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Trump, Easing Emissions Rule, Vows to Expand Auto Jobs Trump, Easing Emissions Rule, Vows to Expand Auto Jobs
(about 4 hours later)
YPSILANTI, Mich. — President Trump on Wednesday halted an effort to tighten the nation’s fuel-economy standards, declaring that the move was just a first step in a campaign to expand American auto manufacturing jobs. YPSILANTI, Mich. — President Trump came to the heart of the auto industry on Wednesday with a manifesto for American manufacturing: to remove the shackles of regulation and restore an age of industrial glory.
Mr. Trump, appearing before hundreds of auto executives and workers at a former assembly plant near Detroit, said his administration would reopen a crucial review of federal mileage rules as part of a broader emphasis on reducing corporate regulations. Granting the automakers their top wish, Mr. Trump halted an initiative by the Obama administration to impose stringent fuel-economy standards by 2025 — rules meant to cut carbon emissions and meet international commitments to address climate change.
“We are going to work on the CAFE standards so we can make cars in America again,” the president said, referring to rules related to corporate average fuel economy that President Barack Obama’s administration put in place in its final days. Instead, Mr. Trump vowed to keep cutting regulations as a means to accelerate economic growth and add new jobs.
Mr. Trump’s remarks came after a meeting with executives of the Detroit automakers — General Motors, Ford Motor and Fiat Chrysler — and with Michigan workers and elected officials. “The assault on the American auto industry is over,” he declared.
The move to reopen the government’s review of the standards will allow automakers to argue for less stringent — and less costly — mileage standards than the target of 54.5 miles per gallon set in 2012 by President Barack Obama.
But the Trump administration is expecting things from the automakers in return for its pro-industry stance: new American jobs, and less investment in foreign operations.
And while Mr. Trump vowed to improve business conditions at home, he pledged again to stop the flow of automotive investment and jobs to Mexico under the North American Free Trade Agreement, which he termed “a total disaster.”
“We want to be the car capital of the world again,” the president said. “And we will be.”“We want to be the car capital of the world again,” the president said. “And we will be.”
Speaking in front of a sign that said “Buy American — Hire American,” Mr. Trump said he expected that stripping away regulations would spur the more automotive production in the United States. The announcement on pollution standards was delivered before hundreds of auto executives and workers in a former assembly plant near Detroit. It drew sharp criticism from environmental groups contending that laxer regulations would increase global warming and hurt consumers.
And he pledged again to stop the flow of automotive investment and jobs to Mexico under the North American Free Trade Agreement, which he termed “a total disaster.” But Mr. Trump had little to say about climate change or fuel prices on Wednesday, preferring to focus on his evolving economic doctrine, which he termed “the American model” for stimulating growth and business expansion.
“The assault on the American auto industry is over,” he said. “Under this system, we will reduce burdens on our companies and on our businesses,” Mr. Trump said. “But, in exchange, companies must hire and grow in America.”
While he praised recent announcements by G.M., Ford and Fiat Chrysler that they would add more jobs in the United States, Mr. Trump said he expected much more hiring in the future. His policies will get their initial test with an auto industry that was was brought to its knees by the recession eight years ago and required an $80 billion taxpayer bailout, including the government-sponsored bankruptcies of General Motors and Chrysler.
“I told them that’s peanuts,” he said, referring to his meeting with the Detroit auto execs. “They’re going to be building new plants and expanding plants.” But now the industry is coming off two straight years of record sales in the United States, and automakers are flush with profits.
Mr. Trump’s decision to reopen the government’s review of long-term fuel-economy standards gives automakers an opportunity to argue for less stringent rules for new cars and trucks. The rules issued by the Obama administration called for a national standard of 54.5 miles per gallon by 2025 across the automakers’ fleets. By acceding to the automakers’ plea for regulatory relief, Mr. Trump is challenging them to funnel more resources into their American manufacturing operations.
Industry officials were effusive on Wednesday in their praise for Mr. Trump’s move. One auto industry analyst said the decision to reopen fuel-economy negotiations appears to have been brokered during meetings between the president and the chief executives of the three big American automakers — G.M., Ford Motor and Fiat Chrysler — shortly after he took office.
“The Trump administration has created an opportunity for decision-makers to reach a thoughtful and coordinated outcome predicated on the best and most current data,” said Mitch Bainwol, president of the Auto Alliance trade group, which represents 18 car companies, including General Motors, Ford and Fiat Chrysler. “We believe an ‘art of the deal’ may have been struck trading jobs for regulatory relief,” the analyst, Brian Johnson of Barclays, wrote in a letter to investors on Wednesday.
Some automakers, including G.M. and Ford, have already pledged to add or retain thousands of American jobs in response to Mr. Trump’s criticisms of their investments in Mexican plants that export vehicles to the United States. Detroit auto executives have been tight-lipped about their give-and-take with the White House. All three companies have, however, already made promises to add or retain thousands of American jobs in response to Mr. Trump’s previous criticisms of their investments in Mexico.
But the potential rollback of the fuel-economy rules will not necessarily translate into a significant number of new jobs. And just hours before Mr. Trump’s speech on Wednesday, G.M. said it would create 220 additional jobs in a Michigan transmission plant and retain 680 workers who were facing layoffs at another factory.
The United States market has enjoyed record sales of new vehicles in the past two years, but industry analysts expect volume to level off, making automakers wary of adding production capacity. Without mentioning the president’s decision on fuel standards, G.M.’s chief executive, Mary T. Barra, said the new and preserved jobs underscored the “overall positive outlook for the auto industry and the U.S. economy.”
The financial collapse of the industry in the last recession is still a fresh and painful memory for most automakers, particularly G.M. and Chrysler — now Fiat Chrysler — which needed federal bailouts and government-sponsored bankruptcies to survive. Mr. Trump called G.M.’s move “just the beginning” of a new era of job growth in the industry. “That’s peanuts,” he said. “We’re going to have a lot more. They’re going to be building new plants, expanding their plants.”
Adding production capacity in a flat market for new vehicles could upset the industry’s steady recovery and jeopardize the large profits earned in recent years by G.M., Ford and other companies. But automakers may be hard-pressed to meet Mr. Trump’s expectations.
G.M. was the first auto company to react on Wednesday to Mr. Trump’s renewed push for more manufacturing jobs. The financial collapse of the industry during the recession is still a fresh memory, and companies have streamlined their manufacturing operations to eliminate costly excess capacity.
Without mentioning the decision on fuel standards, G.M. said it would add or retain about 900 jobs at three Michigan plants over the coming year. Adding new plants in a market at its peak could upset the industry’s steady recovery and jeopardize the big profits earned in recent years on larger vehicles like pickups and sport utility vehicles.
The company’s chief executive, Mary T. Barra, said in a statement that the G.M. move underscored an “overall positive outlook for the auto industry and the U.S. economy.” Automakers are also spending heavily on new technology for autonomous vehicles, yet they are not near the point of building plants to produce self-driving models.
Auto executives also hope that Mr. Trump will support investments in new technology for autonomous vehicles as a way of creating jobs in the United States. And despite the blooming partnership between the industry and the Trump administration, there are lingering worries among automakers about the potential for a border tax on imports from Mexico and elsewhere.
Even with the blossoming partnership between automakers and the Trump administration, industry executives remain worried about the potential for a border tax on imports from Mexico and elsewhere. A tax on imported models could raise prices on several vehicles in high demand by American consumers, including pickup trucks made in Mexico by G.M. and Fiat Chrysler.
A tax on imported vehicles could raise prices on several models in high demand by American consumers, including pickup trucks made in Mexico by G.M. and Fiat Chrysler. But Mr. Trump has an unlikely ally in Detroit for a tax on Mexican imports: the United Automobile Workers union, which supports his plan to renegotiate Nafta.
Mr. Trump has an unlikely Detroit ally, however, in his push for such a tax: the United Automobile Workers union. The union’s president, Dennis Williams, has praised Mr. Trump for his position on Mexican trade. “We’ve been hollering about this for 20 years and he is the first president who has brought this up,” Mr. Williams said last month in a meeting with reporters. He was less supportive of Mr. Trump’s move to cut back on fuel-economy rules, noting that consumers benefit directly from improved mileage on new cars and trucks.
The union’s leadership backed Hillary Clinton, the Democratic nominee, in last year’s presidential election, but at least one-third of U.A.W. members voted for Mr. Trump. Despite reopening the review of the fuel standards, Mr. Trump notably did not initiate any action to revoke the waivers of states, in particular California, to set their own emissions rules. That leaves California with the ability, for now, to impose stricter standards than whatever is ultimately decided by federal regulators.
And while the union’s president, Dennis Williams, has criticized Mr. Trump’s policies on issues such as immigration, Mr. Williams has endorsed the new administration’s plan to renegotiate the North American Free Trade Agreement. The fuel-economy rules, aimed at cutting heat-trapping carbon dioxide, were a pillar of President Obama’s climate change legacy. They would have required automakers to nearly double the average fuel economy of new cars and trucks to 54.5 miles per gallon by 2025, forcing automakers to speed development of highly fuel-efficient vehicles, including hybrid and electric cars.
In a meeting with reporters last month, Mr. Williams said the union was gratified that Mr. Trump wanted to reverse the tide of manufacturing investments by automakers in Mexico. Workers there earn a fraction of the $29 an hour that veteran U.A.W. members receive in American plants operated by the Detroit auto companies. In the final days of the Obama administration, the Environmental Protection Agency affirmed the standards, despite the automakers’ appeals for further review.
“I’m going to give him kudos for it,” Mr. Williams said. “We’ve been hollering about this for 20 years, and he is the first president who has brought this up.” The review of the fuel rules will now stretch into 2018, and environmental groups are preparing for a fierce debate on the need for strict standards to combat climate change.
Mr. Williams was less supportive of Mr. Trump’s desire to reduce regulations on fuel economy, noting the benefit to consumers of better mileage on new vehicles.
“I think it would be a great mistake for the companies to walk way from the fundamental principles about CAFE,” he said.
The review of the fuel rules will stretch into 2018, and it is already drawing heated opposition from environmental groups.
“The future of the U.S. auto industry is at stake, and Mr. Trump is being shortsighted,” said Dan Becker, director of the Safe Climate Campaign.“The future of the U.S. auto industry is at stake, and Mr. Trump is being shortsighted,” said Dan Becker, director of the Safe Climate Campaign.
Mr. Becker and other environmental advocates say that auto companies have the technology to meet the 2025 standards and that any increase in vehicle prices to accommodate fuel-saving equipment would be more than offset by the savings consumers get at the gas pump. Mr. Becker and other environmental activists argue that the auto companies have the technology necessary to meet the 2025 standards set by the Obama administration. Moreover, they contend that any increase in sticker prices from fuel-saving equipment would be more than offset by savings consumers get at the gas pump.
“The E.P.A. determined that the benefits of clean-car standards far outweigh the costs — to the tune of $98 billion in savings after figuring in the cost of gas-saving technology,” Mr. Becker said.
Michael Brune, executive director of the Sierra Club, indicated that environmental groups would challenge the legality of any effort to reduce the 2025 fuel-economy target and levels of carbon emissions agreed to five years ago by automakers in the last round of CAFE negotiations with the government.
“Donald’s Trump’s executive order is reckless and puts the health and safety of American families in jeopardy,” Mr. Brune said in a statement on Wednesday. “As we fight back against any efforts to scrap these lifesaving emissions reductions, we will be on strong legal footing.”