The Transportation Department, responding to pleas from Ford Motor Co. and General Motors Corp., Monday eased federal fuel economy standards for the 1989 and 1990 model years to 26.5 miles per gallon.
The controversial decision, certain to raise the ire of environmentalists, is intended to "enhance U.S. global competitiveness and protect jobs in the automotive sector of the U.S. economy," the department said.The 1989 and 1990 standards would have been 27.5 miles per gallon under a 1975 law that created corporate average fuel economy program, or CAFE, to reduce fuel consumption and ease pollution.
Under the program, automakers have had to meet progressively tougher fuel economy averages each year for their car fleets or face stiff fines.
But the 1975 law grants the Transportation Department the authority to lower the standards in a given year if it finds that automakers have made a good faith effort to reach the standard or if raising the standard would hurt the country economically.
The department has used that provision to set the standard at 26 miles per gallon since 1986 so, in fact, the 1989 and 1990 averages, while lower than what they would have been under the law, will be one half mile per gallon higher.
GM and Ford testified at a September hearing that with the drop in oil prices, consumers are demanding larger, less fuel-efficient cars, and that raising the fuel economy standard would allow Japanese automakers to take over the profitable, U.S. big-car market.
Japanese automakers do not have to worry about meeting the higher fuel average for their fleets since they have produced large numbers of small, higher-mileage cars that offset low-mileage cars in calculating the average, Ford and GM said.
GM said it probably would have to shut down a Texas plant that makes its bigger models and employs 4,000 people if the standard were raised to 27.5 miles per gallon in 1989.
Sen. Tim Wirth, D-Colo., who testified against lowering the standards at the September hearing, called the department's decision "short-sighted."
One-third of gases attacking the earth's ozone layer and contributing to the so-called greenhouse effect come from automobiles, Wirth said.
"It takes the United States a step backwards in beginning to address major environmental problems facing our globe," he said.