The Department of Commerce has joined the nation's two biggest car companies in an attempt to reduce federal fuel economy standards for 1986 and beyond, according to comments on file at the National Highway Traffic Safety Administration.
Commerce officials urged NHTSA Administrator Diane K. Steed April 30 to roll back the current 27.5-mph rule to help avoid "economically damaging consequences" for General Motors Corp. and Ford Motor Co.
Those "consequences" include the possible annual production loss of 1 million cars and the elimination of up to 110,000 auto industry jobs -- all of which could occur if GM and Ford carried out their threats to cut big-car production to meet fuel economy standards, the Commerce Department said.
"Recent major changes in the U.S. automobile industry's operating environment," particularly Japan's decision last month allowing its auto makers to ship 24 percent more cars to this country, are also reasons for lowering the standards, Commerce said.
"The department believes that the present standard of 27.5 miles per gallon no longer represents the 'maximum feasible' level attainable by the industry. Consequently, we believe NHTSA should issue a proposed rule to reduce the model year 1986 standard below 27.5 miles per gallon," the comments said.
The comments were submitted by Stuart S. Keitz, director of Commerce's Office of Automotive Industry Affairs, and Richard H. Shay, acting general counsel of the department. They were sent to NHTSA as part of the agency's current rule-making procedure on fuel economy standards.
The remarks are the strongest to date from Reagan administration officials showing support for reduced federal fuel economy standards. However, spokesmen for NHTSA Administrator Steed said yesterday that she stands by her statements that her agency has reached no conclusions in the matter and will consider all sides before taking final action.
Steed reiterated that position Tuesday in comments before the Senate subcommittee on energy regulation and conservation.
At issue are petitions by GM and Ford to reduce the 27.5 mpg corporate average fuel economy (CAFE) standard to 26 mpg. GM wants the standard lowered indefinitely, beginning with cars manufactured for the 1986-model year. Ford is seeking a reduction to 26 mpg for model years 1986 through 1989.
The standard was set by the Energy Policy and Conservation Act, an amendment to the Motor Vehicle Information and Cost Savings Act, which was implemented in 1978. The statute seeks to limit motor fuel consumption by requiring all auto makers selling cars in the United States to meet average "maximum feasible" fuel economy levels for their new-car fleets.
GM is operating at 2.4 mpg below the current standard and Ford is running at 1.6 mpg under compliance. Both companies could face hundreds of millions of dollars in fines and other penalties if the standard isn't reduced to help them comply with the law.
Both GM and Ford contend that they are being unfairly penalized because they are "full-line" car manufacturers -- meaning that they sell a wide range of vehicles with various weights and sizes, which makes it difficult to meet federal fleet economy standards.
However, Chrysler Corp. officials, who vigorously opposse any relaxation of CAFE regulations, contend that GM and Ford simply are trying to maintain market advantage by violating the law.
Chrysler officials voiced those concerns this week in Senate subcommittee hearings and in a letter Tuesday to Commerce Secretary Malcolm Baldrige.
"In its April 30 comments to NHTSA concerning the General Motors Corporation and Ford Motor Company proposals to roll back the CAFE standards, Commerce took a position contrary to its previous statements on the crucial issue of energy conservation," Robert A. Perkins, Chrysler's Washingon office vice president, wrote to Baldrige.