While Americans and global financial markets were focused on the debt-ceiling crisis, Detroit did a stunning U-turn on gas mileage requirements. In a revolutionary role reversal, the captains of the reconstituted Big Three stood side-by-side with President Obama last Friday to signal their agreement to the largest increase in auto gas mileage requirements since Washington began setting mileage standards nearly four decades ago.
It's clear, of course, that Detroit's new behavior is partially in response to unswerving global trends for ever-higher gasoline prices and unyielding consumer demand for less thirsty vehicles -- a lesson it learned the hard way. It's also apparent that the embrace of the new gas mileage standards by the traditional opponents of efficiency reflects support for an administration that wagered $80 billion in taxpayer bailouts to keep General Motors and Chrysler afloat -- a debt they have just repaid. Regardless, their new direction is at last on the correct course.
The new mileage standard, which now will be scheduled for public hearings, calls for auto manufacturers to achieve a corporate mileage average across all their vehicles of 54.5 miles per gallon by 2025. That's double the current corporate fleet average standard of 27 miles a gallon.
As these newer, more energy efficient models are phased in over the next 14 years, they will help consumers save significantly on annual use and costs of gasoline. That savings will more than offset higher costs for such cars. It also will stretch the nation's reserves of domestic oil and substantially reduce, by around a fifth, the nation's deficit-building purchases of imported oil, which now accounts for half of the nation's trade deficit. Cleaner, more fuel-efficient engines, as well, will sharply curtail emissions of tailpipe pollution which harms human health and exacerbates global-warming and climate change.
This is all good. But it's not just a one-way deal for Washington. It's good for Detroit's Big 3 as well. Ford, Chevrolet and Chrysler, which is now owned by Italy's Fiat, all recognize that they cannot thrive if they cannot compete with foreign auto makers, which already lead in the increasingly fierce mileage-per-gallon arena.
Still, the agreement represents compromises on all sides. Environmental advocates and the Obama administration had earlier envisioned a corporate mileage standard of 62 mpg. That goal was not too much of a stretch. BMW already mass markets in Europe a 65 mpg turbo-charged diesel in one of its popular 3-series models. Volkswagen and Mercedes-Benz offer similar high-mileage clean turbo-charged diesels, and they are all working on hybrids, as well, to keep up with Japanese auto-makers.
Toyota's class-leading gasoline-electric hybrid Prius gets better than 50 mpg in town through use of a long-life battery that is self-charged when the car's brakes are used. Plug-in electric hybrids by Nissan and all-electric models like Chevy's Volt are other competition game-changers.
With gasoline costs at $4 a gallon in much of the country and predictions for gasoline to rise past $5 a gallon and keep on rising in the not-to-distant future, Detroit's auto makers will have to do better than a 54.5-mpg corporate average by 2025 just to stay competitive. Still, the new standard, and their willing agreement to it, at least makes energy efficiency a corporate goal for American car manufacturers. That welcome milestone should spur other energy conservation initiatives in Congress.