GM and Ford chiefs speak out against fuel economy drive

Executives from General Motors and Ford have spoken out against moves to increase fuel economy standards.

GM North America's chairman Robert Lutz said forcing carmakers to build smaller, more fuel-efficient vehicles when fuel is relatively cheap and there is no public demand for such moves is going about the issue the wrong way.

Speaking at the Chicago Auto Show, Mr Lutz suggested the only way Americans were going to demand more fuel-efficient vehicles was if the price of petrol (gasoline) rose dramatically from just over $1 (€1.15) a gallon to $3 (€3.46) or $4 (€4.61) - in line with European prices.

Ford's chief operating officer Nick Scheele has also criticised the policy of Corporate Average Fuel Economy, saying: "CAFE is an appalling piece of legislation. Hundreds of thousands of jobs are contingent on this, and I find that distressing."

CAFE is a 27-year old standard which requires a carmaker's passenger cars to attain an average of 27.5 miles per gallon; while light trucks - including minivans, four-wheel-drives and pick-ups - must reach 20.7 miles a gallon.

American carmakers don't have to meet the standard for every vehicle, but the entire fleet in each category must reach the average.

But Jason Mark, transportation analyst for the Union of Concerned Scientists, suggests the flurry of anti-CAFE rhetoric is aimed at derailing legislation in the Congressional pipeline.

"The industry recognises after 15 years of inaction, Congress is getting serious about consumers saving fuel, and that boosting fuel economy is the best way," Mr Mark says.

One piece of legislation being considered is a proposal by Senate Democrats to increase CAFE by 56% to 36mpg by the 2014 model year.

Meanwhile, George W Bush's administration is considering the idea of eliminating CAFE in favour of standards based on weight, encouraging more fuel-efficient technologies or tradeable fuel economy credits.