New letup on auto economy heralds bigger models, use of more gas

As US Transportation Secretary James Burnley rolled back the government's corporate average fuel economy standard earlier this month, he referred to it as ``a dinosaur which ought to be extinct.'' While fuel economy in the auto industry may not be dead, it is clearly taking a back seat to luxury and performance for now. Those who support Mr. Burnley believe he is responding to government demand and helping protect American jobs.

The question, critics ask, is whether the long-term implications are being ignored in favor of a quick fix.

This year, domestic and import automakers are introducing nearly as many new high-performance engines and transmissions as they are new models. Cadillac is boasting redesigned luxury cars as much as nine inches longer than last year's versions. And Nissan stresses that its new Maxima model is larger than anything the Japanese automaker has ever sold in the United States.

In automotive advertisements, 0-to-60 acceleration timings are winning out over fuel economy ratings.

In that environment, it's not surprising that Burnley would use his discretionary powers to trim the corporate average fuel economy - the so-called CAFE standard - to 26.5 miles a gallon, 1 m.p.g. lower than that originally set by Congress.

(CAFE is the average fuel economy of all vehicles sold by a a carmaker. They are fined $5 per car for each tenth of a mile per gallon their fleet falls short of the standard. For a company such as Ford, for example, which might build 2 million cars a year and fall short by 1 m.p.g., the fine would be $100 million, or $50 times 2 million.)

This is the fourth year in a row that CAFE has been rolled back. In the 1986, '87, and '88 model years, the standard was eased back to 26 m.p.g.

Burnley's decision was quickly hailed by the nation's two largest carmakers, Ford and General Motors.

It ``recognizes that consumer preferences resulting from low fuel prices have placed a particularly heavy burden on our efforts to comply with the 27.5 m.p.g. standard,'' said Ford vice-president Helen Petrauskas.

Ford and GM were the leading forces in the fight to roll back CAFE. They argued that the 27.5-m.p.g. CAFE standard would have worked to the benefit of the Japanese. Companies such as Honda, Toyota, and Nissan, are introducing a variety of new large cars, and even though those individual models fall short of CAFE, the Japanese have built up enough ``credits'' with their small cars to meet the standard.

On the other hand, Ford and GM have no credits stored up, and they would have faced billions of dollars in fines had the government not acted favorably. The two automakers claimed they would have had to stop selling big cars, resulting in plant shutdowns and the loss of thousands of jobs.

While GM officials say they are pleased by Burnley's decision, they feel the government hasn't gone far enough, and will continue lobbying Congress to scrap CAFE entirely.

But is Washington being shortsighted in its willingness to cater to the public's taste for performance and the auto industry's profitability?

``I can think of few things that run so counter to our national self-interest,'' says Jessica T. Matthews, vice-president of the World Resources Institute, a policy research center in Washington, D.C.

Clarence Ditlow, director of the Center for Auto Safety, a frequent critic of the auto industry, agrees. ``It's going to cost consumers more money for more gasoline. And it's going to worsen the greenhouse effect.''

Environmentalists note that automotive emissions are one of the major sources of carbon dioxide - the gas that would cause the possible warming of the atmosphere dubbed the greenhouse effect.

While many critics of the rollback believe the government should be forcing the automakers to increase production of small, fuel-efficient automobiles, Ms. Matthews acknowledges that in the long term, public demand must also be addressed.

Pointing out that the US has some of the lowest fuel prices in the world, Matthews says, ``The only way I see to change things is to slowly phase in a fuel tax giving Detroit time to phase in more fuel-efficient cars.''

Such a tax has won widespread support from influential figures, including Chrysler chairman Lee Iacocca. Public support for a tax is tepid, however, according to a new survey by the Analysis Group Inc., a New Haven, Conn., polling firm. Of registered voters surveyed, 56 percent favored a 25-cent-a-gallon tariff on imported crude oil. But 72 percent opposed a 30-cent-a-gallon increase in the gasoline tax.

Matthews says that ``if the vote were held in the dark,'' Congress would pass a gas tax today. She is hopeful lawmakers may still act sometime next year when they are again forced to deal with the budget deficit, since it is estimated that every penny the federal gas tax is increased results in an additional billion dollars in tax revenues.