Business Notes Autos

After the first round of OPEC-induced oil price shocks, Congress passed a law that required U.S. automakers to build more fuel-efficient cars. By the close of the 1985 model year, said the 1975 Energy Policy and Conservation Act, cars should average 27.5 m.p.g., vs. the gas-guzzling 14 m.p.g. that was the norm when the law was passed. Now the September deadline looms, and only Chrysler's fleet can meet the standard. Ford's cars will average 25.9 m.p.g., GM's 25.1. Technically, the two largest carmakers could face fines of up to $400 million in the case of GM and $80 million for Ford.

Both GM and Ford claim that the ruling is an anachronism. Gasoline is not the $2 or $2.50 per gal. that was anticipated in 1975 for 1985. Instead, it is around $1.20, and plentiful. Ford and GM want the final standard rolled back to 26 m.p.g. Says GM Chairman Roger Smith: "We won't pay the fine." The company says that it will curtail production of larger cars that bump up the corporate fleet average if the law is not changed. Pressure is building in the Senate, though, to hold the line at 27.5 m.p.g. The Government is expected to decide this month whether to relax the standards.