Big 3 Agree to New Mpg Rules

WASHINGTON - President Barack Obama will unveil the 2017-25 fuel economy standards Friday, doubling current fleetwide requirements to 54.5 mpg, but giving Detroit's Big Three leeway to keep building profitable SUVs and pickup trucks.

After weeks of talks with automakers, the Obama administration softened its proposal from its initial 56.2 mpg by 2025, agreeing to only require 3.5 percent annual increases in light trucks through 2021. But the government will require 5 percent annual increases for passenger cars during the same period — a potentially tough demand on foreign companies whose product lines are car-based, reported The Detroit News.

Detroit's Big Three and at least four other major automakers were haggling over final details Wednesday, but planned to sign formal agreements by Friday afternoon's event.

Obama will be joined by senior U.S. auto executives, as well as representatives of the United Auto Workers union and some foreign automakers at the Convention Center.

The Detroit News learned Wednesday that Toyota Motor Corp., initially uncertain, decided to support the proposal. Toyota's U.S. sales president, Jim Lentz, is expected to attend Friday.

So are General Motors Co. CEO Daniel Akerson, Ford Motor Co. President and CEO Alan Mulally and UAW President Bob King.

The White House said the deal "will result in significant cost savings for consumers at the pump, dramatically reduce oil consumption, cut pollution and create jobs."

The formal proposal will be unveiled by Sept. 30 and the final rule by the end of July 2012.

Mazda Motor Corp. told administration officials Tuesday night that it will not endorse a deal to hike fuel efficiency standards to 54.5 mpg by 2025 and Volkswagen AG and Daimler AG aren't expected to support the proposal either: They believe it gives unfair benefits to full-size pickup trucks — a staple of the U.S. automakers' lineup — and lays the big increases on passenger cars.

Dan Becker, director of the Washington-based environmental lobby group Safe Climate Campaign, praised the proposal but said it could have been stronger. He said the new standards are a major boost "in the fight against oil addiction and global warming, but it was severely weakened by auto industry lobbying."

At least seven automakers are expected to agree by Friday to hiking the fleet fuel efficiency standards to 54.5 mpg by 2025, but talks are ongoing over several remaining issues. The seven are GM, Ford, Chrysler Group LLC, Honda Motor Co., Hyundai Motor Co., Nissan Motor Co. and Toyota. In order to win the backing of the domestic automakers, the White House agreed to a review midway through the period, to ensure the new requirements are achievable, as well as granting credits that will make it easier for the companies to meet the revised standards.

The automakers pushed to get factors such as the rules' impact on jobs and auto sales included in the midterm assessment. If the EPA and NHTSA determine that the final rules are too tough, California would be allowed to continue with higher requirements. And automakers will be able to seek a "judicial review."

The Association of Global Automakers, representing major foreign automakers, said the new standards "are challenging" but said it was pleased with the deal's safeguards, which it said will give its members "enough lead-time to design and build the type of advanced technology vehicles needed, while continuing to meet consumer needs with a full range of vehicle choices."