President Trump's first State of the Union speech touched on Detroit’s auto industry. The president said that he “halted government mandates,” and his actions would “get the Motor City revving its engines once again.”
Daniel Howes, business columnist for The Detroit News, joined Stateside to talk about the truth of these claims and the landscape of the U.S. auto industry.
Listen to the full conversation above, or read highlights below.
On “government mandates”
“The president did not roll back fuel economy standards,” Howes said. "He didn’t then and he hasn’t now. But both his critics and he himself mischaracterize what’s actually happening.”
Around 2011, Howes said, the Obama administration reached a deal with automakers “to increase fuel economy regulations to 54.5 miles per gallon by 2025.” Part of that deal involved a mid-cycle review, which would serve as a potential “contract re-opener,” Howes said. At the end of the Obama administration, the White House opted to do review, however the car companies objected, saying it wasn't the comprehensive review they had originally agreed to.
President Trump has decided to conduct the mid-cycle review. “So what the president has done is basically reinstated the original terms of the Obama deal with the auto industry,” Howes said.
Is the auto industry following President Trump’s lead?
“[Auto manufacturers] understand the political environment they’re in, but they’re not working for President Trump, and they’re not working for the Republican party. They work for their shareholders. And if you look at the decisions that they’re making, it is very clear—to me at least—that that is what’s driving them: better returns for shareholders, for investors.”
On the accuracy of Trump’s comments
Howes called President Trump’s comments on Detroit and the auto industry “directionally correct.” However, he said, “as is often the case with [President Trump’s] public pronouncements, they’re lacking in nuance and detail.”
(Correction: An earlier version of this story stated the Obama administration opted not to do the mid-cycle review. It is more accurate to say that the EPA held a review in late 2016 but the car companies felt it was not the comprehensive review they had originally agreed to. The story has been corrected above.]