Insurance News

Safety could suffer if we boost mileage by making cars smaller

Posted on: May 26, 2009

The Obama administration’s sweeping fuel-economy and emissions initiative announced Tuesday reopens a fierce debate over tradeoffs between fuel economy and auto safety.
The government says no tradeoff exists, because nothing in the new rules would force automakers to sell more small cars, which are more dangerous in crashes than larger ones. But some safety experts think otherwise.

“The deadlines are so tight that downsizing will be a tempting compliance strategy” for automakers, says John Graham, the former rulemaking chief in the Office of Management and Budget.

The plan requires automakers to sell cars that average 35.5 miles-per-gallon by 2016, a little more and a lot sooner than current law. It has been heralded as a brilliant solution to the nettlesome mix of problems related to fuel consumption and greenhouse-gas emissions.

The move is also an example of the clout environmentalists have with the Obama administration and comes as automakers’ dire financial straits are forcing safety to a back burner. It raises the risk that cash-strapped automakers will take the fastest and cheapest route to building more fuel-efficient vehicles: Make them smaller and lighter. Further, as General Motors and Chrysler rely on federal bailout money for survival, they are ill-positioned — and disinclined — to fight proposals that some say may not be just dangerously costly, but simply dangerous.

The National Academy of Sciences, Insurance Institute for Highway Safety, Congressional Budget Office and National Highway Traffic Safety Administration have separately concluded in multiple studies dating back about 20 years that fuel-economy standards force automakers to build more small cars, which has led to thousands more deaths in crashes annually. Even though the standards were updated in recent years to reduce the incentive for automakers to sell more small cars by allowing different fuel-economy targets for different vehicles, the fastest way to make cars more fuel-efficient is to make them smaller.

Some safety experts worry that the administration’s green focus could reverse progress made in reducing the highway death toll. The fatality rate in car crashes reached its lowest ever in 2007 and is projected to drop even lower for 2008 — to 1.28 deaths per 100 million miles traveled.

President Obama this month withdrew the name of his nominee to lead the National Highway Traffic Safety Administration, longtime safety advocate Charles “Chuck” Hurley, after an outcry from environmentalists over Hurley’s statements linking fuel-economy rules to highway deaths.

The environment vs. safety

Detroit’s embrace of SUVs and pickups instead of smaller cars is well-documented.

But while U.S. automakers might not have made many of the most popular small and midsize cars, they did build and sell millions because they needed to keep their car and light-truck fleet fuel-economy averages over the number prescribed by law. The tilt toward smaller vehicles, which were often heavily discounted to sell, boosted the death toll, the studies say.

The Obama administration maintains the new fuel standards can be met without forcing more small cars into the market.

“Because every (size) category has to get more efficient, if the soccer mom wants to buy her minivan, it will be a more fuel-efficient minivan. If someone wants to buy a big SUV, it will be a more fuel-efficient SUV,” said Carol Browner, director of the White House Office of Energy and Climate Change.

She said companies can use advanced technologies to improve fuel efficiency without dramatically changing their fleets.

Former NHTSA chief Jeffrey Runge, now an auto-safety and biodefense consultant, applauds the administration’s decision to factor safety into its fuel-economy plan but worries automakers will still “do what is cheap and quick because the timelines are very short,” and that could lead to more small cars.

Adrian Lund, president of the Insurance Institute for Highway Safety, has been one of the most outspoken opponents of the move — by automakers, regulators and consumers — into small cars.

When the rules are finalized, if they “leave the automakers the option of downsizing, clearly we’re going to have some safety consequences,” Lund says. “Smaller vehicles do not protect their occupants as well as large ones.”

A concern for automakers is that if buyers return to their historical preference for bigger vehicles, manufacturers might end up behind the mileage and emissions curve and in danger of missing the mandated goal. That could force car companies to push smaller cars into the market.

“When regulations establish requirements on what people buy, not what we make, if people aren’t buying those, we have to offer incentives,” says Sue Cischke, Ford Motor’s vice president for environment and safety. “We can’t force people to buy what they don’t want to buy.”

Jim Lentz, president of Toyota’s U.S. sales unit, says he doesn’t think that all drivers will be forced into smaller cars but notes that in order to sell the bigger, thirstier ones, he will have to sell more Priuses or other gas-savers. If the gas-savers don’t sell, there is the “possibility” that there could be shortages of larger vehicles, he says.

Light cars could be safe but would cost more

Environmentalists say they are concerned about safety, too, but say automakers don’t need to make cars smaller to meet higher fuel-economy or emissions standards; they just need to use lighter-weight materials and better designs. But that requires an investment that many believe is unreasonable in this economy.

“There are composite materials that are both light and strong, but they cost more. There are drivetrains that use less fuel, but they cost more,” Runge says. “The Treasury Department is getting a crash course in how difficult it is to make money and comply in a very complex industry.”

Some say the issue is not the cost of becoming more environmentally friendly, but the price automakers will pay if they don’t.

“The companies and the Obama administration know that the only way they can survive is if they are making more cleaner, high-mileage cars,” says David Doniger, climate policy director at the Natural Resources Defense Council.

David McCurdy, CEO of the industry trade group the Alliance of Automobile Manufacturers, says the industry is already working on “low-carbon fuels, advancements in battery technology and consumer incentives to get more advanced-technology autos on our roads.”

“We will need to use every engineer we have and every investment dollar available to make our vision of sustainable mobility a reality,” McCurdy says. “And, we are going to need Americans to buy our clean, fuel-efficient autos in large numbers in order to meet this climate-change commitment.”

Though it’ll be expensive, Ford’s Cischke says, a lighter car can be made as safe as a heavier car.

Even before the new regulation, Ford Motor was planning on “taking between 250 and 750 pounds from (each of) our vehicles. That’s a huge challenge,” she says.

“It’s all about managing the energy, protecting the crash cage,” she says. “There are ways you can design a vehicle to be very strong, to provide the same crash safety as a heavier one.”

Car companies have changed their outlook

The auto industry has only recently muted its longtime criticism of mileage standards.

In comments to the National Highway Traffic Safety Administration last June, GM vigorously protested higher fuel-economy standards, saying they would be too costly and would force it to adopt technologies that impair performance and reliability. But in December, when it submitted its restructuring plan to Congress, GM said it erred by not moving more quickly on such vehicles.

“This is an example of how companies, in order to appease (environmental) demands and get federal money, are now apologizing for their past defense of consumer interests,” says Sam Kazman, general counsel of the free-market Competitive Enterprise Institute. “Last spring, these new fuel-economy technologies would be bad for consumers; now it says it’s sorry for not forcing them on consumers.”

Says GM spokesman Kerry Christopher: “It’s a new direction that marks a reinvented GM that is building new, cleaner vehicles and advanced technologies.”

Either way, the events of the last several months have led to an unprecedented relationship between the federal government in Washington and the U.S. auto industry. On one side of town, auto industry officials traipse into the Treasury Department to ask for billions in aid. On another, government officials hammer out new federal safety and environmental rules that will cost automakers billions.

Many see a disconnect here — a possible conflict of interest, even — and some also believe safety and environmental rulemaking should be put on hold until the economy improves and automakers can stand on their own.

Others say some issues, like tougher car-crash ratings and fuel-economy standards, are too important to delay.

“The bailout monies for GM and Chrysler make the federal government a virtual investor in these companies,” says Graham, now dean of Indiana University’s School of Public and Environmental Affairs. When the government “becomes both a regulator and an investor, it creates a potential conflict of interest. There could be a regulation that improves air quality and improves safety, but maybe the federal government doesn’t want to pay for it.”

Safety has already taken a back seat to the economy. Some of the top safety officials at GM, Chrysler and Ford are gone, and research and development money, often tied to sales, is way down. And NHTSA officials are factoring in the precarious condition of the auto industry as they consider rules. A rule requiring that car roofs be able to withstand more force in a crash was completed by last August, but Bush administration officials did not release it because of cost concerns, particularly in light of the relatively few lives it is projected to save. The rule, required by Congress, was released last month.

Much-tougher tests for the star ratings for safety, which are now featured on all new car window stickers, were also delayed by a year, in part so automakers wouldn’t have to undergo costly redesigns as sales plummeted. The new tests will mean cars that once scored five stars will get lower scores. Automakers will be able to time their redesigns to coincide with a more stringent side-impact rule that takes effect in 2012.

The major automakers are “working as hard as we can to make each dollar count as much as possible — especially with limited resources,” says Wade Newton, spokesman for the Alliance of Automobile Manufacturers. “We’ll try our best to make $10 billion go as far as $15 billion — not always easy, but a necessity in this economic climate.”

Contributing: Jason Paul, Chris Woodyard

Copyright 2008 USA TODAY, a division of Gannett Co. Inc.

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