Senator: CAFE hike could kill Chrysler

Harry Stoffer | Automotive News / May 4, 2007 - 8:53 am / WASHINGTON -- A U.S. senator from Michigan is vowing to filibuster fuel economy legislation that he says discriminates against the Detroit 3 automakers.

Democrat Carl Levin made the remark to reporters outside a Senate Commerce Committee hearing Thursday on a bill that would raise fuel economy standards by 10 mpg over 10 years.

Levin said that if a law required each automaker to sell a fleet of vehicles averaging 35 mpg, it would be unfair to those that sell more trucks and bigger vehicles, namely the Detroit 3. And he said such a requirement would put the Chrysler group out of business.

A filibuster enables a minority of the 100 members of the Senate to keep a measure from coming to a vote even if a majority is prepared to pass it.

Levin and the prime sponsor of the bill, Sen. Dianne Feinstein, D-Calif., have agreed on an alternative proposal that would have all vehicles sold by the industry average 35 mpg by 2019. Some companies could be higher and some could be lower, based on fleet mix.

The commerce committee, however, is going to consider a somewhat different bill when it votes on fuel economy legislation on Tuesday, May 8.

Sen. Daniel Inouye, D-Hawaii, committee chairman, announced at the end of Thursday's hearing that senators and staffs have been consulting behind the scenes and intend to merge elements of various fuel economy bills that have been introduced this year.

The new measure was to be distributed to interested parties late Friday.

The goal will be the same: A significant jump in corporate average fuel economy standards, or CAFE.

Such measures have been soundly and repeatedly defeated over the years, but sentiment has been shifting. Lawmakers say they are worried both about the security of energy supplies and about greenhouse gas emissions from cars and trucks.

Sen. Tom Carper, D-Del., said during the hearing that Detroit 3 warnings about losing money, losing market share, closing plants and laying off workers don't work any more. They did all those things even without higher fuel economy standards.

Now, "we listen to those arguments with a bit of skepticism," said Carper, whose tiny state has General Motors and Chrysler assembly plants.

Automaker witnesses echoed recent comments from other industry leaders on government's escalating interest in reducing petroleum consumption and cutting greenhouse gas emissions:

They said that automakers, already more regulated than other sectors of the economy, have been making big investments in advanced technology to reduce emissions in the future and want to contribute to solutions. But car companies alone should not be expected to solve the global warming problem.

Dave McCurdy, president of the Alliance of Automobile Manufacturers, also said the alliance "opposes legislation that is not technologically feasible." And it opposes standards "that are not based on a balance of objective criteria."

McCurdy said Feinstein's bill effectively would require by 2019 that cars average almost 40 mpg and that light trucks average nearly 32 mpg. Existing standards are 27.5 mpg for cars and 22.2 mpg for trucks.

He said the added costs, especially for trucks, would be hard on small business and trades people, farmers and others who rely on the vehicles for their livelihoods.

Mike Stanton, president of the Association of International Automobile Manufacturers, said car companies should have a minimum of three years to prepare for expected, more stringent increases in standards.

Federal law provides 18 months of lead time. For example, regulators had to give notice by April 1, 2006, for an increase in the light truck standard taking effect in the 2008 model year, which begins officially on Oct. 1, 2007.

AIAM's 14 automaker-members include Honda, Toyota, Nissan and Hyundai.

The alliance represents the Detroit 3, Toyota and five other automakers.

Levin told the committee the Detroit 3 "compete against countries," not just other automakers. He said other countries manipulate currencies, pay for health care, fund r&d and otherwise back their manufacturers.

Instead of incremental increases in CAFE that do little to reduce global greenhouse gas emissions, the U.S. focus should be instead on "leap-ahead technology," he said.