no surprise here that the big 3 would complain using its 20 year old arguments

February 19, 2003

BY JUSTIN HYDE
REUTERS

U.S. automakers, led by General Motors Corp., have fired back at a federal proposal to raise fuel-economy standards for trucks by 1.5 miles per gallon, claiming regulators overestimated the companies' ability to meet higher targets and that the costs of tougher rules outweigh the benefits.

In a 127-page filing with the National Highway Traffic Safety Administration, GM suggested Friday that meeting the rules would cost it more than $1 billion, and could force it to cut weight from its trucks, a move GM has long argued would make them less safe.

"We believe that a more accurate assessment of our capabilities will show that the proposed standards are significantly too high," GM said in its comments.

In December, NHTSA proposed increasing fuel-economy standards for pickups, vans and sport-utility vehicles from 20.7 miles per gallon to 22.2 m.p.g. in model year 2007. The standard would first rise to 21 m.p.g. in model year 2005, then to 21.6 in 2006. NHTSA chief Dr. Jeffrey Runge has said he would support even higher increases beyond 2007 to reduce dependence on imported oil, calling it an issue of national security.

The fuel-economy proposal has garnered nearly 20,000 comments since December, many of them in support of higher standards. Toyota Motor Corp. and Honda Motor Co. Ltd. told NHTSA they favor the increase, while environmental groups have said the increases are not sufficient.

In its own analysis of automakers' confidential data, NHTSA found that GM's truck fleet would fail to meet the new standards by as much as 3 m.p.g., while Ford Motor Co. and DaimlerChrysler AG would meet or be just below the standard.

But GM contends NHTSA's analysis is riddled with flaws, double-counting some improvements, skipping others and ignoring time and engineering constraints. In one case, GM said, it doesn't even have a working version of a technology that NHTSA said it could use to improve fuel efficiency on several models in 2005.

"To develop such a design and apply it across the fleet would take many engineers and years of dedicated effort. Yet this is the change that NHTSA deemed the 'easiest to introduce by model year 2005,' " GM said.

GM also said NHTSA's estimate that GM's costs for meeting the rules would total about $678 million was far short. While GM did not give a specific estimate, tables in its comments suggest GM's costs would be at least $400 million more than NHTSA's estimates.

And while GM was touting its plans to offer up to 1 million fuel-efficient gasoline-electric hybrid vehicles within several years, it warned NHTSA not to rely on hybrids for higher overall fuel economy. "These programs are forecast to be a substantial economic burden, with costs far larger than any possible recovery through pricing," GM said.

The industry's lobby, Alliance of Automobile Manufacturers, said, "NHTSA's projections of cost-effective fuel economy technologies are economically infeasible."

Other Detroit automakers did not follow GM's hard line, but still offered some complaints about the proposal.

Ford called the levels "technically challenging," and warned NHTSA's cost estimates were low, but said it is committed to meeting the standards.

DaimlerChrysler offered the briefest comments, but suggested NHTSA lower its proposal to 20.9 m.p.g. for 2005, 21.1 m.p.g. for 2006 and 21.5 in 2007. It also said its costs for meeting NHTSA's current proposals would be four times higher than NHTSA's estimate of $11 million.