New fuel rules may create jobs in Ohio

Critics say the higher efficiency standards will make cars too expensive.

File photos of a 2011 Chevrolet Cruze ECO. The government’s new Corporate Average Fuel Efficiency standards, known as CAFE, would require automakers to raise the minimum average fuel economy of the cars they sell in the U.S. to 54.5 miles per gallon by 2025 and reduce greenhouse gas emissions. The current standard is 27.5 miles per gallon.

Inmate escapes sheriff’s car
5/26/12
Cable worker hurt on the job
5/25/12
Beach Waterpark sued for failure to deliver
5/25/12
Lakota to discuss open enrollment proposal
5/25/12
AD resigns to take job at Kettering
5/25/12
> More headlines

By Randy Tucker , Staff Writer Updated 1:25 PM Monday, February 6, 2012

New fuel-economy standards mandated by the Obama administration last summer could create more than 23,000 jobs in Ohio over the next decade, according to a recent report from Ceres, a nonprofit group that studies “sustainability” issues.

The government’s new Corporate Average Fuel Efficiency standards, known as CAFE, would require automakers to raise the minimum average fuel economy of the cars they sell in the U.S. to 54.5 miles per gallon by 2025 and reduce greenhouse gas emissions. The current standard is 27.5 miles per gallon.

Advocates say the push to improve fuel economy will spur hiring at auto plants and suppliers of fuel-saving technologies while at the same time slashing fuel costs for businesses and consumers.

Critics, mainly auto dealers and conservative politicians, say nearly doubling the current CAFE standard will vastly increase the cost of producing new vehicles and price many customers out of the new car market, threatening jobs and the auto industry’s recovery.

Tim Doran, Ohio’s spokesman for the state and local auto dealers’ associations, was attending the organizations’ national convention last week in Las Vegas and was unavailable for comment.

The national group has repeatedly decried the new rules, which it says will add about $5,000 to the price of a new vehicle, about $1,500 more than the government’s estimates.

Ceres estimates passenger cars meeting the new CAFE standards — which are required to improve annually by about 5 percent beginning in 2017 — will save their owners an average of $4,000 over the lifetime of their vehicle, based on projected gas prices of $3.50 a gallon.

“The jobs numbers are not only jobs in the auto industry. The majority of them will actually result from consumers saving money on these standards,’’ said Carol Lee Rawn, director of transportation programs at Ceres. “Because consumers will realize so much in fuel savings, it goes into the broader economy and benefits a variety of sectors.’’

Just about every automaker is now marketing fuel-efficient models and demand for smaller and more fuel-efficient cars has redefined the industry, bringing jobs back to Ohio after a decade of shedding tens of thousands of workers.

The GM plant in Lordstown, Ohio is a prime example.

In 2010, the plant hired back all of the workers it had laid off in the previous two years and brought in dozens of workers from shuttered GM plants to help build the new compact Chevrolet Cruze. The plant is currently operating at full capacity with about 4,500 employees.

Although GM’s sales dipped by 6 percent last month compared to January 2010, the company noted that sales of small and compact cars increased 30 percent during the same period.

“Chevrolet drove our performance once again, and sales of our fuel-efficient new cars were especially good,” Don Johnson, vice president of GM’s U.S. sales operations, said in a statement.

More recently, Honda announced last week that it would add 150 workers in Ohio at plants in Anna and Russells Point to build and assemble new continuously variable transmissions that lead to higher fuel economy.

“Our customers like both performance in their vehicles and sustainability, or higher fuel economy as mandated ... and we’ve fully supported that,” said Ron Lietzke, a spokesman for Honda in Ohio.

Still, most experts agree the demand for fuel-efficient vehicles and the jobs they can create cannot be sustained unless gas prices stay consistently high and the vehicles become more affordable.

Alan Baum, of Baum and Associates, which offers automotive sales and production forecasts, said domestic gas prices have nowhere to go but up because of ever-increasing global demand, even if demand subsides in the U.S.

In addition, Baum said, automakers have already begun to experiment with less-costly technologies that will allow them to build fuel-efficient cars at price points that appeal to a broad range of consumers.

“Different companies are taking different approaches to meet the demands of different customers,’’ Baum said. “Some will want the hybrids and electrics, which are costly and a relatively small number at this point, but fuel efficiency will be satisfied first and foremost by changes to the internal combustion engine.’’

He said advances in conventional technologies such as diesel engines, turbochargers and direct fuel injection are lowering the cost of meeting efficiency standards.

Demand for fuel-efficient cars shows no sign of waning, Baum said, citing a number of recent surveys that indicate a growing number of car buyers are concerned about fuel economy.

According to a survey conducted last fall by Maritz Research, 42 percent of consumers view fuel economy as an “extremely important’’ purchase decision factor, up from 14 percent a decade ago, and 37 percent said they expect fuel economy will have the “greatest impact” on their next new vehicle purchase.

The number was even higher for the next generation of car-buyers, or the so-called millennials, aged 13 to 29. Nearly half of that group — 46 percent — said fuel economy would be “extremely important” in their new vehicle purchase decision.

“A lot of people say most car buyers don’t base their decisions on greater fuel economy, but that’s not what these surveys are saying,’’ Baum said.

Contact this reporter at (937) 225-2437 or rtucker@DaytonDaily News.com.

Share this article