Automotive News - February 11, 2008 - (Page 3) FEBRUARY 11, 2008 • 3 Next president may be tougher on industry A.J. SISCO/UPI/NEWSCOM AP/WIDE WORLD PHOTO Top 3 candidates hint at activism on global warming Harry Stoffer hstoffer@crain.com Issue brief Where the leading presidential candidates stand on auto-related issues MORE AUTO/POLITICS NEWS 26 UAW chief lashes out at GOP ➤ States may not get pollution clout ➤ 62 Bill Clinton eased off on industry ➤ 62 Ex-NHTSA boss is GOP long shot ➤ 88 line. That would encourage more motorists to buy fuel-efficient vehicles, Stanton says. Some proposals would plow billions of dollars from the sale of permits into industry investments in building fuel-efficient cars and trucks. “I’m an optimist,” Stanton says. New climate controls could provide “an opportunity” for automakers, he says. WASHINGTON — The auto industry faces the likelihood that the next president will work to cap greenhouse gas emissions as a means of combating global warming. Such a ceiling could force automakers to boost vehicle fuel economy beyond tough new standards. It also could require car companies to cut factory emissions and to limit emissions from vehicle air conditioning. The three leading candidates for president — Republican Sen. John McCain of Arizona and Democratic Sens. Hillary Clinton of New York and Barack Obama of Illinois — all favor a mandatory emissions cap that would affect all sectors of the economy. All want the United States to be part of a global agreement to combat climate change. ‘Vigorous’ rule making Suppliers face “a much more vigorous regulatory environment,” says Ann Wilson, senior vice president of government affairs for the Motor & Equipment Manufacturers Association. The group’s 700 members include many original-equipment suppliers. The next president’s appointees will write regulations to enforce provisions of the new fuel economy law. Those rules could increase the law’s impact on the industry, Wilson says. Political analysts predict the next Congress will have larger Democratic majorities. So a legislative brake on a more activist administration is unlikely, industry leaders say. McCain chaired the Senate Commerce Committee in 2000, when Congress passed the vehicle and tire safety law known as the TREAD Act. The law responded to failures of Firestone tires and related crashes of Ford Motor Co. vehicles. It included potential criminal penalties for company executives. Cody Lusk, president of the American International Automobile Dealers Association, says that “obviously the tone is going to change” in the White House next year. AIADA represents 11,000 U.S. import-brand dealers. Lusk says presidential campaign rhetoric has included “a lot of anticorporate sentiment.” Dealers and other industry leaders, he says, must educate the next administration about their contributions to the economy and society. c Support state rules The candidates also say they would allow states to enforce their own vehicle greenhouse gas rules. The industry argues that such enforcement is a federal duty. Some industry officials believe a move to the White House would curb each candidate’s eagerness to cede federal power to the states. President Bush has resisted mandatory greenhouse gas controls and has rejected state rules. Only recently has he endorsed a new international accord. Hillary Clinton On capping and reducing greenhouse gases Favors Favors On fuel economy Favored 35 mgp by 2020, wants 55 mpg by 2030 On trade Wants “time out” on new trade agreements, reworking of old deals Barack Obama Favors John McCain Favored 35 mgp by 2020, wants 50 mpg by 2025 Favored 35 mpg by 2020, says he would negotiate with industry on future increases “Free-trader”; calls for better retraining of displaced workers Favors Emphasizes cost control, expanding market for private insurance Wants to add conditions to future agreements, renegotiate NAFTA Upside to upstream When a new president takes office next January, automakers, suppliers and dealers can expect more federal regulation of all kinds, industry leaders say. A new law raises vehicle fuel economy standards by 40 percent, to 35 mpg by 2020. Some industry executives argue the law should immunize automakers from new demands for emissions cuts. But not all are convinced it will. The law likely is just “a step in a direction,” says Mike Stanton, presi- On permanent repeal of the estate tax Opposes Opposes On health care Would require universal health insurance, subsidized by employers and government Source: Campaigns Would require insurance for children and set up public plan for all uninsured Americans dent of the Association of International Automobile Manufacturers. The group represents Toyota, Honda, Nissan and 11 other import-brand automakers. Stanton argues, however, that a cap-and-trade program aimed at curbing greenhouse gases that covers the entire economy could benefit the auto industry. Under such a program, government would issue or sell emissions permits to factories, refineries and utilities. Those permits could be traded. Proponents say the market for permits would stimulate development of cost-effective technologies for emissions control. A cap-and-trade program imposed “upstream” on fuel providers also likely would raise the price of gaso- New CAFE law opens the door to industry surprises Harry Stoffer hstoffer@crain.com WASHINGTON — The nation’s new fuel economy law could have unintended effects on vehicle design and safety, industry analysts say. And some industry executives suggest that more automakers may choose to pay penalties for breaking the law rather than build vehicles the companies fear customers may reject. One example of unintended consequence: The law’s milder standards for “work trucks” open a loophole through which automakers can drive an array of big, luxurious pickups, says environmental activist John DeCicco. “Manufacturers have proven adept” at exploiting legal definitions, says DeCicco, a longtime student of the corporate average fuel economy impact on occupant safety. The CAFE law seeks to boost overall fuel economy of cars and light trucks 40 percent by 2020, to an industry average of 35 mpg. The F-250 King Ranch — touted by Ford for its luxury — could catch a break as a work truck under the new law. program, or CAFE. Analysts identify other possible unanticipated outcomes of the CAFE law passed late last year: Automakers may take advantage of planned sliding scales for fuel economy targets by pushing wheels out to vehicles’ far corners to qualify for softer regulations. Although the law aims to encourage higher mpg through new technology, automakers instead could rely on cutting vehicle weight to meet standards, with a possible negative A break for work trucks In a concession to the industry, Congress created a category of work trucks eligible for easier standards. Such trucks generally are pickups with a gross weight of at least 8,500 pounds and payloads of at least three-quarters of a ton. Many trucks already on the road meet that definition, but some of them are more fashion statements than work vehicles, says DeCicco, a senior fellow in automotive strategies at Environmental Defense, a nonprofit advocacy group. DeCicco didn’t name names. But Ford, for example, touts the luxury of its 2008 F-250 Super Duty with King Ranch trim. The incentive of relaxed fuel economy standards for work trucks will encourage the industry to build more high-end pickups, he says. The first federal fuel economy law, enacted in 1975, had much tougher standards for cars than for trucks. The different treatment spawned new classes of vehicles: minivans, SUVs and crossovers. Many consumers were unhappy with scaled-down and underpowered, if more efficient, cars. So the industry responded with vehicles that met the loose legal definition of trucks and qualified for the milder see CAFE, Page 83
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.