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Big 3 Urge Denial of Mileage Waiver for Nissan

March 10, 2004|From Bloomberg News

General Motors Corp., Ford Motor Co. and DaimlerChrysler are opposing Nissan Motor Co.'s request for an exemption from a U.S. fuel-economy rule, saying a waiver would give the Japanese automaker an unfair cost advantage.

Nissan is seeking to avoid reclassifying its Sentra, made in Mexico, as a U.S. car rather than an import for calculating fuel economy. The shift would push Nissan's import fleet into noncompliance and could prompt the company to move some production outside North America, the Tokyo-based automaker said in a petition filed in January with the National Highway Traffic Safety Administration.

A waiver would boost Nissan's fuel-economy rating at a lower cost than faced by other manufacturers, the Michigan-based Big Three automakers said in a letter Monday to the Department of Transportation.

"The petition raises issues of equity and disparate treatment for Nissan," they wrote. A decision is due by late April.

Vehicle makers must sell fleets of domestic and imported models that each meet the corporate average fuel economy level, known as CAFE, or pay penalties under a 1975 law. The requirement is 27.5 miles per gallon for cars and 20.7 mpg for light trucks.

The U.S. created the two-fleet rule to discourage automakers from importing fuel-efficient vehicles and cutting U.S. jobs to meet the standard. A vehicle with 75% of its parts or labor from the United States or Canada is classified as U.S.-made. Mexico will be added starting with 2005 models under terms of the North American Free Trade Agreement.

Nissan told NHTSA that it may be forced to shift production of Sentras and Tennessee-built Altimas and Maximas outside North America to bring the import fleet into compliance and avoid millions of dollars in penalties.

The waiver from the two-fleet rule was intended for automakers that start making vehicles in the United States, not to resolve discrepancies created by CAFE, the Big Three automakers said in their joint letter.

"We're following the law" in seeking the exemption, a Nissan spokesman said.

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