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Auto emissions deal: behind the scenes

The agreement for a strict nationwide standard for U.S.-sold cars by 2016 took a mix of firm demands and major concessions from the government. Obama sees the talks as a 'template for more progress.'

May 20, 2009|Jim Tankersley

WASHINGTON — It had taken weeks of hardball negotiations, but on Sunday afternoon, White House officials thought everything was falling into place. In less than 48 hours they would unveil a landmark deal with U.S. automakers to impose sharply higher fuel-efficiency standards on new cars and trucks.

Then at 3 p.m., the telephone rang.

A senior Ford executive said the company had run the numbers again and concluded it might not survive if it accepted the deal. If Ford pulled out, it would mean a major setback for two of President Obama's signature goals -- combating global warming and reducing the nation's appetite for foreign oil.

In the end, with more number-crunching and another application of White House pressure, Ford did not bolt. And when Obama stepped into the Rose Garden on Tuesday afternoon to announce the deal with the auto industry and the state of California, he hailed it as a road map for progress on other knotty issues.

Yet the near-collapse of the effort was a dramatic reminder of how hard it can be to break through years of stalemate and build a consensus for action on a problem that has pitted some of the country's most powerful interests against each other.

"Everybody at some point, from California to the companies, had a moment of going, 'Uh-oh, what am I thinking?' " said Carol Browner, director of the White House Office of Energy and Climate Change Policy.

The push to keep the automaker on board involved a key official on a cellphone who mapped strategy while huddled in the relative quiet of a bathroom at the Washington Nationals baseball stadium. Another broke away from a birthday party in New York.

What made the agreement possible was a combination of unyielding demands by the federal government on some points and a willingness to make major concessions on what it considered smaller ones, said officials involved who requested anonymity when discussing the negotiations. With the U.S. auto industry on the brink of collapse, its leaders came to see that they could no longer forestall action -- and would be better off with a single, strict national rule than a state-by-state patchwork.

"We were able to convince everybody to keep their eye on the ball -- a national standard -- and work on the way we get there," said Browner, who spearheaded the effort.

Obama basked in the success on Tuesday. "All the people who have gathered here today . . . they've created the template for more progress in the months and years to come," he said. "Everything is possible when we're working together, and we're off to a great start."

The agreement announced at the White House will lead to a 30% reduction in carbon dioxide and other emissions by 2016 from vehicles sold in the U.S.

To meet that standard, according to the White House, new vehicles sold in the U.S. seven years from now will have to average 35.5 mpg, up from 25 mpg today. The agreement, coupled with increased fuel-efficiency requirements Congress approved in 2007, would add $1,300 to the price of a new car in 2016, the administration estimated.

The plan does not spell out specific mileage requirements, but effectively would require them by capping the greenhouse gas emissions that scientists blame for global warming. The new limits are projected to reduce U.S. oil consumption by about 5% a year from 2011 to 2016. The nation currently uses about 7.1 billion barrels a year.

As the deal was being crafted, domestic and foreign carmakers trooped throughout the month of April to the Eisenhower Executive Office Building. Administration officials greeted them with a message: We're setting national limits on climate-altering emissions from cars and trucks. The limits aren't negotiable. Tell us what you need to meet them.

One by one, 10 automakers signed on -- after securing promises to make the limits more flexible. A Ford spokesman said the company had "worked closely with the administration to make sure we understood the agreement."

So did California, which since 2002 has sought to impose tougher emissions standards on its own. The Obama plan would achieve comparable cutbacks, but give automakers more time to adapt. As a result, the automakers agreed to drop their legal challenges to California's standards.

The United Auto Workers union also agreed to the administration's plan, after being assured that the rules wouldn't push factory jobs overseas.

On Tuesday, Ford Chief Executive Alan Mulally stood by Obama's side. "The president is going to continue to work toward an integrated energy policy in the United States, and the consumer is going to be involved," Mulally told reporters at the White House. "We're all going to move forward, I believe, on this journey to energy independence, energy security and long-term stability."

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