Since when does NHTSA look out for the best interests of the job market?
NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION.
No one wants these jobs to leave the US. But when you have an agency that, by name, should be concerned with HIGHWAY TRAFFIC SAFETY and enforcing government regulations, the last thing they should base decisions on is the number of jobs they could save. Once they do that, they cease to be regulatory and start being a non-elected policy-making board.
Federal regulators decided Tuesday to exempt Nissan Motor Co. from government fuel economy standards, a highly unusual move prompted by concern enforcement could lead to U.S. job losses.
Nissan had said without the exception it might move production of one of its U.S.-produced vehicles overseas. NHTSA determined such a move would cost hundreds of U.S. jobs because American suppliers would lose business.
"Projected job losses from denying the petition outweigh potential job losses from granting it," NHTSA Deputy Administrator Otis Cox said.
Nissan said the North American Free Trade Agreement was the reason it wanted the exemption. Under NAFTA, vehicles from 2005 and later will be classified as "domestic" if at least 75 percent of their parts or labor originate in the United States, Mexico or Canada.
Nissan had some powerful Republican lawmakers on its side. Senate Majority Leader Bill Frist of Tennessee and Mississippi Gov. Haley Barbour, the former Republican National Committee (news - web sites) chairman, were among those who asked NHTSA to grant Nissan's petition.
The United Auto Workers (news - web sites), which has tried unsuccessfully to unionize Nissan workers, said the decision was misguided. Nissan had more than 10 years to plan for the NAFTA changes and could have shifted production of some of its foreign vehicles to the United States, the UAW said.
"This will hurt overall jobs in the U.S.," UAW legislative director Alan Reuther said.
NHTSA looked at the impact of its decision on other companies and determined only 70 jobs would be lost because of it.
From the NHTSA press release:
In its analysis, NHTSA found that granting the petition would likely help to keep some parts-manufacturing jobs from going overseas, which could have happened if Nissan were forced to reduce the domestic content of the Sentra in order to have it reclassified as an import to gain CAFE compliance for its import fleet.
Nissan claimed it faced the prospect of purchasing vehicle parts from suppliers overseas in order to avoid falling below the passenger car CAFE standard. Granting the petition allows Nissan to continue purchasing those parts from North American suppliers and retains jobs that might otherwise be lost.
Under a “two-fleet” rule, the CAFE statute requires that auto manufacturers, in calculating fuel economy, divide their vehicles into domestic and non-domestic fleets. With the petition granted, Nissan can combine its fuel-efficient Mexican-made model with its less fuel-efficient models to create a single fleet that is more likely to meet the CAFE standard.
Nissan is one of a very few manufacturers that qualify for this exemption. Only foreign manufacturers that produced or assembled vehicles in the United States between 1975 and 1985 qualify for the exemption.
The exemption from the two-fleet rule applies to 2006-2010 model year cars.