Florala

Issue date: 1/29/09 Section: News

Media Credit: Associated Press CHALLENGES KEEP ON COMING - Making greeners cars could be difficult at a time when some cars companies are hanging by a thread and auto sales have plummeted to the lowest levels in two decades.

WASHINGTON (AP) - President Barack Obama wants automakers to make greener cars at a time when General Motors and Chrysler are hanging

by the thread of a massive

government loan and auto sales have plummeted to their lowest levels in more than two decades.

Obama's plans could bring smaller cars, more hybrids and advanced fuel-saving technologies

to showrooms, but car shoppers will probably pay more upfront because the new rules are expected to cost the hamstrung industry billions of dollars.

"The consumer needs to understand that they will see significant increases in the cost of vehicles," said Rebecca Lindland, an auto analyst for the consulting firm IHS Global Insight. Her firm estimated the upgrades could add $2,000 to $10,000 to the price of a vehicle.

Obama on Monday directed the Environmental Protection Agency to review whether California and more than a dozen states should be allowed to impose tougher auto emission

standards on carmakers to fight greenhouse gas emissions.

The Bush administration had blocked the efforts by the states, which account for about half of the nation's auto sales.

The new president also said his administration would issue new fuel-efficiency requirements

to cover 2011 model year vehicles. The rules would be the first step toward a 2007 energy law that requires the auto industry to boost efficiency

by 40 percent to at least 35 miles per gallon by 2020.

Obama set in motion a new regulatory process at a time when the nation is coping with an economic recession and auto sales have fallen to their lowest pace since 1982. Underscoring the hardships, GM said Monday it would slash 2,000 jobs at plants in Michigan and Ohio.

In December, the Bush administration signed off on $17.4 billion in loans to General Motors Corp. and Chrysler LLC to keep the companies afloat. The automakers are undertaking

intense efforts to restructure

this spring or face potential

bankruptcy.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., said he doesn't believe the EPA will approve all the waivers asked for by the states. To do so would be economically unworkable.

"If the industry is in total shambles, you can have any regulation you want - it's not doable," he said.

Cole said the additional regulations would have to be implemented "in a way that's achievable in the industry."

Environmental organizations

said Obama's approach would help the companies in the long term, forcing them to produce fuel-efficient cars coveted by more consumers. Roland Hwang, a senior policy

analyst with the Natural Resources Defense Council, estimated that a more efficient car would save its driver $1,000 to $2,000 in fuel costs over its lifetime, offsetting some of the upfront cost.

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