New Emissions Rules Mark Strategy Turn for Auto Industry

JIM LEHRER:

President Obama announced sweeping new standards today on gas mileage and auto emissions. He said it marked the start of a comprehensive national effort toward a clean-energy economy.

Judy Woodruff has our lead story report.

BARACK OBAMA, President of the United States: The sun is out, because good things are happening.

JUDY WOODRUFF:

An apparently revved-up president made the announcement after months of talks with the auto industry and interest groups.

BARACK OBAMA:

We have set in motion a national policy aimed at both increasing gas mileage and decreasing greenhouse gas pollution for all new trucks and cars sold in the United States of America.

JUDY WOODRUFF:

The proposed fuel efficiency standards, known as CAFE for "corporate average fuel economy," would mandate 30 percent better mileage by 2016. Cars would need to get 39 miles per gallon; trucks, 30 miles per gallon.

The president said the U.S. could save 1.8 billion barrels of oil as a result. And together, he said the mileage and emissions rules would amount to taking 177 million cars off the roads.

The emissions target is to cut carbon dioxide coming from tailpipes by one-third as of 2016. And it could mean longstanding legal battles involving carmakers, the states, and the federal government will be abandoned.

Today's changes hew closely to a proposal long advocated by California. The industry and the Bush administration resisted that effort for years.

But Gov. Arnold Schwarzenegger said much is different now.

GOV. ARNOLD SCHWARZENEGGER (R), California: The car manufacturers, you know, needed money. They need the taxpayers' money. They need the federal government to help them. So in order to get that help, I'm sure that President Obama said, "OK, we're going to give you the help, but here's what you need to do."

JUDY WOODRUFF:

The auto industry has been severely weakened by last year's sky-high gas prices and the credit crunch. Now General Motors is on government life support, and Chrysler is in bankruptcy.

Alan Mulally of Ford, one of ten domestic and foreign carmakers involved in today's announcement, said the changes will help.

ALAN MULALLY, CEO, Ford:

We're going to be best-in-class in fuel efficiency, in addition to quality and safety and that every year, year after year, we're going to improve the fuel mileage going forward and reduce the CO2.

So, of course, improve the internal combustion engines, then more hybrids, and then we've also announced that we're moving to all electric vehicles. So that's kind of the basic fundamental roadmap going forward.

JUDY WOODRUFF:

And the president himself gave an impromptu pitch for the beleaguered industry.

BARACK OBAMA:

I still have my Ford parked in Chicago, Ford hybrid, runs great. You guys should take a look. But there are also some outstanding hybrids…and energy-independent cars represented up here. So I didn't want to just advertise for one.

JUDY WOODRUFF:

The new rules do mean prices will go up $1,300 per vehicle when combined with standards approved earlier, but the president said potential gasoline savings would be more than $2,800 over the life of that new vehicle.