Say what you want about Donald Trump’s ascension to the Presidency, but it looks like Fiat Chrysler Automobiles executives may breath a sigh of relief in the coming months based on statements Wednesday from a Trump senior policy adviser.
Quoted in the Wall Street Journal, John Mashburn indicated the Trump administration will be taking a serious look at fuel economy and emissions standards to see if changes are needed.
“The Trump administration will complete a comprehensive review of all federal regulations. This includes a review of the fuel-economy and emissions standards to make sure they are not harming consumers or American workers,” Mashburn said.
“It is important to remember that this particular program was first put in place as a way to reduce our nation’s dependence on foreign oil, not for purposes of global warming regulation...Mr. Trump will be focused on bringing jobs, including auto manufacturing, back to the U.S., and making sure that government policies are in the national interest.”
FCA would have the most to gain from a fuel-economy policy change, if it happens, as the company is currently in the midst of phasing out most of its automobile line to focus strictly on truck and SUV brands such as Ram and Jeep. While profitable, these vehicles are less fuel-efficient and pollute more than smaller cars, which is certainly a troubling aspect for the automaker under current regulations.
Should the Trump administration choose to lower fuel economy standards, it would allow FCA engineers to forgo work on expensive modifications that add up to small government-appeasing fuel gains. For example, on the automaker’s next-generation Jeep Wrangler due in 2017, company engineers added aluminum to the vehicle’s hood, doors, and possibly some driveline components to reduce weight and add fuel economy. FCA also has a Jeep Truck and Wagoneer/Grand Wagoneer due out in the coming years. While it is doubtful any policy change would impact launch of these vehicles, it remains to be seen what – if any – adjustments company engineers would make following a reduction in fuel-economy requirements.
FCA did not have a specific comment on how this potential policy change would impact the company, but did issue this statement:
"FCA US looks forward to working with President-elect Donald J. Trump and the new Congress to strengthen American manufacturing and build a more secure future for our employees, customers and society. Since June 2009, we have announced $8.4 billion in U.S.-based investments and have added almost 25,000 new U.S. jobs."
While Corporate Average Fuel Economy standards have been around for more than 40 years, automakers have really been put under stress the past five years thanks to government calls to make every light vehicle sold in the U.S. achieve at least a 54.5 mpg rating by 2025. Many argue these newer standards add thousands to the price of a new vehicle as companies try to recoup their added design costs through vehicle pricing.
The Environmental Protection Agency, for its part, has signaled an unwillingness to budge from current standards, and cited a recent report indicating most car companies beating emissions standards for the 2015 model year – with many getting record mileage.
