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Automakers, Congress to discuss climate

From businessweek| March 15,2007

Confronted with congressional concerns about global warming, the leaders of the U.S. auto industry are highlighting their work to develop alternative vehicles and asserting that the burdens of climate change cannot fall to one industry alone.

The leaders of General Motors, Ford, Toyota and Chrysler were to make a rare joint appearance before a House subcommittee on Wednesday. The companies were noting that proposed increases in gas mileage standards for new vehicles would be extremely expensive and challenging.

A panel of the House Energy and Commerce Committee was to hear from Rick Wagoner, General Motors Corp.'s chairman and chief executive; Ford Motor Co. Chief Executive Alan Mulally; Toyota Motor Corp.'s North American President Jim Press; and Tom LaSorda, president and CEO of DaimlerChrysler AG's Chrysler Group.

United Auto Workers union president Ron Gettelfinger was also scheduled to testify.

Press, in remarks prepared for delivery to the hearing, noted that Toyota "has long been mindful of and accepts the broad scientific consensus that climate change is occurring and will continue unless there are significant and coordinated global efforts to slow the growth of man-made greenhouse gas emissions."

The Toyota executive said the auto industry "has a responsibility to be part of the solution, but these issues cannot be addressed by this industry alone."

Congress was hearing from the automakers at a time when many lawmakers are concerned about global warming and seeking ways to require more fuel efficiency in vehicles. The White House is targeting a 4 percent increase in fuel economy requirements and wants to change the way the rules are applied.

Some members of Congress view the auto industry as a logical place to begin tackling global warming and are wary of giving the government and industry too much flexibility in meeting higher standards.

Rep. Edward Markey, D-Mass., a leading proponent of higher gas mileage standards, outlined legislation Tuesday meant to increase the requirements by at least 4 percent every year for a fleetwide average of 35 miles per gallon by 2018 -- an improvement of about 10 mpg from current levels.

"This mandate has to be imposed on the manufacturers," Markey said.

GM, Ford and Chrysler have all announced layoffs and plant closings, and the industry is nervously eyeing an early, $100 billion-plus projected cost for raising the fuel economy standards under President Bush's plan.

Gettelfinger was expected to stress that raising fuel economy standards could lead to more costs and job losses. The UAW argues that any new efficiency requirements need to be coupled with tax incentives to encourage domestic production of advanced vehicles.

The executives are also expected to stress their work to diversify the fleet through hybrid and electric cars, vehicles running on diesel and ethanol and the development of hydrogen fuel cells.

Last year the leaders of GM, Ford and DaimlerChrysler said that by 2010 they would double production of "flexible fuel" vehicles, which can run on ethanol blends of 85 percent ethanol and 15 percent gasoline. They have a target of building 2 million of these vehicles a year by then, but note that less than 1 percent of the nation's 170,000 gas stations now offer E85, and most are found in the Midwest.

Rep. John Dingell, D-Mich., the committee's chairman, said Tuesday in a conference call with reporters that he was hopeful the Congress doesn't get stuck in "old-fashioned thinking" about increasing fuel economy standards. He said any legislation crafted to deal with global warming needs to be broad in its scope.

"We are not going to concentrate on one industry, one area or one part of the problem," Dingell said.


 

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