The AP suggests that pressure from environmental groups might have been an issue:

WASHINGTON — A top official with Mothers Against Drunk Driving who was chosen to oversee a federal highway safety agency has withdrawn his name for the post, the White House said Tuesday.
The Obama administration said in April it intended to nominate Chuck Hurley to become the administrator of the National Highway Traffic Safety Administration. Hurley, who was not formally nominated, is a longtime safety advocate and has served as MADD’s chief executive officer since 2005.
Some environmental groups had questioned Hurley’s commitment to tougher fuel efficiency requirements and his ties to automakers. MADD has received funding from several auto companies, including General Motors Corp., Toyota Motor Corp., Ford Motor Co. and others.