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Automakers Get Behind Obama Efficiency Plan, Brace for Tough Trade-Offs

President Obama smiles during a meeting Monday in Washington. (AP Photo)

American automakers got in line Tuesday behind President Obama's call for strict fuel efficiency and emissions standards, bracing for a string of trade-offs that the industry calls tough but doable. 

The requirement that automakers' fleets average 35.5 miles per gallon by 2016 drew criticism from those who say such standards will lead to more dangerous vehicles and hurt the economy in the middle of a recession. 

But the reaction was mostly positive, as lawmakers, environmental groups, consumer groups and the auto industry said the long-term benefits should outweigh the short-term costs. 

"The status quo is no longer acceptable," Obama said, warning that the American appetite for oil comes at a "tremendous price." 

Flanked by auto executives and officials, the president said the proposal would simultaneously help end U.S. dependence on foreign oil, lead automakers to develop more advanced products and save consumers money in the long-term. 

"This rule provides the clear certainty that will allow these companies to plan for a future in which they are building the cars of the 21st century," Obama said. "Yes, it costs money to develop these vehicles. But even as the price to build these cars and trucks goes up, the cost of driving these vehicles will go down, as drivers save money at the pump." 

RELATED: How CAFE Really Standards Work?

The standards are expected to add $1,300 on average to vehicles. But Obama said drivers would make that back within three years due to savings on gas. 

Wade Newton, spokesman for the Alliance of Automobile Manufacturers, said having a national standard is better for the industry than having a patchwork of varying standards on a state-by-state basis -- which is what they feared would happen. He said Obama's plan would give manufacturers the "certainty" they need to plan for the full development of cleaner vehicles. 

Newton said the 2016 deadline can give automakers enough time to comply, since it typically takes five to seven years to bring a new product to market. Plus some existing vehicles will be retooled to comply, which could take less time. 

"We're going to try our hardest. This is going to take the industry working as hard as it can and employing every single engineer we can," he said. "It's challenging, but it's doable if we invest all our resources into it and have consumer support." 

Ford released a statement calling the plan "decisive and positive," good for the economy and the environment. 

General Motors CEO Fritz Henderson said his company is "fully committed" to the approach. 

Detroit's Big Three had long-resisted such economy standards. But with the government having poured billions into GM and Chrysler, and with Chrysler in the throes of a government-supervised bankruptcy and GM facing the possibility of a similar fate by month's end, industry leverage appears to be minimal. 

Ten car companies and the United Auto Workers union support the administration's changes, according to the White House. Officials said the changes will lead to an estimated reduction in oil consumption of about 1.8 billion barrels of oil "over the lifetime of the program." 

A senior administration official said the changes (when compared to current pollution and vehicle use totals) will have the same effect as removing 900 million metric tons of carbon dioxide from the air, taking 177 million cars off the road and shutting down 194 coal-fired power plants. 

Environmental groups hailed the move. 

The Union of Concerned Scientists estimated the plan would not only drop U.S. dependence on foreign oil but offer a net savings to consumers of $30 billion by 2020 -- based on a gas price of $2.25 per gallon. Higher gas prices would mean more savings. 

But some Republicans and analysts warned that such rosy estimates ignore other factors. 

For instance, one side effect could be that consumers gravitate toward used cars to avoid the higher price tags on the more fuel-efficient cars and retain the features they liked in older models. 

"The law of unintended consequences is at work always and everywhere," said Michael LaFaive, director of fiscal policy at the Mackinac Center for Public Policy, which focuses on policy issues in Michigan. "The headline should read 'U.S. to boost the attractiveness of used cars by 2016'." 

He warned that until the old fleet of vehicles flat-out sputters and dies, consumers could be squeezing every last mile out of their used cars -- in turn holding sales of new, fuel-efficient cars to a low level. 

Plus critics have long warned that strict fuel-efficiency standards hurt vehicle safety, since one of the easiest ways to increase fuel economy is to reduce the weight and size of vehicles -- making them less crash-resistant. 

In addition, reducing the engine size can increase efficiency, but it also hinders acceleration. Sticking on tires with less friction can increase efficiency, but it also makes it harder to brake. 

"While these new standards may sound good, they actually make cars more expensive, reduce safety and do little to improve the environment," Sen. Jim DeMint, R-S.C., said in a statement, warning that smaller cars are more dangerous in high-speed crashes and that it hurts the economy by raising auto costs. 

"All Americans are for a cleaner, healthier environment, but we're concerned that today's announcement could significantly increase costs for millions of families at a time when they can afford it least," said Antonia Ferrier, press secretary to House GOP Leader John Boehner

The cons outweigh the pros, advocates of the plan say. 

The Obama plan would increase fleet fuel efficiency by 5 percent per year starting in 2012. 

For 2016 -- the final year new the rules will apply -- the fleet fuel efficiency standard for all domestically sold passenger cars will be 39 mpg. It will be 30 mpg for all domestically sold light trucks and sport utility vehicles. The average of these two equals a passenger car and light truck fuel efficiency standard of 35.5 mpg. The current requirements are 27.5 mpg for cars and 23.1 mpg or trucks. The tighter standards will first affect the 2011 model year for cars and trucks. 

The administration will also impose the first-ever tailpipe emission standard for every class of vehicle -- a move that will bring regulations of fuel efficiency and pollution under one set of rules. The Department of Transportation and the Environmental Protection Agency will, for the first time ever, jointly monitor and enforce fuel efficiency and tailpipe emission standards. 

Despite an obvious shift toward sleeker, more efficient vehicles, Newton said the new standards will preserve the wide variety of models on the market. 

"This does preserve consumer choice," he said, assuring that SUVs will not disappear as a result of this program. 

He pointed to the fact that under the plan, the requirements for each individual model would be based on that model's attributes. So while the entire fleet must average 35.5 miles per gallon by 2016, bigger SUVs could have less stringent standards than compact cars. 

"Consumers can continue to buy the cars they want. They'll just get a savings because that car's going to go further on every gallon of gas," Obama energy adviser Carol Browner told FOX News. 

However, it could still be more costly to bring vehicles like SUVs up to code, meaning the price tag increase on those vehicles could be much more than on smaller autos. 

FOXNews.com's Judson Berger and FOX News' Major Garrett, Wendell Goler and Dan Springer contributed to this report.