An angry American auto industry has protested for years that although its cars and trucks were being made in Detroit, they were being designed increasingly in Washington by bureaucrats.
The Reagan administration made plain yesterday that it means to stop that process in its tracks by eliminating or relaxing 34 major safety and environmental regulations affecting cars and trucks and by insisting that in the future the "benefits" of automotive regulation clearly exceed the "costs."
The embattled auto industry, eager for good news after $4.3 billion in losses last year, was highly pleased. Roger B. Smith, chairman of General Motors Corp., said the proposed changes are "a sensible step toward making regulations more cost-effective." Ford Motor Co. called the actions "very encouraging."
But a clear picture of how the costs and benefits of the administration's deregulation moves will fall on the industry, on auto workers and consumers will be hard to develop.
The regulatory changes announced yesterday would save U.S. auto producers $1.4 billion over the next five years through reductions in pollution controls on auto plants and delays and elimination of proposed new safety features on cars and trucks, according to the industry's estimates. Vice President George Bush, who announced the regulatory changes, said consumers' savings would be even greater -- as much as $9.3 billion -- through the elimination of new emission controls and safety devices.
But the vice president's prediction is true only if the companies pass on to consumers all of the savings they will enjoy from the administration's regulatory relief.
By giving the industry a one-year delay in installing automatic seat belts in full-sized 1982 model cars, the administration is "saving" the industry between $50 and $100 a car because that's what the new "passive" restraints would have cost. The administration also is proposing to permit the industry to build lighter-weight bumpers for autos rather than the kind currently required, which must withstand a 5-mile-an-hour collision. A 2 1/2-mph standard is sufficient, the National Highway Traffic Safety Administration said. According to the industry, this change could reduce vehicle costs by at least $50 a car.
Will the companies trim that much from prices of cars in 1982 and the years that follow? Transportation Secretary Drew Lewis told reporters yesterday that auto company executives have assured him that any benefits from the regulatory changes will be passed on to consumers.
But history suggests that won't happen if the companies can help it. They need to money, too. General Motors, for example, says that despite a series of price increases on its 1981-model cars, the prices aren't yet high enough to permit the company to recover all its costs. If it can, GM is likely to try to hold on to any savings from regulatory relief to help raise the $40 billion it wants to spend to modernize its plants and products by 1985. t