The auto industry has been miscast as an environmental laggard, portrayed as fighting every step of the way when asked to reduce emissions. You would think the auto industry has done very little to improve the emissions of its vehicles.

But the record speaks for itself. Today's vehicles are 96% cleaner than those of the mid-'60s. In California, where there are very serious clean air concerns, vehicles will be more than 98% cleaner with the current rules. A new vehicle today, started cold and driven 30 miles (48 km) to work and back, will produce less pollution than a 1965 model car left parked in the driveway with the motor off!

I'm not saying that vehicles don't contribute to pollution; with about 185 million vehicles on the road, driving 2 trillion miles annually, even minute amounts of pollutants add up. However, we're working hard to further reduce emissions, and along the way we've managed to improve both the durability of our vehicles and our warranty coverage on emissions components.

The same can be said for new solutions to regulatory issues. For instance, we've offered an innovative program for the Northeast. The region recently asked EPA for a California-style clean air program. The auto industry volunteered a program that meets the same clean air requirements, at a much lower cost. This is good for the region and our customers.

Other voluntary efforts include partnerships with the government through the U.S. Council for Automotive Research (USCAR), where industry pools resources to meet technological challenges. Under USCAR is the Partnership for a New Generation of Vehicles (PNGV), the industry is teaming up with the Department of Energy and the national laboratories to develop vehicle technology to achieve up to three times the fuel efficiency of today's mid-size sedan without compromising price or utility.

For Chrysler's part, it has led the industry in alternative fuel vehicle sales with offerings of Compressed Natural Gas (CNG) vehicles, Electric Vehicles (EV) and Flexible Fuel Vehicles (FFV) that run on a blend of methanol and gasoline. In California, Chrysler was first to certify vehicles as a Low Emission Vehicle (LEV). Ultra Low Emission Vehicle (ULEV), and Zero Emission Vehicle (ZEV). We were the first major manufacturer to certify to the toughest Federal standard, the Inherently Low Emission Vehicle (ILEV).

Why, with all the industry has done, does it have such a bad image? Perhaps we can look to how the nation's regulatory process has developed. Rather than working together, industry and government have been placed in adversarial roles. The regulators' job has been to ask for too much, too soon, and it has been industry's job to say "too much, too soon," forcing mistrust between the two.

The long lead times of the industry contribute to this tension. Regulators work well into the future in setting rules, which are sometimes known as "technology-forcing" regulations. This means that when they are developed no one knows, with certainty, whether, when or how they can be reached ... or what they will cost. These regulations have a high level of risk to them, sometimes higher than auto manufacturers are willing to bear, since in the end they must deliver.

Regulators are less risk-averse, since they control the flexibility to adjust standards later (after much engineering effort is applied). There are cases where the risk was high, but we were able to pull it off. These have been added to the folklore as "Detroit complains, then does it." What is often overlooked is that an enabling technology came to the forefront during development. Many of the emissions success stories can be attributed to the stunning increases in computing power which provided software solutions to hardware concerns.

A good illustration of a high-risk regulation that hasn't worked is in California where a new type of "technology-forcing" regulation has mandated a sales volume of a specific technology -- the ZEV mandate. This mandate forces the seven major automobile manufacturers to produce electric vehicles, without any assurance that customers will want them. We have said that the key was a breakthrough high-performance, low-cost battery and that it would not be ready in time. California's own internal experts now agree and are re-examining the mandate.

To progress, the paradigms must change on both sides. This change already has begun, but must be accelerated. By working together, the auto industry and the regulators will better understand each other's needs, develop the most cost-effective solutions and set realistic performance-based standards. This way, we can fully meet the clean air needs of society at the lowest societal costs. We need to work diligently to build the trust between us and make the right decisions, to ensure that the domestic auto industry stays competitive in an increasingly tough global market.