Secretary of Transportation Brock Adams yesterday announced a rapid acceleration of federal fuel economy standards for the autonomic industry in model years 1981 through 1984.
Discounting warnings from the Big Four Detroit car manufacturers that sharp increases in such standards could depress sales and lead to reductions in employment throughout the economy, Adams said an average fuel economy of 22 miles per gallon will be required for 1981 models.
He said the average manufacturer's fleet fuel economy must increase to 24 miles per gallon in 1982, 26 mpg in 1983 and 27 mpg in 1984.
Moreover, Adams ordered his department's National Highway Traffic Safety Administration to review even more stringent standards for car manufacturers in 1985 and beyond, and perhaps for the 1984 models.
He claimed the new rules would mean only small changes in the price of cars. Some of the fuel-saving measures he envisions would lead to an $80 drop in 1981-model prices, and even in 1984 prices should rise by no more than $50, he said.
However, auto industry leaders have warned that the billions of dollars required to build new production facilities for smaller cars will inevitably lead to higher consumer prices.
Congress previously set standards of 18, 19 and 20 mpg for the model years 1978, 1979 and 1980, and also established a longer-range goal of 27.5 mpg by 1985 models.
"These standards insure that the American public will have available in the next decade cars that have good fuel economy, improved safety and low emissions," Adams said yesterday. "Cars built in the early 1980s to meet these standards should save the new car owner about $1,000 over the life of the vehicle compared with those being manufactured today."
The decision yesterday was required by the Motor Vehicle Information and Cost Savings Act. Average fuel economy figures are computed on the basis of average comsumption of all passengers automobiles in a company's line for a particular model year.
To determine minimum standards, Adams was required to cosider technological feasibility, the effect of other automobile standards on fuel economy and the need to conserve energy.
"The standards are readily achievable with presently known technology, and the prospect of further fuel economy improvements through additional weight reduction and alternatvie engines supports the need for considering higher fuel economy requirements for 1985 and beyond," Adams said.
If the Department of Transportation decides on any increase beyond the 27.5 mpg standard already set by Congress, it could be vetoed by Congress.
While American auto manufacturers have agreed that reaching the 27.5 mpg standard in 1985 and any interim increases are technologically feasible, they have warned the government that moving too fast could jeopardize the entire economy.
Between 1974 and 1977 model years according to Environmental Protection Agency estimates, the average fuel economy of new cars increased 34 per cent - from 13.9 miles per gallon to 18.6 miles per gallon.
According to Henry L. Duncombe Jr., chief economist for General Motors, the steps necessary to meet rapidly increasing high average fuel economy standards could make new cars less attractive to consumers. Many may thus decide to keep their older, less energy-efficient cars, perhaps resulting in higher total fuel consumption. There are 100 million cars on the nation's highways.
"Those of us in the industry have learned the costly lesson to never underestimate the independence of American consumers. They will exercise their options to buy the cars they want and to buy or not to buy whenever and for whatever reasons they choose - regardless of how much the government may regulate or of how much the manufacturers and dealers merchandise and advertise," Duncombe told Adams at hearing earlier this year.
Both General Motors Corp. and Ford Motor Co., respectively the largest and second largest auto manufacturers, had urged Adams to increase fuel economy standards more gradually in the early years of the 1980s. They said reduced auto sales that could develop from higher standards would mean losses of jobs not only in the auto industry but in other sectors of the economy directly connected with production and distribution of automobiles.
American Motors Corp., smallest of the car makers, urged Adams to innovate in setting fuel economy standards so that each manufacturer could plan on its own.
AMC suggested that Adams permit each manufacturer to work with the government on developing its own schedule for meeting the existing 1985 standards of 27.5 mpg. Alternatively, AMC proposed a two-step increase in the fuel economy standards - one in the early 1980s to be followed by the 1985 requirement.
But Adams said yesterday that since the technology exists to meet higher standards that is what his department will require.
Adams said manufacturers have any methods available to reach the increased standard, including cutting the size of new cars without reducing interior space, a program already undertaken by GM; a 10 per cent reduction in acceleration capability; and the use of more lightweight materials, such as aluminum, plastics and high strength steel.
Other areas of fuel economy design, he said, may include improved automatic transmissions that would produce a 10 per cent fuel savings for the estimated 85 per cent of all cars produced in this country which are equipped with automatic transmissions, and better manual transmissions for the balance of annual production.