Trump’s car-industry battle reveals a surprising divide between big auto companies and oil giants (GM, FCA, F, TSLA)

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The major automakers and the big oil companies have long been thought to have shared interests.
But when it comes to California’s waiver to set its own standards under the 1970 Clean Air Act, those interest could diverge.
Trump’s EPA has taken on California in a looming battle that oil giants want, but big auto companies do not.

Oh, what a fine mess we’ve found ourselves in!

The auto industry and the Detroit carmakers, in particular, thought President Trump was in the bag. General Motors, Ford, and Fiat Chrysler Automobiles moved quickly to forge a deal soon after the 2016 election, asking for a re-opening of a review of fuel-economy standards that had been locked in late in the Obama administration.

The automakers had a fair case and had been pleading it for months, with Ford taking the lead. Trump wanted a deal. There might even have been a sort of weak quid pro quo for Trump, who might have thought Detroit would do some hiring or invest in factories, providing headlines that would please the President’s midwestern base voters.

But Trump wanted another deal — or more accurately, he wanted to punish California, which for decades has held a waiver to set its own standards. Thanks to the language of the 1970 Clean Air Act, California can ask the EPA for a waiver whenever it wants, as the Atlantic noted:

This power is reserved alone for California, and it only covers pollution from cars. No other state can ask for a waiver. (In all of federal law, this might be the only time that a specific state is given special authority under such a major statute.)

Under the same provision, any other state can choose to adopt California’s more stringent standards. Fifteen states currently opt for the tougher rules, including Georgia, Pennsylvania, North Carolina, and the entire New York metro area. This means that California’s rules actually cover 135 million people, more than 40 percent of the US population.

Despite being something of a purple state, California’s government is bright blue — and the state is a constant challenge for Trump, with a retiring governor in Jerry Brown who has been a leftist combatant since he took on the oil companies as a lawyer back in the early 1970s, leading to his first stint as governor.

With just a few months left in his final term, Brown is preparing to pass the baton a successor, most likely former San Francisco mayor and Democratic frontrunner Gavin Newsom. At stake is the leadership of state whose $2.7-trillion economy is larger than Britain’s.

Car companies want a single national standard

California is no-how, no-way backing down from its EPA exception — and the automaker’s don’t want it to. The language they typically use is “one national standard,” by which they mean California’s standard. If compelled to choose, the car companies would go with the Golden State and not look back, given the nightmare of meeting two national standards or trying to figure out what to do in terms of future product planning …read more

Source:: Business Insider


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