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'Marketplace' Report: SUV Ruling Rocks Carmakers

ALEX CHADWICK, host:

From NPR News, it's DAY TO DAY with the story about SUVs and greenhouse gasses. A federal court has rejected the Bush administration's fuel economy standards for them. MARKETPLACE's Bob Moon joins us.

Bob, these are really big numbers here because the vehicles that are covered, they're half of all automotive sales in this country. So how is this ruling going to change the fuel standards that are in place for them?

BOB MOON: Well, interestingly enough, Alex, no specific numbers from the court here; it just says do better. This ruling stems from a lawsuit against the federal government that's being pursued by California and 10 other states along with a couple of cities and four environmental groups. They sued after Norman Mineta, who was then the transportation secretary, announced the new fuel economy standards early last year.

At the time, Mineta hailed these new standards as the most ambitious fuel-economy goals ever for SUVs and minivans and light trucks and similar vehicles. Well, critics complained that there were loopholes that allowed some popular vehicles that mostly get used to transport passengers - the Chevy Taho and the Ford Expedition among them - to be sold with worse fuel economy than other passenger cars.

The current rules would require carmakers to increase mileage for light trucks about a mile more per gallon by 2010, to 23 and a half miles per gallon. The lawsuit called that trivial. The court is now telling the Bush administration to go back and do better. How much better? Well, the court says the new rules should provide the maximum feasible fuel savings.

CHADWICK: Well, it's not just the Bush administration; it's the carmakers who really have to look at this. What are they saying?

MOON: Yeah, they're complaining now that they've already started developing models that they're planning on selling as far out as four years from now, geared toward the standards that they were given, and this is just going to be a big setback for the them. We spoke this morning to Charles Territo. He speaks for the Alliance of Automobile Manufacturers.

Mr. CHARLES TERRITO (Alliance of Automobile Manufacturers): For the past 19 months, manufacturers have been complying with these regulations, and it's become the basis for product planning through 2011. Any changes to this program could delay progress that manufacturers have made towards increasing fleet-wide fuel economy.

MOON: Of course the side of the issue here, California Attorney General Jerry Brown argues that this ruling going to result in big savings for every car driver in the country.

CHADWICK: Is the Bush administration going to challenge this ruling?

MOON: The Justice Department is only saying that it's reviewing this decision and it's going to consider all of its options. There will undoubtedly be lots of pressure from the car industry.

CHADWICK: Is this a trend thing, Bob? I mean courts getting more active on environmental issues?

MOON: Well, some experts says it is, that the courts are increasingly finding fault with the way that the Bush administration has been enforcing environmental laws here in ways that are more friendly toward business. The Natural Resources Defense Counsel is applauding this ruling, and it says that it's encouraging that even conservative judges are tending to rule this way.

CHADWICK: Thank you, Bob.

Bob Moon of Public Radio's daily business show MARKETPLACE, produced by American Public Media. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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