General Motors Corp. and Ford Motor Co. have difficulty swallowing CAFE. They would like to dilute it.
CAFE is corporate average fuel economy. It is the federal standard setting maximum average fuel-economy ratings for new-car fleets sold in the United States.
Today's CAFE is 27.5 miles per gallon. GM is 2.4 mpg below and Ford is 1.6 mpg under that level. They say they can't reach 27.5 mpg anytime soon. The two companies want a CAFE of 26 mpg, beginning with cars made for the 1986-model year.
Many people, particularly those at Chrysler Corp., think that is a bad idea. Reducing fuel-economy standards will increase America's energy dependence, and weakening rules in general will encourage corporate disrespect for federal law, the critics say.
The law is the 1975 Energy Policy and Conservation Act, an amendment to the Motor Vehicle Information and Cost Savings Act. The statute was enacted in response to Middle East oil embargoes and a proliferation of big-engined U.S. cars that helped cause domestic energy crises in the 1970s.
Then, there were two schools of thought on saving motor fuel: Put higher taxes on gasoline and drive down consumption, or make the people who make the cars make them more fuel-efficient.
Congress chose to focus on the auto makers, telling them to run their cars on less fuel and establishing penalties for those who failed.
The basic penalty works like this: Companies that don't meet the CAFE standard can be assessed $5 for each tenth of a mile per gallon they fall below it. That fine is multiplied by each car, sold and unsold, in an auto maker's new-car fleet, regardless of whether an individual model's fuel-consumption level meets the standard.
Most U.S. auto makers complied with early CAFE mandates. Some companies exceeded the rules. Those that did better than required built up credits, which could be used to avoid paying some, or all, penalties for failing to meet CAFE levels at a future date.
But GM and Ford now say that they are running out of credits. They are considering using carryback credits -- those awarded based on the CAFE levels auto makers expect to reach in future model years.
The problem is that the car companies and the government haven't been very good at predicting the future:
* They said in 1975 that gasoline pump prices would be between $2.00 and $2.50 a gallon in 1985. They guessed wrong. The average gasoline price today is about $1.15 a gallon.
* They said Americans would go crazy over super-fuel-efficient diesel cars. A lot of people who bought those cars went crazy -- but not with joy. There were starting and other mechanical problems. Diesel prices rose, and today diesel engines account for about 1 percent of the U.S. auto market, instead of the 15 to 20 percent share predicted earlier.
GM and Ford have good small cars. But the big money at those companies comes from sales of mid-size, big and luxury models still in hot demand. Those big bucks and big cars, however, translate into chronically low CAFE ratings.
Among the Big Three domestic car companies, Chrysler took top honors in introducing a variety of attractive, fuel-efficient small cars. Chrysler is on target in meeting current CAFE standards.
Also, despite the difficulty of selling economy in a fuel-sated market, Chrysler steadily is increasing its sales in North America, according to most recent industry figures. Chrysler's total share of the U.S. and Canada retail car and truck market in the first quarter of 1985 was 13.2 percent compared with 11.4 percent in the first quarter of 1984.
So, why is Chrysler complaining?
"We are meeting the law because we invested close to $5 billion in fuel-efficient programs, because we took the weight out of our average car from worst-in-class to best-in-class, and because we continue to invest large sums in such items as turbo-charged four-cylinder engines, which meet the demand for fuel efficiency and high performance simultaneously," said Robert S. Miller, Chrysler's executive vice president for finance and administration.
As a result, granting GM and Ford a rollback in CAFE effectively would reward them for not doing as much as Chrysler has done to meet the law, Miller said. That kind of break spells unfair competitive advantage, he asserted.
GM and Ford officials object, saying that their "big" cars today actually are about 1,200 pounds lighter than their big cars of 10 years ago. The two companies have asked the National Highway Traffic Safety Administration to weaken CAFE. The Department of Commerce and the Department of Energy have voiced support for their petitions.
But consumer groups, led by the Washington-based Center for Auto Safety, and a coalition of lawmakers, led by Sen. Thomas F. Eagleton (D-Mo.), oppose a rollback.
The 27.5-mpg standard is "technologically feasible," Eagleton said in a letter last week to Transportation Secretary Elizabeth Hanford Dole.
"The record of Chrysler Corp., the smallest of the domestic, full-line manufacturers, demonstrates that it is economically practicable," Eagleton said.