Fields' CAFE claim comes with an asterisk

Ford Motor Co. CEO Mark Fields asked President Donald Trump last month for relief on strict Obama-era fuel economy mandates, claiming "various studies" say 1 million jobs are at risk if the regulations aren't relaxed.

But independent industry analysts and environmental groups argue that figure is unrealistic and that Fields cherry-picked a worst-case scenario from a dubious report.

Fields, along with General Motors CEO Mary Barra and Fiat Chrysler Automobiles CEO Sergio Marchionne, had met with Trump at the White House on Jan. 24.

Fields revealed the details of the discussion with the president during a question-and-answer session at the National Automobile Dealers Association convention in New Orleans, but he did not cite which studies he was referring to.

"The point that we made, as a group, on regulations and fuel economy and one national standard, we were not advocating for getting rid of the standards," Fields said. "We think having one national standard for fuel economy is really important. And we said, various studies have said up to 1 million jobs could be at risk if we're not given some level of flexibility on that and aligning with market realities, so that really resonated with him."

Fields has been lobbying for relief from corporate average fuel economy standards because of a lag in demand for small cars and continued low gasoline prices -- two factors not taken into account when the standards were announced in 2011.

Last week, Ford referred to a statement by the Auto Alliance, which represents 12 automakers, that called the EPA's decision late last year to not relax the standards "disappointing."

A Ford spokeswoman later said that Fields' 1 million-jobs figure was based on a September report by the Center for Automotive Research in Ann Arbor, Mich.

The study does say 1 million jobs -- 1.13 million, to be exact -- could be lost, but its findings have been heavily criticized for using inflated data and overlooking a number of factors.

"It's a particular case taken with a particular set of assumptions that ends in an extreme result," said Alan Baum, principal of automotive forecasting firm Baum & Associates.

The 1 million figure is one of nine scenarios the study examines. Another one, for example, says the industry could gain about 144,000 jobs. And of the potential 1 million jobs lost, just 322,000 would be in the automotive sector. The remaining 805,000 are indirectly related to car production. 

For the scenario that Fields presented to occur, gas prices in 2025 would need to remain at $2.44 a gallon and the cost of implementing technologies to meet fuel economy mandates -- things such as electrification, fuel cells or 10-speed transmissions -- would need to average $6,000 per vehicle. In other scenarios, the study predicted cost increases of $2,000 and $4,000. 

The International Council on Clean Transportation, in a scathing blog post, called the $6,000 estimate "grossly inflated." 

Other studies have come to much different conclusions. The EPA has estimated the cost to add fuel-saving technologies will range from $894 to $1,565 per vehicle, depending on the time frame, and a study Baum and others conducted found that the cost would be about $1,900 per vehicle, starting from a 2010 baseline. 

The CAR study also assumes that automakers will pass the entire $6,000 cost on to consumers. In such a dire scenario, the public will stop buying cars, forcing automakers and suppliers to halt production and slash jobs. 

Baum and others argue that automakers are making enough profit to absorb some of that cost and that the CAR study ignores some of the benefits of gas-saving technology, such as added manufacturing jobs for the companies providing new technology or savings at the pump for consumers. 

"Even in the short term, we don't think there will be job losses," John German, senior fellow with the International Council on Clean Transportation, told Automotive News. "Jobs created by developing the new technology, and money put in the pockets of new consumers, will more than offset any possible impact on manufacturing jobs."

In a defense of the study posted after it was attacked by the EPA, CAR President Jay Baron noted that new technology doesn't always lead to more jobs. 

"It needs to be realized that new technologies typically substitute for existing vehicle content and production capabilities," he said. "For example, employment related to electric-drive motor production for electric vehicles replaces employment related to internal combustion engine production; aluminum mill jobs replace steel mill jobs. 

"In addition, there is no certainty that new technology jobs will be located in the United States or have the same employment multiplier effect as currently accounted for in input/output models." 

Still, critics say there are enough holes in the CAR report to make its conclusions debatable. 

"It's a bit distressing to see something thrown out there that a CEO of a major manufacturer should know is not a credible study," German said.