Toyota Screwed Over during Fuel Efficiency Negotiations?

A government report says that recently released documents show foreign automakers were mostly bullied into accepting new efficiency standards. Toyota specifically feels like it was screwed.

In a recently released report, Toyota wrote a hand written note to White House negotiators saying it felt screwed over by the fuel efficiency negotiations.

The report released on August, 10 by the House Oversight and Government Reform Committee Republican majority staff says the Obama administration “openly played automakers off of each other to gain a tactical advantage over the industry.The inevitable product of this reckless process was a pair of rulemakings that reflect ideology over science and politics over process. … Americans will be forced to drive expensive, unpopular and unsafe automobiles mandated by the Obama administration,” according to the Detroit News.

The issue seems to be that the Obama Administration first went to the Big 3 to craft the new rules. Then, it told smaller automakers and foreign automakers to follow along with those recommendations.

Democrats don’t see the issue the same way with Rep. Elijah Cummings, D-Md., saying “any allegations that the White House is seeking to weaken the auto industry are simply ridiculous — this is the White House that saved the auto industry from its near-collapse.”

Toyota for its part thought the deal was unfair and TMS U.S. chief Jim Lentz wrote in a hand written note to then White House chief negotiator Ron Bloom that “”Japan is angry. Feel like they have been screwed.”

Specifically, Toyota wants credits for hybrid vehicles and wanted more flexibility for truck standards. Currently credits are granted for natural gas, flex-fuel and electric vehicles. Apparently, Toyota is also arguing that the way the new rules are written, the definition of a full-size truck excludes the Toyota Tundra (we believe this deals with Toyota’s lack of HD-type trucks).

Ultimately, Toyota signed off on the deal to appease the administration and create a single, unifying fuel efficiency standard. Also prompting the agreement was the state of California which had been pressuring automakers and the Federal Government into creating higher standards. Automakers started to dread having to meet seemingly impossible fuel efficiency standards for only one state.

Probably the biggest item that the automakers were able to get some agreement on is a “mid-term” review to determine if the final fuel efficiency standards are feasible. The final 2017-2025  fuel efficiency standards are expected to be unveiled on August 15.

Do you think the Obama Administration was right to go to the Big 3 first or should they have talked with everyone at once?

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