreed -- “provides regulatory stability while reducing CO2 more than complying with two different standards. As always, we will continue to produce ever cleaner, smarter and safer vehicles,” Ford said in a statement.

California is the biggest U.S. market for automobiles and because of its history of smog has pioneered emissions controls that several other states follow.

Carmakers should know, Trump said on Twitter, “that when this Administration’s alternative is no longer available, California will squeeze them to a point of business ruin.”

The companies also want to avoid a split market -- with federal mileage requirements in most states and more stringent rules in more than a dozen states that adhere to California’s standards. The states that follow California account for more than a third of all U.S. auto sales.

The final outcome of Trump’s plan likely won’t be decided for some time. The White House began a review needed to finalize the plan earlier this month, which will take at least several weeks to complete.

The Alliance of Automobile Manufacturers, a major industry group representing a dozen carmakers including GM, Ford and Toyota Motor Co (TOY)., said it supports “increases to standards that optimize all the priorities, including affordability so more Americans can buy a new car, plus preserving jobs and safety at the same time,” spokeswoman Gloria Bergquist said in a statement.

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Tensions between Donald Trump and major automakers erupted this week over the president's plan to gut Obama-era fuel efficiency standards, the latest flareup in the administration's testy relationship with the industry.
trump, carmakers, mileage, fuel
Thursday, 22 August 2019 05:17 PM
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