Source AP ©

Ford Motor Co to meet tough federal fuel economy regulations

Ford Motor Co. will submit to tougher federal fuel economy regulations to be imposed by 2020.

"Our commitment is to improve the fuel efficiency of all the vehicles no matter what the size," Mulally said after signing a new four-year contract with the United Auto Workers.

The auto industry's fleet of new cars, sport utility vehicles, pickup trucks and vans will have to average 35 mpg (6.7 liters per 100 kilometers) by 2020, according to the agreement that congressional negotiators announced late Friday. That compares with the 2008 requirement of 27.5 mpg (8.5 liters) average for cars and 22.5 mpg (10.4 liters) for light trucks. It would be first increase ordered by Congress in three decades.

Majority Democrats plan to include the requirement in broader energy legislation to be debated in the context of $90-per-barrel oil and growing concerns about climate change. The House plans to begin debate this week.

But Sen. Carl Levin noted the measure still must go through both chambers as part of the larger energy bill.

Levin said other issues include how excess profits of oil companies will be used and the standards of alternative energy use by utilities.

Environmentalists have sought stricter gas mileage standards for years, saying that is the most effective way to curb greenhouse gas emissions and oil consumption.

The energy bill will help accelerate plans by automakers to bring more fuel-efficient technologies to conventional engines and alternatives such as gas-electric hybrids and vehicles running on ethanol blends. For the first time, for example, manufacturers will receive credits for building vehicles running on biodiesel fuel.

Domestic automakers and Toyota Motor Corp. vehemently opposed a Senate bill passed in June that contained the same mileage requirements and timeline. They warned the measure would limit the choice of vehicles, threaten jobs and drive up costs.

The companies backed an alternative of 32 mpg to 35 mpg by 2022. At the time, Chrysler LLC executive Tom LaSorda told employees the Senate bill would "add up to a staggering $6,700 (4,568 EUR) - almost a 40 percent increase - to the cost of every Chrysler vehicle."

Executive Chairman Bill Ford said Monday it will be a stretch to meet the 35 mpg standard, but he is confident Ford can do it.

"We have to do it, and we have the best people in the industry getting ready to do it," he said.

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