Advocate Summary

Issue:  CAFÉ standards (107th)
Advocate:  General Motors – Mark L. Kemmer
Date of Interview: 6/17/02

Basic Background
The fuel economy program has been around for a number of years it goes back to 1975, was the original act and from the beginning of the program it was one, which while its intentions were good, to try to help the US address the level of gasoline consumption and oil imports into the country, it always had, in the way that it operated, some difficulties. The US manufactures when the program was first enacted were full line manufacturers we made everything from small vehicles to large vehicles but a lot of the competitors that we had especially the Japanese or Asian competitors, came into this country producing only small vehicles, or importing only small vehicles. So from the very beginning of the CAFÉ program it has had the undesirable consequence for us that it always impacted us, GM, Ford and Chrysler, more heavily than it has impacted a lot of our competitors and overtime it has given them opportunities to move upscale in their products, larger products luxury products, you know Honda came out with its Accura line, the Lexus line and the Infinity line and the other manufacturers’ product lines have come into play. They’ve emphasized a lot more performance in their vehicles then we’ve been able to because the existence of the CAFÉ program. So over the past 25, 26 years of the program it has really been a thorn in the side of the traditional big three manufacturers, seeming to ask of us things, that have not been asked of other manufacturers, that is we have to make changes to our products, we’ve had to downsize engines, downsize products, make a lot of changes to the vehicles that the other manufacturers have not. So we’ve had competitive problems associated with that. And as we’ve gone through that whole dimension of making changes to products, it has also put us in the position that at times we feel that we are at odds with our customers. With gas prices being as cheap as they are in the United States, fuel economy is not what most of our customers put high up on the list of attributes or characteristics of the vehicle that they are trying to – that they are looking at – when they make their vehicle purchase and so if we are being told by virtue of higher CAFÉ standards to emphasize this, make changes to your products, invest money add cost to your vehicles to improve the fuel economy of your vehicles and our customers are looking at that and saying, “that’s not what we’re interested in” you know. A few years ago, the thing that you saw companies advertising the most was cup holders, you know that was important to people, how many cup holders and where were they and were they convenient and later than that is was especially in pick up trucks and sport utility vehicles was the number of doors, pick up trucks started with just two doors and then we found a way to add a third one and then there were for, so you know those are the things and performance has always been important to US purchasers of vehicles. 
	So over the last half a dozen years, with concerns about oil supplies, and disruptions and prices have spiked two or three times a year in the US market as supplies have gotten tied up or somebody, you know one of the Persian Gulf countries, has withheld oil from market place for a period of time. There has been this growing pressure to do something about raising the CAFÉ standards again, and that’s what the debate has been this last year in the House and Senate consideration of a big energy bill, this is just a piece of the bigger package that they are taking a look at. The president has said we need to take a look at the energy policy of the US and the House and Senate both agreed and weighed right into to major energy bills to look at exploration of more oil, conservation, fuel economy, a whole array of topics. Technology how do you promote technology and get it into the market more efficiently and quickly. And so that’s been a big part of the debate; what do you do with CAFÉ standards, what could be done, what should be done with CAFÉ standards, and that’s were we’ve come in. 

A light truck is a specification of vehicles which includes pick up trucks up to a certain size, iit includes minivans it includes bigger vans up to like 12 passenger vans but no commercial vans, but full size cargo vans and most of the sport utility vehicles. The House bill wound up dealing with a provision that focused primarily on light trucks and that has been the big focus of the environmental community, that is that the light truck segment of the market place has been growing dramatically, last year for the first time ever, there were more light trucks sold in the United States than passenger cars and so they were concerned about the growth of that and particularly of sport utility vehicles within the light truck category. So the House bill dealt exclusively with light trucks, the Senate bill dealt with both light trucks and passenger cars. The regulations don’t apply to what are called medium duty, things like UPS trucks and on up and the big rigs are not covered. 

Prior Activity on the Issue 
See above.

Advocacy Activities Undertaken
We had interesting dynamics in both the House and the Senate. The House has not looked at CAFÉ for probably 15 years, it just hadn’t elevated itself to a subject of major debate and action in the House for that long over that time, the turn over in the House was so large there were probably two thirds of the House last year when they were doing their energy bill, that had never dealt with CAFÉ before, they had never debated it, they never had to vote on it, they never had to take any real action on it, they may have heard something about it, they may have known something about it, but they had never been involved in a debate on it, and so we had a huge campaign to undertake in order to get the message out, there were a lot of people that never had to vote on this before, they had no voting record they had no history on the issue. The Senate on the other hand over the last decade, several times this issue has been raised in the Senate, there has been advocates for higher CAFÉ that have pushed bills through certain committees gotten them on floor, so it has been the subject of significant debate in the Senate so we had a much better feel for where these members were, and so we just had to focus there on pulling together a coalition of a majority of votes, that would have enabled us to deflect higher CAFÉ numbers and stay as closely as we could to our alternative strategy. And so the House campaign wound up being one of a lot of the basics, you know what is CAFÉ, what has been the history of CAFÉ, we had to repeat for a lot of those folks, and provide materials for a lot of the representatives in the House that covered everything I just laid out for you. In the Senate it wasn’t that way because so many people were well advanced in the basics of CAFÉ and they may have had a fairly well developed position on what they thought was good or bad about the program, and so in that case it became one more of targeting certain members, and obviously the ones in the Senate that we feel most comfortable going to talk to are the ones that have automotive assembly plants or supplier plants in their state, they tend to be more responsive to the arguments because you have a greater chance of real jobs being effected for them and so that really covers a lot of the Midwest, some of the West Coast and a lot of the supplier plants are down in the South. And in the House again, it was a question of trying to pull together a very broad resource base, getting our suppliers involved in reaching out to members they knew, dealers – they understand that this effects their livelihood so they got very much involved, calling upon our own internal company resources, letting retirees know, stockholders know, the employees know what’s going on. During break times trying to get various members of congress when they are in the states to come visit the plants so that we get our plant managers and our union representatives talking to them and explaining the concerns that we’ve got. So it became a very broad based activity. There is another coalition that exists, the Coalition for Vehicle Choice, which is a very broad group of some of the organizations I just mentioned, there are auto companies are in it, the suppliers are in it, the dealers are in it, but it also includes some of the safety organizations that are concerned about highway safety and some of the consumer groups like, the Snowmobile Association, because these are people that trailer snowmobiles, boats and that sort of thing, and they are concerned about continuing to have vehicles that are able to tow a trailer, so that they can go and have their recreation activities, the recreation industry has been involved in this as well. So we’ve tried to be as creative and broad – reaching out to other groups, as we could be and helping them to understand the possible implication for them or their membership from what was being considered. The UAW, the United Auto Workers worked with some of the other unions to make sure that they understood what the concern was about potential job impact from this. 

We have folks that are the senior engineers for the company or the product planners that we depend upon for hearings, or briefings of staff or members, we bring in exports from back in Detroit. Because we think we’re pretty good here in Washington, but there’s nothing better than somebody that’s got in his title that he’s the head engineer for general motors and he knows what he’s talking about in Engineering, so you try to supplement the message you are trying to deliver. 

Future Advocacy Activities Planned
No specific activities mentioned.

Key Congressional Contact(s)/Champions
In the Senate we worked very closely with Senator Levin from Michigan and when it got to the point where we needed an amendment on CAFÉ to be offered on the Senate Floor Levin (D) worked with Senator Bond (R) from Missouri, Missouri is a big light truck producing state in the US and Michigan is the number one auto producing state, and Missouri is the number two light truck producing state in the country so they were two logical people to come together to take the lead for us on this. In the House we worked very closely with John Dingell (D) a representative from Michigan and Billy Tauzin (R) who is the chairman of the House Energy Committee, we worked very closely with them and a number of other members but those are the ones that were kind of carrying the issue through the subcommittee, full committee process onto the floor.

Targets of Direct Lobbying
Certainly the committees with jurisdiction over the CAFÉ issue we have to spend a lot of time working on in the House that’s the Energy and Commerce Committee and what is in the House Energy Bill on CAFÉ was created by that committee and then worked its way through the final big energy bill. In the Senate, the jurisdiction for energy and CAFÉ is interesting, it’s split; the Energy and Natural Resources Committee has jurisdiction over most things energy, but the Senate Commerce Committee has jurisdiction over the CAFÉ program specifically. So there were both of those committees that we had to work. And actually how it turned out, Senator Dashel didn’t like the way the Senate Energy Bill was moving through the Senate Energy Committee because there were votes in that committee to go ahead and put in a provision that would have opened up Anwar up for oil exploration, and he didn’t want that to happen he wanted when the bill to come up on the Senate floor not to include that, so he pulled the bill out of the committee and he just fashioned something apart from the committee process, the Energy committee provided some input but they didn’t report a bill out, the Commerce committee provided input on CAFÉ but they didn’t report a bill out, and other committees, Ways & Means and some others and all of those pieces were just put together and put on the calendar and that’s how the bill came up in the Senate. It was a very interesting process, it really bypassed the normal routine that you go through in which to get a major piece of legislation to either the House or Senate floor, if you go back and look at the debate that took place over 6 or 7 weeks in the Senate the Republicans complained bitterly about the fact that they weren’t able to offer their amendments in committee mark ups because there weren’t committee mark ups, they just pulled the bill together and dumped it out on the floor, and they whole thing had to be sorted out on the floor. It was kind of an ugly mess at times. 

Targets of Grassroots Lobbying
None mentioned.

Coalition Partners: Names/Participants
There is another coalition that exists, the Coalition for Vehicle Choice, which is a very broad group of some of the organizations I just mentioned, there are auto companies are in it, the suppliers are in it, the dealers are in it, but it also includes some of the safety organizations that are concerned about highway safety and some of the consumer groups like, the Snowmobile Association, because these are people that trailer snowmobiles, boats and that sort of thing, and they are concerned about continuing to have vehicles that are able to tow a trailer, so that they can go and have their recreation activities, the recreation industry has been involved in this as well. So we’ve tried to be as creative and broad – reaching out to other groups, as we could be and helping them to understand the possible implication for them or their membership from what was being considered. The UAW, the United Auto Workers worked with some of the other unions to make sure that they understood what the concern was about potential job impact from this.

Other Participants in the Issue Debate
The regulation apply to imported cars, but we produce more and we’ve always been more full line. We’ve been across the board from small to big, whereas some other the other manufacturers have focused on more small and over time, Toyota used to be a small car import company, and they aren’t anymore, if you look at the offerings for Toyota now it makes them similar to the offerings of a GM or a Ford or Chrysler, they aren’t as big as we are they don’t sell as many vehicles as we do in the United States but they types of vehicles they offer are similar. And so over time, years back in the CAFÉ debate, it was the big three that had a concern about CAFÉ, and the Japanese companies had the potential of benefiting from CAFÉ. Well over time Toyota is in the position where higher CAFÉ is going to adversely affect them too. So all of the major auto producers in the world except for a few are part of the Alliance of Automobile Manufacturers and they are based here in Washington DC. And the Alliance which represents Toyota, Volkswagon, and Nissan, it doesn’t include Honda, were all opposed to the proposals that were going to dramatically increase fuel economy standards. So the industry over time, they got bigger and heavier we’ve gotten smaller and lighter, and we’re getting closer and closer to the middle, so the potential for all of us being adversely impacted has increased. So the whole industry pretty much hangs together now in its concern about higher CAFÉ standards. 

Ubiquitous Argument(s) and Evidence
We still see ourselves as being in a situation where once you start doing something to increase the CAFÉ standards you have the potential of renewing or increasing the competitive advantages and disadvantages of some manufacturers versus other manufacturers. You have the potential of putting us further at odds with our customers. You have the potential of putting US jobs at risk, because we make most of our products here, but a lot of the other manufacturers import their products. So putting US jobs at risk to the advantage of foreign jobs. And another issues has been, one of the prime ways that you go about increasing the fuel efficiency of vehicles is to make them smaller and lighter, and as you do that, physics tells you that a smaller lighter vehicle is not going to be as safe for the occupants of that vehicle as something that is heavier and larger. And so those are really the four major concerns that we’ve raised to people we’ve talked to about it; competitive impacts, potential job impacts, the possible customer problems we might have and the safety consequences of driving smaller and lighter vehicles. And our goal is pretty simple, we don’t think that the CAFÉ regulation gets at the problem that needs to be addressed. We are all working on advanced technologies for vehicles, hybrid vehicles, fuel cells for vehicles alternative fuels for vehicles, we are looking at getting into the market place as quickly as we can better technology and different kinds of technology that can help reduce gasoline consumption and US petroleum dependence. Café isn’t going to get us there so we are trying to keep the CAFÉ standards from going up dramatically and at the same time help people to understand “hey we’re serious about this problem” we are working on an alternative solution which is to get these technologies developed get them into products and get them into the market place as quickly as possible.  Those are the four main argument areas. 

Secondary Argument(s) and Evidence
None mentioned. 

Targeted Arguments, Targets, and Evidence
None mentioned.

Nature of the Opposition
The primary opposition was driven by the environmental groups.
There were a number of major environmental groups, the Sierra Club and the Natural Resources Defense Council, the NRDC, ACEE, and the Union of Concerned Scientists, those are probably the core organizations but there are many many many that they reach out to, and they probably have a name like this, of the names of environmental groups that were working on or supportive of what they were doing. There were coalitions on both sides of the issue that pulled together. 

Ubiquitous Argument(s) and Evidence Articulated by the Opposition 
They raise concerns about US dependence on oil and the amount of oil that the US burns which creates CO2 which is a greenhouse gas and there is concern about whether man-made creation of greenhouse gases, worldwide not just in the US, but worldwide, is getting sufficiently great that it is going to effect climate, overtime down the road. So they take on the argument from that perspective which is that we use too much we are too dependent on unstable sources and we are creating gases in the atmosphere as developed countries that could threaten the climate and the future environment for generations to come. So that the point of view that they brought into the debate. There were groups like the Union of Concerned Scientists and the American Council for Energy Efficient Economy which are really environmental groups with a different name, but they have engineering types in their ranks that make the argument that the technology is just there, that the companies are not choosing to use it. That the technology is there that could significantly increase the efficiency of sport utility vehicles. That’s really the poster child right now, the growth in the sport utility vehicle market. People that are buying those vehicles and using them primarily for commuter or personal transportation vehicles, rather than for their utility capabilities, and that really gets to the environmental community. You know that they make it sound like we’re making people buy these things, we offer products and they buy what they want to buy, but they make it sound like we’re kind of forcing these on the people and it really is bothering them that there are so many of these larger sport utility vehicles out there that are not being used for work purposes or off road reasons or that sort of thing, they are just being used for personal transportation and commuting. 

The environmentalist focus has changed a number of times over the years. In the early stages of the CAFÉ program it was dependence on foreign oil and the potential of supply disruptions and high prices because it was projected in the early stages of CAFÉ that oil prices were going to go up to 2.50 3 dollars a gallon and of course they didn’t they went up but then came back down in the 80s to less than a dollar a gallon, and so they started out with an oil dependence concern and then they tried a concern over the security of our supplies, no they started out with an oil shortage mentality, then they moved to a security of supply mentality and in the last several years it’s been kind of a greenhouse gas/ global climate change focus, so they’ve got a variety of arguments and they try which ever ones seems to be the one that they get the most credibility with at the time that they are making the case. If we have service men in Afganistan or in Kuate or it whatever, it depends on where we are militarily at a given point in time, they might get a big resonance from a concern about the fact that we have our young men in harms way defending our oil supplies, you know aren’t we bad Americans because we use so much oil. So we have to be prepared to deal with that, all of those. And we have to be prepared to deal with their assertion that the technology is just out there it’s just easy. You know there were probably for the first 15 years of the CAFÉ debate there was this belief that the companies had a one hundred mile per gallon carburetor tucked away in a vault somewhere in Detroit and just were unwilling to put it on the product. Now, why any one company would have a technology like that and to go out and beat the brains out of its competition by putting that into its product and would not do that, never made any sense to me. So this business that there’s all this technology out there and the companies are just unwilling to make use of it well, this is a very competitive business, why would anyone have that kind of technology and not try to get it into products if they could get a competitive advantage out of it, its because it’s not there. 

Secondary Argument(s) and Evidence Articulated by the Opposition
Not secondary but have changed see above.

Targeted Argument(s) and Evidence Articulated by the Opposition (and Targets)
None mentioned.
 
Described as a Partisan Issue

Venue(s) of Activity
House Energy and Commerce Committee
Senate Energy and Natural Resources Committee 
Senate Commerce Committee 

Action Pending or Taken by Relevant Decision Makers

Policy Objective(s) and Support for/Opposition to the Status Quo
Working to block any significant increases in CAFÉ standards, support status quo. 

Advocate’s Experience: Tenure in Current Job/Previous Experience
I’ve been with GM for 28 years, and I’ve been here for almost 24 years now, I started with GM’s energy section back in Detroit. Right out of college.  

Reliance on Research: In-House/External (Code for Organizational Advocates Only)
We do it both ways, we certainly work with the think tanks and other organizations in helping them or encouraging them to create their own pieces. You know, Heritage will do its own piece, a negative piece on CAFÉ or AEI, or Competitive Enterprise Institute and they are third party pieces and so those are great because there are constituents that those folks reach out to that understand they way they write things, and the point of view they’re taking. It isn’t the auto industry saying it, it’s a third party economic person or whatever that has looked at this and said this is a problem. But we do a lot of our own too, we take the data of what we are working on, the technologies we are working on and we package those up to give to folks on the Hill.  The Auto Alliance, does that for the industry collectively so we get some pieces a lot of times that are more, not just a GM point of view but an auto industry point of view. You have to slice and dice these things from as many different perspectives as you can think of in order to get to the various people you are trying to influence.

Number of Individuals Involved in Advocacy (Code for Organizational Advocates Only)
Six

Units in Organization Involved in Public Affairs/Policy (Code for Organizational Advocates Only)
In our office here we have a half a dozen lobbyists, that have various issue area responsibilities, mine happens to be Energy so the major energy issues are the ones that I keep track of, CAFÉ is obviously one of them, climate change is another, alternative fuels the technology development work fits into that category so I work on those, and then we have other people that work on budget and tax, and health care issues, and transportation issues and so we divide up the pie of issues among us and then in addition to us here there is a public policy staff in Detroit that we can turn to that includes legal capabilities, economics, people that can go talk to the engineering community inside of GM about questions about technologies like can it do this or not do this and cost and all that kind of thing, so we work very closely with people who are working on our future product plans, our current product plans our researchers that are working on a various technologies and all the staffs, economic, legal and all the rest of them are part of the process. 
We have a couple of folks here that are Washington based that deal with the Washington based media, and then a bunch bigger communications staff that deals with a whole array of issues for us and knows the media very well. And we do very well with some publications and some reporters and we don’t do very well with others, the New York Times tends to be pretty critical of the auto industry and the Detroit papers and the Chicago Trib tend to be highly supportive of the industry. 

Advocate’s Outstanding Skills/Assets (Code for Organizational Advocates Only)

Type of Membership: None, Institutions, Individuals, Both (Code for Organizational Advocates Only)

Membership Size (Code for Organizational Advocates Only)

Organizational Age (Code for Organizational Advocates Only)

Miscellaneous

Noted there was a Harvard Case study done on the CAFÉ debate back in 90-91.