The National Highway Traffic Safety Administration, in response to General Motors Corp. and Ford Co., formally agreed yesterday to lower federal fuel economy standards for the 1986-model year.
The move is sure to anger energy conservation advocates, who long have argued that all car companies doing business in this country should be forced to adhere to strict fuel economy regulations.
At the same time, despite their favorable public response to yesterday's ruling, GM and Ford officials said privately that NHTSA's action does not go far enough. A three-year delay of implementation of the 1986 standard would have been preferred, the auto officials said.
The 1986 standard would have required all new-car fleets sold in the United States to have an average fuel economy of 27.5 miles per gallon. NHTSA's action lowers the standard to 26 mpg.
GM, the nation's largest auto maker, predicted earlier this year that it would fall 2.4 mpg below the 1986 standard, which was also in effect for the 1985-model year. Ford was running 1.6 mpg under compliance.
Both companies could have been fined $5 for each car in an auto maker's new car fleet for each tenth of a mile per gallon their new-car fleets fell below the standard.
NHTSA's decision, thus, saves GM and Ford millions of dollars in potential penalties under the 1975 Energy Policy and Conservation Act, which requires auto makers doing business in the United States to meet annual corporate average fuel economy (CAFE) standards.
But NHTSA officials contended yesterday that their primary concern in making final the decision, which had been tentatively made last July 18, was saving American jobs.
Both GM and Ford had threatened to curtail production of large cars to come into compliance with the law. Large cars generally use more fuel. The more large cars in an auto maker's new-car fleet, the lower the fleet's CAFE rating.
GM and Ford traditionally have relied on large-car sales to ring up profits. The Department of Commerce, which supports NHTSA's decision, said earlier this year that a cutback in large-car production by the nation's two leading auto makers could lead to an annual loss of 750,000 U.S.-made cars. That loss, in turn, could eliminate 110,000 U.S. auto jobs, the department said.
Based on those and other considerations -- namely, "sufficient plans" by GM and Ford to continue improving fuel economy -- "NHTSA has determined that the maximum feasible average fuel economy level for model year 1986 is 26 mpg," the agency said.
However, Chrysler Corp. officials have argued that any relaxation of the CAFE standard would be tantamount to rewarding GM and Ford for violating the law. Chrysler is the only one of the nation's three largest auto makers to meet the 27.5 mpg rule -- a goal that Chrysler Chairman Lee A. Iacocca contends was reached only after the expenditure of $4 billion to remodel Chrysler products.