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Report Says General Motors May Be Forced to Spend More Than Rivals to Meet New Fuel Economy Rules

December 16, 2002

Reuters has reported, citing a United States government analysis, that General Motors might have to spend $678 million to meet new federal fuel economy rules, far more than any other vehicle manufacturer. According to the news agency, the National Highway Traffic Safety Administration (NHTSA) found that GM's truck fleet would fall short of higher fuel economy standards in model years 2005 to 2007, while Ford and DaimlerChrysler would meet or be just below the standard.A GM spokesman on Dec. 13 told Reuters that the company was committed to meeting any federal fuel economy requirement, but warned that it would be "extremely challenging.""We think it could be difficult to achieve given current and expected demand for large vehicles," spokesman Mike Morrissey told Reuters. "Obviously, we've not said we're on a plan to meet this standard as written. We're certainly considering changing product mix or limiting the availability of popular vehicle features," Morrissey added, according to Reuters.According to Reuters, the NHTSA said GM projected its truck fleet would achieve between 18.7 mpg and 20.0 mpg in model year 2005, rising to a range of 19.1 mpg to 20.8 mpg for 2007. The estimates exclude GM's Hummer brand, whose SUVs are so large they are treated as commercial vehicles and excluded from fuel economy rules, Reuters added.According to Reuters, Ford said its fleet, including all domestic and foreign brands, would achieve 20.9 mpg in 2005, 21.6 mpg in 2006 and 22 mpg in 2007 while DaimlerChrysler said its fleet would average 21.3 mpg in 2005, rising to 22.3 mpg in 2007. The DC estimates included Chrysler, Dodge, Jeep, Mercedes-Benz and also Mitsubishi, Reuters noted.Reuters noted that the analysis excludes credits vehicle makers get for vehicles that run on alternative fuels like ethanol, and for achieving fuel economy averages higher than the standards. Such credits have been key for vehicle makers to meet current rules, the report added.
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