The Politics of Fuel Economy

With Congress getting ready to head off for an unearned break, it looks like a compromise on fuel economy regs is near. Sure, all the car companies will have to build a fleet of vehicles that collectively gets 35 miles per gallon by 2020. But big suvs and trucks will still be treated separately. Details are scant. So it’s tough to say what the new regulations will force carmakers to do.

But let me just say that CAFÉ, or Corporate Average Fuel Economy regulations, become less relevant when oil gets close to $100 a barrel like it has been recently. Even if oil and gasoline prices eventually comes back down to levels more that American consumers are more accustomed to (which is possible if you look at the long up-and-down history of fuel prices) carmakers simply have to have a model lineup that is prepared for days like this. So getting a company’s fleet average to 35 mpg or higher before 2020 may not just be mandated, it’s good business.

On a related note, the big car companies have started pandering to the Democrats while they have been lobbying for a lenient CAFÉ deal. Toyota does, too. Related? Yeah, I’d say so. The Detroit Three, who customarily have supported the Republicans, have tilted their campaign donations more toward the Democrats, according to a report in the Detroit Free Press, which cited the Center for Responsive Politics. It’s probably more than just CAFÉ, though. Detroit has gotten the bum’s rush from the Bush Administration during both terms. There has been no help on healthcare or trade and currency issues and the mix of high fuel prices and a weak economy have kept Detroit’s turnaround efforts in the mire. Maybe they want a change of pace. But the Motown executive suites haven’t swung completely blue. Individually, plenty of executives give to the Republicans. GM Chairman Rick Wagoner has given to Mitt Romney and Chrysler manufacturing boss Frank Ewasyshyn gave to John McCain. So they’re still buttering both sides.

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