[7 May 2007]
Chicago Tribune (MCT)
DETROIT - In a frontal assault on the automobile industry, Sen. Barack Obama’s call Monday for tougher fuel-economy standards and new tax breaks for hybrid cars would force a retooling of the way cars are built - triggering a tepid response from business leaders in the Motor City.
As Democrats in the presidential field jockey for position, the Illinois senator outlined a detailed energy proposal that echoes calls by other Democrats for higher fuel-efficiency standards and seeks to demonstrate he has environmental credentials as robust as those who have longer voting records on these issues.
Republicans are getting in on the energy debate as well. Sen. John McCain of Arizona has repeatedly called for increasing fuel-efficiency standards, while former Massachusetts Gov. Mitt Romney has said it does not make much sense to “arbitrarily” increase fuel efficiency standards outside a comprehensive solution that would increase alternative fuels and hybrid technology.
The automakers are less excited. They have long opposed tougher fuel standards, saying they would hurt jobs, safety and affordability. But pressure is building in Congress for higher standards, despite the nation’s addiction to gas-guzzling transport.
Obama, meanwhile, said his proposals would cut the nation’s oil consumption by 2.5 million barrels a day by 2020 and take the equivalent of 50 million cars worth of pollution out of the air. He would achieve his goals in part by targeting a 4 percent annual increase - approximately one mile per gallon each year - in fuel standards.
Obama billed his visit to Detroit as tough love. The applause was tepid at times, but the Democratic presidential candidate pressed on, saying the nation’s “oil addiction” is a threat to national security because it helps fund terrorism.
“For the sake of our security, our economy, our jobs and our planet, the age of oil must end in our time,” Obama told a Detroit Economic Club luncheon of about 2,000 people.
The speech was the latest in an ongoing series Obama has delivered in an effort to defuse concerns that he lacks enough national policy experience to be president. The trip, which included two fundraisers Monday evening, was his first visit to Michigan since he announced his presidential ambitions in February.
During the 30-minute speech, Obama acknowledged the political challenges of increasing fuel-economy standards, but suggested that Detroit should use the growing energy crisis to rebuild itself as a place of energy innovation.
“For years, while foreign competitors were investing in more fuel-efficient technology for their vehicles, American automakers were spending much of their time investing in bigger, faster cars,” he said. “Whenever an attempt was made to raise our fuel efficiency standards, the auto companies would lobby against it, spending millions to prevent the very reform that could’ve saved their industry.”
Obama said America has been left behind because it has lacked the political will to require greater fuel efficiency.
“While our fuel standards haven’t moved from 27.5 miles per gallon in two decades, both China and Japan have surpassed us, with Japanese cars now getting an average of 45 miles to the gallon,” he said.
Cars and light trucks - including SUVs, pickups and vans - account for about one-fifth of U.S. carbon dioxide production and experts believe global warming could be reduced through better fuel efficiency.
While the auto industry and its allies in Congress have successfully fended off efforts to increase fuel-economy standards for decades, political momentum recently has been building for stricter rules on gas mileage. The protracted war in Iraq has focused attention on the national security risks of dependence on foreign oil, while consumers also have been growing increasingly concerned about global warming and rising fuel prices.
The Senate Commerce Committee is scheduled consider legislation this week that would raise fuel economy standards for automakers. Several long-time allies, including oil and chemical companies, have broken with the auto industry and joined the call for stricter fuel efficiency rules.
Still, a spokeswoman for the trade association that represents major automakers asserted that Obama’s goal for fuel efficiency is “unattainable.”
“If you go that high with fuel economy, something else has to give,” said Gloria Berquist, a vice president for the Alliance of Automobile Manufacturers. “As a country, we might sacrifice jobs or safety or affordability.”
Obama and Sen. Hillary Rodham Clinton, D-N.Y., both in the Senate during a 2005 energy debate, voted differently on fuel efficiency standards. Obama backed increases, while Clinton opposed them. She voted against the bill because it had many oil industry incentives, while Obama backed it in part because it included language that would double demand for ethanol.
A Clinton spokesman said the senator supports increased fuel economy standards and that other Democrats voted the same way on the bill because of the oil industry incentives.
“Senator Clinton was trying to improve fuel economy standards by working to get the auto industry on board with a more comprehensive effort that also addressed the worsening economic conditions affecting the car manufacturers,” spokesman Phil Singer said. “Unfortunately, the auto industry did not join that effort.”
Democratic candidates have generally backed stricter fuel economy standards for automakers. In fact, former Sen. John Edwards of North Carolina has pressed for a faster timetable than Obama, saying that car manufacturers should be required meet a goal of producing vehicles that average 40 miles per gallon by 2016.
Even the Bush administration now favors stricter fuel economy standards. The Bush administration has proposed a 4 percent increase in gas mileage for each of the next 10 years.
But the Bush would give the White House control of the process through the National Highway Traffic Safety Administration, which could delay rules over economic and safety concerns.
After decades of opposing increases in fuel economy standards, the auto industry has softened its stand, saying it would agree to a level that is “technically feasible” without specifying a number. Bergquist said, “we think it should be based on objective criteria and not politically attractive numbers.” Bergquist called the 35 mpg standard advocated by Obama “unattainable” because consumers have largely rejected small, efficient vehicles in the past.
“That’s a very steep climb, and consumers may not choose to purchase fuel-efficient technology,” she said. “Consumers may favor passenger room, performance, and towing capability more than fuel economy.”
But Eli Hopson, a representative of the Union of Concerned Scientists’ clean vehicle program, said, “What’s good for America is good for Detroit,” and higher standards would force automakers to make their larger vehicles more efficient.
“They aren’t making a fuel efficient mini-van or highly fuel efficient SUV. The only fuel efficient vehicles they have now are small cars or some expensive luxury models,” Hopson said. Saying he was not indifferent to the economic pains being suffered by the industry, Obama also promised help for automakers. His plan would encourage them to make fuel-efficient, hybrid vehicles by using tax dollars to help cover the health care costs of their retirees.
Domestic automakers would get that assistance in exchange for investing 50 percent of the savings into technology to produce more fuel-efficient vehicles. In addition, Obama’s proposal would provide automakers with generous tax incentives for retooling assembly plants.
(Jill Zuckman contributed from Washington and Rick Popely from Chicago.)