Former auto allies endorse higher CAFE

hstoffer@crain.com

WASHINGTON — Two good ol' boys don't care much for a Senate bill that would boost fuel economy standards for cars and trucks.

“You think any of those people in Congress know the difference between a truck and a car?” one grouses. His buddy retorts: “I don't think they even know most folks out here drive a truck.”

A few years ago, commercials like this radio spot — broadcast by automakers in 11 states — would have scared off any swing-state lawmakers rash enough to support tougher CAFE standards.

Not anymore. Industry lobbyists are finding that they no longer can count on many lawmakers who once took their side. This week, the Senate will debate a bill that would mandate a steep increase in fuel economy.

The measure would require cars and trucks to achieve a combined average of 35 mpg by 2020, about 40 percent higher than the current figure.

It would force the auto industry to revamp future product lineups and overhaul business plans. The bill has attracted the support of environmental stalwarts such as Sen. Dianne Feinstein, D-Calif., while automakers call the bill extreme and urge its defeat.

Just a couple of years ago, such a proposal might have been buried in committee. Today it's too close to call.

Shrinking Big 3

To understand how the politics of CAFE have changed, consider the shifting loyalties of Sen. Tom Carper, D-Del.

Carper used to be a reliable vote when automakers lobbied against increases in fuel economy standards. But the Delaware Democrat publicly chastised the Detroit 3 CEOs last week for losing money and market share and for closing plants.

The normally soft-spoken Carper noted that automakers have faced only minimal increases in fuel economy mandates since the mid-1980s. The face-off came during a manufacturing conference organized by Senate Democrats.

For Carper, the sting is personal. The Chrysler group plans to close its Newark, Del., assembly plant in 2009. For a state of just 800,000 people, where Carper served as governor from 1993 to 2001, it's a big loss.

An industry study says Delaware has 30,000 auto-related jobs. General Motors operates an assembly plant in Wilmington.

Both advocates and opponents of the fuel economy bill are courting Carper and other swing-state senators.

Auto industry lobbyists are having “many conversations” with Carper and his staff, John Bozzella told Automotive News. Bozzella is DaimlerChrysler's vice president of public policy and external affairs for the Americas.

Do ads help or hurt?

Meanwhile, the Alliance of Automobile Manufacturers — which represents the Detroit 3, Toyota and five other automakers — has spent at least $1 million on its anti-CAFE ad campaign. (To hear the ads, go to autonews.com/cafeads.)

But the auto industry's lobbyists have failed to generate a groundswell of public opposition to CAFE. Last week Carper spokeswoman Emily Cunningham said the senator's staff was unaware of any calls to their office generated by the ads.

“He's definitely trending our way,” said environmental lobbyist Dan Becker, who directs the Sierra Club's global warming program.

Other swing-state senators also are making up their minds. Sen. Byron Dorgan, D-N.D., told the Detroit 3 CEOs at the manufacturing event that he has noticed the anti-CAFE ads in his state. He said he was offended by their scare tactics, such as suggesting that Congress wants to take away Americans' pickups.

Dorgan and Carper were among 62 senators who voted in 2002 for an industry-backed amendment that effectively killed a proposed increase of almost 50 percent in fuel economy standards.

This year Dorgan sponsored a bill that would mandate annual fuel-economy increases of 4 percent. Part of his bill is included in the Senate measure scheduled for debate this week.

Damage control

Last week Sen. Carl Levin, D-Mich., told reporters that he was still working on an alternative bill. A draft calls for fuel economy standards of 36 mpg for cars by 2022 and 30 mpg for trucks by 2025.

Those numbers are more acceptable to the industry. But Levin says even those targets would be a stretch for automakers.

This week members of the House Energy and Commerce Committee will consider a draft proposal that includes fuel economy provisions similar to the Levin alternative. Rep. Ed Markey, D-Mass., chairman of a special House climate change committee, vows to toughen the bill.

The first big fight in the House will be over an industry-backed provision that would deny California and 11 other states the ability to enforce their own greenhouse gas emission limits on cars and trucks.

Federal regulators should have sole jurisdiction over vehicle fuel economy, argues Rep. John Dingell, D-Mich., who chairs the House energy committee. But eight governors have signed a letter opposing the effort to limit California's authority to make environmental policy.

Lawmakers face intense pressure to act on energy security and global warming. The industry has abandoned hope that it can simply kill a tougher CAFE standard, as it did in 2002. Now it appears to be seeking a compromise.

Concedes Bozzella of DaimlerChrysler: “Everything is different.” c

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