America’s car companies have a long history of being on the wrong side of regulation, and when the Trump team arrived they miscalculated as they always do. This is an industry that opposed seat belts when Ralph Nader advocated for them over a half century ago in his book, Unsafe at Any Speed. They opposed using the catalytic converter to reduce air pollution, fought airbags, and have tried to stop just about every safety and environmental rule anyone has ever proposed. They oppose regulation out of ideological reflex, even though the modern high-tech car owes its birth to the same engineers the car companies had to hire to comply with government regulation. Ironically, regulation “drove” the car industry toward the 21st century computer-controlled, Bluetooth-enabled, soon to be self-driving vehicle.
People need and want to move around with freedom but have proven more than willing to pay for cleaner-running and safer cars. Unfortunately, the auto industry simply can’t be bothered decarbonizing its product. When Trump arrived, they saw a possibility of getting Obama-era ambitious gas mileage requirements relaxed. The Trump folks did as they were told and relaxed the standards. The administration and the auto industry seem to have forgotten that under the 1970 Air Pollution Control Act, California is permitted to set air quality standards more stringent than the rest of the country and that other states are permitted to follow California’s rules. California is doing just that, and car makers are now facing a national market with two sets of rules.
It turns out that the Trump Administration has proposed even more relaxed rules than the car companies wanted, and California refuses to relax its standards at all. Efforts at compromise have failed. In response to the impasse, the master political strategists of the auto industry have written a letter to the president and the Governor of California asking them to compromise on gas mileage standards. They know that without a compromise, they are facing years of litigation as California and the federal government fight over the very clear language in the Clean Air Act.
As Coral Davenport reported in the New York Times last week:
“The world’s largest automakers warned President Trump on Thursday that one of his most sweeping deregulatory efforts — his plan to weaken tailpipe pollution standards— threatens to cut their profits and produce “untenable” instability in a crucial manufacturing sector. In a letter signed by 17 companies including Ford, General Motors, Toyota and Volvo, the automakers asked Mr. Trump to go back to the negotiating table…Mr. Trump’s new rule, which is expected to be made public this summer, would all but eliminate the Obama-era auto pollution regulations, essentially freezing mileage standards at about 37 miles per gallon for cars, down from a target of 54.5 miles per gallon by 2025. The policy makes it a near certainty that California and 13 other states will sue the administration while continuing to enforce their own, stricter rules — in effect, splitting the United States auto market in two.”
The auto companies fear that this will lead to uncertainty as they won’t know if they should build cars to meet California’s standards or Trump’s. Let me make it simple for them. They should build cars to meet California’s standards. California is the future, Trump is the past. And in addition to the American market, there is a world market to think about. Anyway, there’s no penalty for exceeding national standards, and a concerted effort at technological innovation might enable car makers to build the big cars they want to sell, with the gas mileage California requires.
The auto industry should stop all the whining and build big cars that deliver great pick up along with great gas mileage. I’m going to let these political geniuses in on a secret: no one likes to pay for gasoline. The company that saves people money on gasoline while giving them enough room for their teenagers’ sports equipment will sell a lot of cars. Here’s another secret: An electric SUV, properly priced, with sufficient battery storage would take America’s suburbs by storm.
California is not going to compromise on cars. Lots of older Californians remember smog so thick you could not see the mountains surrounding Los Angeles from within L.A. They do not want to go back to those bad old days. All Californians, young and old are experiencing droughts and forest fires and don’t think that global warming is a hoax. They are committed to renewable energy for their homes and want their cars to eventually run on renewables as well.
It’s a state built around the automobile and that is not going to change soon or possibly ever. Its settlement patterns require personal transit and at best is generations away from developing towns and cities that are walkable and built around mass transit. They are stuck with cars and know it. Some of the state’s freeways are as wide as rivers. Less polluting motor vehicles are not a luxury for that huge state and they know it. As in many other aspects of American society, California is often years ahead of everyone else. The polling data about public opinion on environmental protection demonstrates that support for these policies cuts across demographic and ideological lines. California Governor Gavin Newsom, like his predecessors Jerry Brown and Arnold Schwarzenegger, understands this fact of political life. All three governors played leadership roles in climate and environmental policy because they understood how critical it was to both their state and their own political survival.
So, the auto industry is wasting their time asking California to compromise. The issue will head to the courts. Since Trump knows he has no chance to win any election in California he will use the state as a political punching bag throughout 2020. He should be warned though that California’s 40 million people punch back. Not only will they vote against him in 2020, they will go to the polls and donate money to beat him. The auto industry has inadvertently created a conflict with no middle ground. Trump and California’s elected officials will win and the auto business will lose since there will be no compromise.
Auto manufacturing is characterized by a vibrant, efficient, global supply chain. It is a terrific example of the benefits that globalization can bring to both producers and consumers. When was this industry going to figure out that the xenophobic nationalist running the country was not their friend? The Trump Administration’s tariffs, immigration policies and hostility to global trade and supply systems are a direct attack on the auto industry’s business model. The industry should have figured this out a long time ago. Their recent letter indicates that they still think there is a chance for a deal or compromise between Trump and Newsom. They are wasting their time. California can’t, shouldn’t and won’t compromise on cars. And Trump’s hostility to California and his perceived political self-interest makes compromise unlikely.
Instead of useless lobbying, the auto industry would be better off spending its money on innovative engineering. The only way to avoid marketing two types of cars in America is to figure out a way to build a big clean car. Seat belts, air bags, pollution control equipment, better gas mileage and all types of sensors have made our cars safer and cleaner. Automakers know how to innovate. They just don’t seem to enjoy it very much.