Imports hold key to CAFE outcome

WASHINGTON -- The fuel economy ball is in the court of import-brand automakers.

Last week's stunning Senate vote for sharply higher fuel economy standards was a bitter defeat for the Detroit 3, which had lobbied heavily against the measure.

By contrast, the import brands -- which get credit for having better fuel-saving technology -- might have the credibility to slow congressional momentum for much tougher standards.

But they hesitate to use it. Import brands are likely to lobby for tweaks, but not major changes, to the Senate bill.

Senators lauded the Toyota Prius and other products as proof that automakers could boost fuel economy sharply. The lawmakers rarely acknowledged that import-brand automakers also oppose parts of a Senate-passed bill.

The bill's main provision, approved late Thursday, June 21, by a 65-27 vote, requires cars and light trucks to meet a combined average of 35 mpg by 2020. That's an increase of about 40 percent.

Mike Stanton, top lobbyist for the import-brand automakers, said late last week that his members plan to make judicious use of their lobbying clout.

Import brands' role

They will seek to ease some of the legislation's requirements in the House of Representatives. But they won't seek to defeat it, and they won't support a dramatic alternative.

Reaching 35 mpg by 2020 "is still very aggressive," said Stanton, president of the Association of International Automobile Manufacturers. Toyota, Honda, Nissan, and Hyundai are among the organization's 14 automakers.

"It's going to be an uphill battle" to keep an equally tough or tougher bill from being approved in the House, Stanton said.

In the House, the auto industry's allies will have fewer procedural tools to block measures than in the Senate. But the automakers, particularly the Detroit 3, still count on a longtime ally, Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee.

Dingell, in his 52nd year in Congress, wants to postpone consideration of fuel economy until the fall. He wants to incorporate the issue into broader legislation dealing with economy-wide limits on greenhouse gas emissions - such as from utilities and factories as well as vehicles.

But other House Democrats, led by Speaker Nancy Pelosi, D-Calif., are eager to do something bold about climate change. As the Senate proved, automakers are the prime target.

Last week the White House sent mixed signals on how President Bush would react if sent a bill like the one passed by the Senate.

Detroit 3 regroup

Despite the imports' growing influence, Honda executive Ed Cohen said it is wrong to put the onus entirely on import-brand automakers.

The Detroit 3 still employ lots of Americans, notes Cohen, vice president of government and industry relations for Honda North America Inc. "I would not count anybody out yet," he said.

Honda favors higher fuel economy standards, but will seek to soften the Senate bill. In the Senate, the Detroit 3 and Toyota backed an alternative bill calling for 36 mpg for cars by 2022 and 30 mpg for trucks by 2025.

A long-awaited floor fight and predictions of a close vote never materialized. On a voice vote, senators approved a slightly modified version of the measure requiring 35 mpg by 2020.

In a prepared statement, Ford Motor said "major changes" are needed in the Senate-passed bill to make its proposed standards achievable.

While Toyota is aligned with the Detroit 3, it did not mount an all-out lobbying push like General Motors, Ford Motor and the Chrysler group. Toyota did not send top executives to visit Congress, for example.

Toyota spokeswoman Martha Voss points out that Toyota executives were in Washington several weeks ago for meetings that included fuel economy.

In a sign of industry troubles, a promised statement from the Alliance of Automobile Manufacturers was not issued until mid-afternoon Friday, June 22. In the statement, alliance President Dave McCurdy said that his organization is "continuing to work constructively to develop reasonable fuel economy standards."

Sources say the group - which represents the Detroit 3, Toyota and five other automakers, struggled to reach consensus on how to react to the stinging Senate defeat.

You may e-mail Harry Stoffer at hstoffer@crain.com

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ENLARGE
Leslie Goldman, center, of A123 Systems shows Sens. Evan Bayh, D-Ind., left, and Harry Reid, D-Nev., a Ford Escape plug-in hybrid on Capitol Hill.
Photo credit: KEVIN DIETSCH/UPI/NEWSCOM


 

 

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