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White House pushes for Friday deal on fuel-economy regulations

Wed, 27 Jul 2011

The White House wants to announce as early as Friday that it has reached agreement with most automakers on a plan to raise corporate average fuel economy targets to 54.5 mpg by 2025, manufacturers' representatives said Wednesday.

While no automakers have signed on to the Obama administration plan yet, most--including Ford, Toyota, General Motors and Chrysler--are generally supportive and intend to do so, the industry officials said.

Each manufacturer is trying to iron out technical issues with the White House before endorsing the proposal.

The industry will not give across-the-board support for the administration's plan, automakers said.

Leading German automakers--Volkswagen, BMW and Daimler--may withhold endorsement of the agreement, the industry representatives said. Failure to comply with the mileage plan could result in millions of dollars in fines for each company.

Positive feedback

"We are encouraged by the strong, positive feedback we are receiving from many companies and look forward to wrapping up the discussions in the near future," an administration official said Wednesday.

Spokesmen for Volkswagen, BMW and Daimler did not immediately respond to requests for comment.

The White House plan, disclosed to automakers earlier this week, calls for 5 percent annual mpg increases for passenger cars from model years 2017-25.

Light trucks and SUVs would be required to meet 3.5 percent yearly increases from 2017-21, with the annual targets jumping to 5 percent from model years 2022-25. The heavier vehicles in this category, such as Ford's F-150, would face the most lenient standards.

Mid-course review

The White House plan also calls for a mid-course review to see if targets during the latter part of the nine-year period have to be adjusted in light of manufacturer costs, technology and sales.

The manufacturers could largely meet the requirements in the early part of this period by making changes in gasoline-powered engines without having to sharply increase sales of hybrids or electric vehicles.

The Wall Street Journal reported Wednesday that most of the large automakers have signed off on the White House proposal. This report, which cited people familiar with the talks, is premature, manufacturer representatives said.

Following the pending White House announcement, which also would involve California state regulators, the administration plans to formally propose the new targets in September and issue final approval next July.

The 2025 targets, which would roughly double the current standard, would build on the 2016 standard of 35.5 mpg.

By Neil Roland- Automotive News