Michigans Levin Prepares Mileage Measure

by : Anthony Fontanelle

Sens. Carl Levin and Kit Bond recently announced their compromise bill to current fuel economy legislation in an attempt to ease the mileage burden for automakers. Earlier, the automakers reluctantly backed said compromise proposal in place of the onerous Senate bill.

Levin's proposal would counter a current Senate energy bill mandating automakers to achieve a fleet-wide average of 35 miles per gallon for their cars and trucks by 2020, with four percent annual increases the next decade after. That legislation, which has wide support, would etch the first momentous raise in mileage rules in more than two decades.

The compromise bill, if approved into law, would give automakers more time to meet higher mileage targets and allow reduced standards for pickup trucks and SUVs. Levin, a Michigan Democrat, and Bond, a Missouri Republican, are both auto industry allies.

Levin's compromise proposal would require automakers to achieve 36 mpg for passenger cars by 2022 and 30 mpg for light trucks by 2025. Under the current federal mileage mandate dubbed as the corporate average fuel economy or CAFE, automakers must achieve 27.5 mpg for passenger cars and 22.2 mpg for light trucks.

The Alliance of Automobile Manufacturers, the group that represents Detroit automakers and the Toyota Motor Corp. of Japan, among others, said that it would reluctantly support Levin's proposal, calling it "tough" but "not as wildly extreme" as the current Senate bill, which would require automakers to achieve a fleet-wide 52 mpg by 2030.

The support etches a major budge for automakers. In the previous months, they have aggressively lobbied against significant increases in federal mileage rules, anxious about the huge sum necessary to comply with the mandate. Detroit's Big Three fear the thump to their balance sheets as they continue to bleed in their hub North American operations. The could not keep the finances unharmed.

Automakers are ceding now as an increasing number of lawmakers lack sympathy for their predicament. One person familiar with the industry's strategy said the consistent resistance to CAFE increases has "hurt us." "I would really say to those who want to fight this because they think it is too strong and because Detroit objects to it: 'The handwriting has been on the wall for a long time and Detroit has not come in and made a suggestion'," said Sen. Dianne Feinstein, D-Calif., referring to the current Senate bill.

Sen. Ken Salazar, D. Colo., endorsed the current Senate bill Wednesday after having been on the fence. Underscoring the waning sympathy for automakers on Capitol Hill, Levin's amendment differs considerably from a draft document he and his allies shopped around earlier this month. Levin's proposal directs the National Highway Traffic Safety Administration (NHTSA) to set mileage targets "at or above" the numbers outlined in the proposal. The proposal said regulators cannot exercise any so-called "off-ramps" to lower standards. The current Senate bill contains off-ramps, though automakers said that they have no teeth.

The current Senate bill's fleet-wide mileage target of 35 mpg was the main sticking point for auto makers, said people familiar with the matter. "Combining cars and trucks was the biggest challenge for everyone," said an auto critic. "Automakers still find the amendment's numbers aggressive but preferable to the current Senate bill, which executives believed would be too costly. Levin's goals are something the industry collectively believes it can do with a lot of hard work, but it's not going to kill us."

"We think [this] is the ticket... the bipartisan approach, which we believe can and should capture a majority of the U.S. Senate," Levin said. "It will be a close call, a close vote."