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Carmakers: CAFE will cost 82,000 U.S. auto jobs

 
5 1,140 views Jul 1, 2008
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Carmakers: CAFE will cost 82,000 U.S. auto jobs

Carmakers: CAFE will cost 82,000 U.S. auto jobs

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Carmakers have been vocal about the increase to vehicle prices new CAFE regulations will likely cause, with GM execs, including vice chairman Bob Lutz, revealing it could add up to $6,000 to the price of a new car. However, higher vehicle prices are only one negative outcome of the new regulations. A second outcome is the costs to jobs in an already struggling U.S. market. The Detroit 3, along with Toyota, Daimler and five other carmakers, are now urging federal regulators to ease the proposal to hike fuel efficiency standards by 4.5% annually through 2015.

The Alliance of Automobile Manufacturers, the trade group representing these carmakers, criticized the National Highway Traffic Safety Administration (NHTSA) proposal demanding fleet-wide average fuel economy levels of 31.6mpg for cars and trucks by 2015.

The carmakers claim the proposal would eliminate up to 82,000 auto jobs and reduce auto sales by as many as 856,000 vehicles by 2015, reports The Detroit News. It also said the net cost to society would be $28.9 billion by 2015, and the regulations would hike the cost of light trucks by an average of $4,000.

The NHTSA predicts the new regulations would cost carmakers roughly $47 billion to comply but would also create 8,000 jobs. The NHTSA is also under pressure from Congress to toughen the standard as the original proposal was made assuming fuel prices would average $2.42 a gallon through until 2016.



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Comments (5)

  1. By Stephen Posted: 7/1/2008 10:47pm PDT

    Yes, thats whats going to cause the loss for jobs! Not half a decade of failing to turn a profit!
     
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  2. By craigs Posted: 7/2/2008 6:59am PDT

    Agreed Stephen!! The auto industry in the US is like a bunch of babies. They produce junk for decades and then when it finally catches up to them they cry like babies and ask the government to bail them out. It's pathetic!
     
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  3. By mlevere1992 Posted: 7/2/2008 9:21am PDT

    The problem with the hike in CAFE standards is any project for new cars that any company has in the works now have to change to meet these regulations. That is a lot of R&D time out of the window. Now car makers have to look at redesiging all of their engines and cars for tougher fuel standards in a shorter time period.

    So for companies to meet these toughter regulations quickly, they will start dumping or cutting back on producing their lowest MPG cars, (like Ford and GM are doing already with their trucks, SUVs and mini-vans), and that will cost US workers their jobs. This will strengthen the recession that we are in. You are kidding yourslef if you don't think we are in a recession. Housing slump, the strength of the dollor is in the toilet, gas prices and oil are at all time highs, Stock market has been hit hard recently, people are cutting back on traveling to save on gas, which is hurting towns that rely on tourism, food prices are up..... Anything else, Oh yeah, Starbucks is closing 600 stores and auto plants are shutting down all over the place. Just look at last months sales figures for the auto industry and you will see what I am talking about.

    The automotive industry is getting hit hard and the consumers are going to be paying for it in the long run. If they can't sell new cars, their profits go down and there is less money for R&D. They will survive, (Maybe not Chrylser) but we will all have to suffer some lean years in the auto industry.

    Just like back in the '70s, we will be all driving econoboxes and there won't be a ton of fun cars to drive for a while. We might be seeing 250hp corvettes again.
     
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  4. By archony Posted: 7/2/2008 9:24am PDT

    What is good about the price of gas going up is that market forces are pushing the automakers to increase fuel economy whether the government tells them to or not. So few people will buy gas guzzlers that automakers will have to improve mileage or disappear.
     
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  5. By tsgak Posted: 7/2/2008 2:28pm PDT

    Car sales are plummeting and people in the auto industry are losing their jobs right now -- long before cafe standards become mandatory. This may be forced upon an unwilling industry, but it wil likely be the bitter medicine that they need to thrive again.
     
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