The following post is by Mia Veltri, Policy Advisor for the BlueGreen Alliance Vehicles and Advanced Transportation Program.
By the agencies’ own estimate, the proposed rollback will cut investment in advanced technology built in the United States by billions annually and result in 50,000-60,000 fewer auto sector jobs from 2021 on when compared with the current standards. These numbers don’t even account for potential long-term impacts of reduced advanced technology production, including losing the race to build the next generation of advanced vehicles and technologies in the United States.
We urge the federal agencies to come back to the table with California and other stakeholders to agree on standards that stand up for American innovation, investment, manufacturing, and jobs. There is still time to get this right.
As we’ve seen over the past decade, the endurance of the American auto industry is dependent on smart policies—like the existing fuel economy and greenhouse gas emissions standards—that help ensure America’s competitiveness in a rapidly changing technological market.
Currently, at least 288,000 American workers are building the technologies that improve fuel economy for today’s innovative vehicles, with over 1,200 factories and engineering facilities in 48 states. According to the 2018 U.S. Energy and Employment Report, more than 476,000 employees work in some capacity with components that increase fuel economy for vehicles—with just over 300,000 of them in manufacturing—and 23 percent of automotive suppliers report earning all of their revenue from technology that improves fuel efficiency.
These estimates do not include indirect jobs further down the supply chain, such as in steel smelting or lithium mining. They also don’t include induced jobs that come from manufacturing companies paying taxes and purchasing supplies, or from autoworkers spending their paychecks. For example, one study found that every automotive assembly plant job supports another 9 to 12 jobs throughout the economy.
Repeated economic modeling of the standards has shown that strong fuel economy standards don’t just increase jobs, but benefit the economy as a whole. In short, when consumers save on fuel, they re-spend those savings elsewhere in their daily life, communities, and businesses.
The administration has suggested that the costs of complying with the current standards are too high, but BlueGreen Alliance research shows that those “costs” represent automaker spending on product and manufacturing innovation, investments in factories and technology, and purchases of additional and upgraded components from suppliers. These costs have spurred a much-needed, multi-billion dollar reinvestment in American manufacturing and jobs nationwide.
For example, since 2008, U.S. automakers alone have invested approximately $64 billion in facilities across the United States, completing 258 investments at 100 factories. In addition, 42 promised investments totaling at least $12 billion are in process or have been announced at 37 U.S. facilities through 2020. A significant portion of this $76 billion total represents added or enhanced investment in the products and manufacturing processes developed specifically to meet the standards.
The current trajectory of the standards provides companies with the certainty to commit to major investments in America instead of abroad. As the Motor & Equipment Manufacturers Association points out in their comments to the proposed rule, the agencies’ proposal would diminish the value of investments that have already been made by automakers and suppliers, and deter future spending in America on fuel efficient parts and components.
Suppliers have already planned and paid for production and development of technologies designed for automakers to meet the standards through 2025. Freezing the standards at the 2020 level would have significant negative impacts on the suppliers and their workforce.
As the United Autoworkers noted in their comments to the proposed rule, “fuel efficiency is the auto industry’s future.” Strong clean car standards have spurred American global leadership in the invention and production of innovative fuel efficiency technologies, and we remain in a position to continue to grow and lead. In contrast, degradation of the standards would disadvantage U.S. companies in a rapidly advancing global marketplace and cede American leadership–and jobs—to other nations.
China and the European Union have set ambitious goals to meet stronger fuel economy and GHG standards over the next decade. If we step away from the global race to build and develop the next generation of clean and efficient vehicle technology in the United States, we threaten the future of American manufacturing and good American jobs.