A crackdown on gas mileage rules may be coming from the EPA to make sure fuel economy matches manufacturers’ claims. Tighter regulations are expected for gas estimates on window stickers in car showrooms after the EPA discovered that fuel economy figures for Ford’s C-Max gas-electric hybrid were inflated. Ford is now re-stating the combined city-highway mileage estimate made on the crossover to 43 mpg from 47. Millions of dollars will also be refunded to customers who bought or leased the vehicle. C-Max buyers will soon get a $550 check, while those who leased will receive $325.
The EPA also plans to change the way it allows automakers to group similar vehicles together for gas mileage tests. A top official told USA Today the EPA will dramatically increase its vehicle testing and come up with fuel economy numbers based on government rules.
Two public pension boards in Detroit plan to file objections to the city’s eligibility to claim bankruptcy. The moves set the stage for a legal fight over the Chapter 9 filing, and whether the city can slash retirement benefits for its workers. If Detroit is allowed to proceed with its plans the bankruptcy could lead to painful changes elsewhere for millions of teachers, firefighters, police and other city and state workers.
“There’s been a belief in the public sector that these pension promises are safe no matter what,” says finance professor Robert Novy-Marx of the Simon School of Business at The University of Rochester. “They viewed them as deferred compensation that was theirs. They have a right to it.” But a ruling in federal bankruptcy court in favor of Detroit would change all that. “It is possible this is potentially an important precedent-setting case,” says Novy-Marx. Some generous public sector pensions are seriously under-funded, “I think that what happened in Detroit may make this crisis happen much sooner.”
It’s been a losing week so far for stocks. The Dow, Nasdaq and S&P all fell about 1.5 percent yesterday after disappointing news from Wal-Mart and Cisco. Light summer volume may have magnified the loss
In a big challenge to PayPal, Facebook is planning to introduce a new mobile payment system that lets users make purchases on mobile apps that partner with the social networking site. The company says it’s working on a “very small test,” and that it has a “great relationship with PayPal.” Facebook told the website AllThingsD that it chose JackThreads, a flash-sale shopping site for young men, as its pilot partner. Read our full story about Facebook’s move.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc