Special Coverage

Management Briefing Seminars

TRAVERSE CITY, MI – Just when auto makers thought they had put environmentally related policy-making behind them with last year’s increase in federal fuel-economy rules, it appears likely their visits to Washington have only just begun.

Industry insiders say auto makers must fully participate in the formation of new climate- change laws or risk becoming a target of lawmakers and regulators as they did with the new corporate average fuel economy rules contained in last year’s Energy Independence and Security Act.

Kim Hill, director-automotive communities at the Center for Automotive Research and co-chair of a Management Briefing Seminars sessions here on the industry’s role in the energy debate, calls the burden auto makers face with the new CAFE rules a result of years of perceived foot-dragging when it came to improving fleet fuel economy.

“Maybe it was payback time,” Hill says. “I’m not going to make a judgment on it, but it sure seems to be the case.”

Without the industry participating in the drafting of climate-change policy, Hill says consumers soon could find themselves driving a horse and buggy instead of the much-heralded Chevrolet Volt plug-in hybrid-electric vehicle from General Motors Corp.

“It is imperative the industry be part of that discussion,” Hill says.

Mike Stanton, president and CEO of the Association of International Automobile Manufacturers, agrees. Stanton says a total of 11 bills in Congress address climate change and that has led to political gridlock. Such a bottleneck opens the doors to regulators such as the Environmental Protection Agency, National Highway Traffic Safety Admin. and State of California.

“All of them want the same result, but they all have different ideas of how to get there,” he says.

Stanton says it appears unlikely the auto industry will find a voice in either presumptive presidential candidate. Sen. John McCain would like a CAFE standard of 40 mpg (5.9 L/100 km), while Senator Barack Obama has proposed 50 mpg (4.7 L/100 km)

“Neither candidate has been terribly supportive of (the auto industry) in the past,” he says. “It presents some challenges.”

Instead of fighting climate-change legislation, Stanton says, auto makers must recognize “we are part of the problem, so we need to be part of the solution.

“We know one thing,” he adds. “It is going to be a bumpy ride.”