Automakers' plea to Reagan leeadership: less regulation
Hopes are high among US automakers that the Reagan administration will conduct an early, hard-hitting assault on what they see as questionable and costly safety and environmental regulations affecting them.Skip to next paragraph
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American car manufacturers insist that many of these existing and planned federal rules offer little or no social benefits and are key reasons for the high prices that are keeping many consumers from buying domestic models.
Accordingly, individual auto companies and the Motor Vehicles Manufacturers Association (MVMA) are busily drawing up laundry lists of regulations for the President-elct that they feel are prime candidates for dumping or toning down.
Automakers and industry analysts agree that a regulatory housecleaning could significantly help the nation's financially troubled auto industry.
"The impact could really be quite major," says Gary Ciminero, an automobile analyst with New York's Merrill Lynch & Co. The savings, he says, would come not only in a simpler car, but also in scrapping costly research and development and redesign efforts.
No one knows yet, of course, just how receptive top officials of the incoming Reagan administration will be. But the President-elect pledged repeatedly during his campaign that he would help get the government "off the backs" of American business.
One of the key proposals under study by his economic advisers is the so-called "Stockman manifesto," compiled by Rep. David Stockman (R) of Michigan, which calls, among other things, for quick relaxation or withdrawal o a halfdozen existing and planned auto industry regulations. Much of the action could be done by the executive branch alone. "The potential here is really staggering," notes Representative Stockman, who will soon direct the Office of Management and Budget. Auto companies potentially could save billions of dollars in capital and operating costs.
As the industry sees it, the turning point in the federal government's traditional adversarial approach to US automakers really began under President Carter last spring. It was then that the Carter administration fully realized the extent of the auto industry's troubles, and Detroit began to feel a fresh breeze of empathy blowing its way from Washington for the first time.
The National Highway Traffic Safety Administration, long an arch critic of the auto industry, began to praise the safety of the domestic fleet. A few of the more stringent regulations were eased. Many manufacturers, for instance, were granted waivers on the deadline by which their cars must meet tough carbon monoxide standards.
Still, automakers now view the sum of the changes as minor. "There was some relief, but there weren't any major initiatives," says MVMA vice-president Peter Griskivich. This is why the industry is hoping for more from a President-elect who stressed the need for a free market economy.
"May guess is that the new administration will take care of a lot of the relaxation without the industry having to do that much," says one longtime observer of of the auto regulation battle in Washington.
Meanwhile, however, auto industry officials remain cautious. "We're certainly not euphoric," says MVMA spokesman Mike Stanton, "but we are optimistic."
Most likely targets of the administration's efforts to shelve or relax regulations are stringent emissions standards for cars and trucks, bumper crash impact standards, pedestrian safety standards (requiring a rounder, softer front hood and fender area), and congressional insistence that some cars be specifically equipped with air bags rather than automatic seat belts. Although a move to delay the planned schedule for requiring such automatic safety devices in cars failed on Capitol Hill earlier this month, another effort in the new Congress is considered likely.
"We're hoping for delay and reversal," explains R. T. Kingman of the General Motors Corporation's Washington office. "And we'll probably have a better chance next year -- the most intense advocates of air bags have been in the Carter administration."
Indeed, in General Motors' view, more important than the administration backing off on regulatory controls is that it act quickly to revise tax policies to allow automakers to more swiftly deduct cost of new equipment and facilities. "A tax break is as good as more cash," says Mr. Kingman.