Will New Fed Fuel Rules Harm Ford?
Your days of buying and driving a gas hog may soon be over. The government wants to squeeze you behind the wheel of a smaller car, one that eats less gas and emits fewer emissions.
I’m just now going over the information being issued by the feds regarding the new nationwide federal fuel and emissions rules and am beginning to wonder if this is just one more stumbling block for the auto industry. Ford, which has managed to escape the fate of General Motors and Chrysler thus far, has another challenge facing it: government mandated fuel and emissions standards which will kick in four years earlier than planned, in 2016.
New Fuel and Emissions Standards
Just seven years away, the proposal raises fuel efficiency targets to 35.5 miles per gallon for new passenger vehicles and light trucks by 2016 while bringing uniformity to the complex and varied state emissions policies currently in place.
President Obama hailed the new guidelines as an important step to help the country break its addiction on foreign oil while reducing greenhouse gas emissions. Some scientists believe that greenhouse gas emissions contributes to global warming which may negatively impact life on earth.
The president says that the new fuel standards will help the country save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years which represents more oil than all of the oil imported from several countries combined including Nigeria and Saudi Arabia.
Change Won’t Come Cheaply
The changes coming forward will not come without a cost, adding as much as $1300 to the price of a new car. Those costs will be passed on from the automaker to the consumer, suggesting that we’ll see sticker price like we haven’t seen it in years.
Some analysts believe that the best way for automakers to achieve higher fuel numbers is to build and sell smaller cars and a lot of them. However, automakers like Ford — who is already committed to building several new, but smaller models — may also be able to reach the higher numbers in other ways including expanding its hybrid offerings, selling electric vehicles, offering diesels and relying on EcoBoost technology.
The fed move would require that cars average 39 mpg and light duy pickup trucks 30 mpg under the proposed rule. In addition, the tailpipe emissions standard of 250 grams per mile would be a drop from the current 380 grams per mile.
At the press conference, the president was flanked by auto industry leaders, Gov. Arnold Schwarzenegger of California and Governors Deval Patrick (Massachussetts) and Jennifer M. Granholm (Michigan). As of this writing, the Ford Motor Company had not issued its own statement regarding the proposal but was expected to support the president.
Source: The Washington Post
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