05-12-2001
LOBBYING: Auto Lobbyists Rev Up for Fuel Fight
As it gets ready to release a much anticipated report on national energy
strategy, the Bush Administration is sending mixed signals to automakers
on one of the industry's most important positions: opposition to new
mandates that would toughen fuel-economy standards.
Two weeks ago, auto lobbyists were relieved when Vice President Dick
Cheney's remarks on energy omitted any mention of raising vehicle
fuel-economy standards to help cut oil consumption. But on May 8, Cheney
said in a CNN interview that the Administration later this year might
consider tightening the standards, depending upon the conclusions of a
soon-to-be-published National Academy of Sciences study.
The White House's mixed signals followed other troubling news for the auto
companies. Five Senators-three Democrats and two Republicans-earlier this
month introduced a bill that by 2007 would require automakers to improve
the average fuel economy of all new light trucks, including sport utility
vehicles, by about 7 miles per gallon.
Sens. Dianne Feinstein, D-Calif., and Olympia Snowe, R-Maine, say their
bill to boost the corporate average fuel-economy, or CAFE, standards could
save the country 1 million barrels of oil per day, cut annual oil imports
by 10 percent, and prevent 240 million tons of carbon dioxide emissions
that contribute to global warming. (The bill's co-sponsors are Sens. Susan
Collins, R-Maine; Jack Reed, D-R.I.; and Charles E. Schumer,
D-N.Y.)
Auto companies are revving up their lobbying engines to stop the measure,
because light trucks account for almost half of all new-vehicle
sales.
"What they're proposing is totally impractical," says Robert G.
Liberatore, the chief Washington lobbyist for DaimlerChrysler Corp.
"It would decimate the auto industry and employment in it." He
says the industry regards the CAFE standards, first introduced in 1975, as
"a broken regulatory program that has terribly unfair
impacts."
Liberatore and other Chrysler lobbyists, along with their counterparts at
Ford Motor Co. and General Motors Corp., are strongly pressing their
opposition. Auto lobbyists have met with top staffers on the Bush
Administration's energy task force, including those who work for the
Commerce, Transportation, and Energy Secretaries. The task force report is
due for release on May 17. The lobbyists are also visiting Senate offices
to shore up support and win over other Senators. To drive home their
opposition, they are handing out a booklet that argues that tougher
standards will cost jobs and hurt the auto industry's overall financial
health.
Besides the Feinstein-Snowe proposal, Detroit is trying to slam the brakes
on other perceived threats. Auto lobbyists are worried about an omnibus
Democratic energy bill, introduced by Sen. Jeff Bingaman of New Mexico,
that includes a provision that could raise fuel-economy performance
through a more flexible approach. And the industry is increasingly
concerned about a possible Senate appropriations amendment that could hike
fuel-economy standards.
"I think we'll be fighting at least a three-front war before the
summer," says one outside lobbyist for a Big Three automaker.
"The companies are taking it very seriously."
On the other side, environmental and consumer groups will be battling to
raise the country's overall vehicle fuel efficiency, which has been
dropping for more than a decade. "President Bush proposes to drill
under the Arctic National Wildlife Refuge for a six-month fix of
oil," says Daniel Becker, the Sierra Club's director of energy policy
and global warming. "A vastly better alternative is to drill under
Detroit by making cars go farther for a gallon of gas."
Meanwhile, auto companies are playing offense on related issues. Industry
lobbyists have been working to ensure that the NAS study on CAFE will
bolster the opposition to tougher fuel-economy rules. And industry
representatives are prodding the Administration and Capitol Hill to grant
tax incentives to buyers of new hybrid vehicles, which use gasoline and
electricity to achieve much better fuel economy than traditional cars can
provide.
The Bush Administration's energy task force, which the industry has been
lobbying, is expected to back some tax incentives to spur development of
hybrid vehicles, Liberatore says.
"We think the Feinstein bill is premature," says Josephine
Cooper, president of the powerful Alliance of Automobile Manufacturers
Inc., whose 13 member companies employ 620,000 workers in 35 states. She
says that the alliance has "put a lot of time and effort into
informing the NAS group" that is writing the report, which is due out
in July. Auto companies call tax incentives "the way to go" to
improve fuel economy and lower pollution, she concludes.
As it girds for battle, the auto industry seems to have an inside track
with the Bush Administration. White House Chief of Staff Andrew H. Card
Jr. was General Motors' top Washington lobbyist before he went to work for
President Bush. During inaugural week in January, GM feted the incoming
Administration and Card in an elegant party on the roof of the Kennedy
Center.
President Bush tapped a longtime auto industry ally as Energy
Secretary-former Sen. Spencer Abraham, R-Mich. And just recently, the
White House legislative affairs office hired away another GM lobbyist,
Robert Marsh, after Card put in a good word for him.
In the past election cycle, the auto industry steered almost 80 percent of
its $17.7 million in contributions to Republican candidates in federal
races and to GOP committees, according to the Center for Responsive
Politics. For added protection, the Big Three automakers retain
heavy-hitting bipartisan lobbying firms, including the Duberstein Group,
Quinn Gillespie & Associates, Timmons and Co., and Washington Council
Ernst & Young.
Ironically, the automakers may have given their critics ammunition when
they promised last year to voluntarily improve fuel-economy standards for
SUVs by 2005 by 25 percent. Moreover, Ford, which has been staking out a
more pro-environment stance than its competitors, has drawn kudos from
some environmental groups for its recent statement that global warming is
a serious issue and that autos contribute significantly to the
problem.
Over the past five years, Detroit has fended off efforts to raise
fuel-efficiency standards by getting Congress to approve an annual
appropriations rider that barred the Transportation Department from
changing the CAFE rules. Last year, however, amid growing support for
raising CAFE standards, auto lobbyists agreed to a compromise that called
for the NAS study on the effectiveness of CAFE.
Auto lobbyists argue that no new legislation is warranted until the study
is published. But they also say they won't try this year to attach riders
on bills that would block DOT from considering new rules or approving
higher fuel standards for light trucks.
Currently, new light trucks must meet a 20.7 miles-per-gallon standard,
compared with a 27.5 mpg requirement for passenger cars. Because light
trucks account for almost one out of two new-vehicle sales, the difference
has caused overall U.S. vehicle fuel efficiency to drop since its peak in
the late 1980s.
The Feinstein-Snowe bill would require light trucks to gradually raise
their average fuel economy to 27.5 mpg by 2007. Vehicles that weigh up to
10,000 pounds would have to meet the new standard; the current weight
ceiling is 8,500 pounds.
If the bill gains traction, Liberatore says that the industry will launch
a lobbying and advertising blitz to increase the pressure on wavering
Senators. "Surely there will be grassroots efforts depending on how
serious this gets," he says. "There are hundreds of thousands of
people whose livelihoods depend on the auto industry."
At least one GOP strategist seems to relish the upcoming fight. "I
like the fact that many Democrats are promoting CAFE," says Ed
Gillespie of Quinn Gillespie, which represents Chrysler. "They're all
about rationing. The Democrats' approach to energy policy is an attack on
our quality of life."
The bill's backers are readying their own lobbying efforts. A coalition of
environmental groups that includes the Sierra Club and the Natural
Resources Defense Council is expected to start a seven-figure ad blitz
this month. The campaign will focus on ways to achieve savings in oil
consumption and other energy sources, including the need for
more-stringent vehicle fuel-economy standards.
Some environmental groups fret that the auto industry may have an edge
with the NAS panel that's doing the CAFE study. The panel, they note,
doesn't include any environmentalists, while it has a few members with
ties to the auto industry. They also point out that one of the primary
outside contractors for the study is Sierra Research Inc., a California
consultant that has done substantial work for the auto industry.
As they await the NAS study, the auto companies are pushing other parts of
their agenda. The industry wants tax incentives to bolster sales of hybrid
cars, an idea that several environmental groups have heartily endorsed.
Sen. Orrin G. Hatch, R-Utah, has offered a bill for that purpose, and it
has nine co-sponsors.
Some auto industry and other corporate lobbyists point out that the Hatch
bill favors hybrid designs from Ford, Honda, and Toyota, companies that
have all backed the bill. Some other automakers, such as DaimlerChrysler
and GM, are angling for incentives for their new hybrid models. Chrysler,
Ford, and GM are expected to introduce hybrid SUVs in 2003. Chrysler and
GM say they want to work with Hatch's staff to seek changes in the bill,
and Hatch's office has indicated that it is interested in gaining more
industry backing.
Environmental advocates say they are dismayed that the Bush Administration
has proposed a 30 percent cut in the budget of a Clinton
Administration-backed program in which the government and the auto
industry are teaming up to develop new energy-efficient vehicles. And many
environmentalists warn that Detroit's solutions aren't enough. Instead,
they argue that both tax incentives and new fuel-efficiency standards are
needed to address a host of energy problems.
Environmentalists believe that the auto industry is facing its toughest
challenge in years. "With talk of global warming, criticism of SUVs,
and rising gasoline prices, the auto industry is more concerned than it's
been in a long time about a bill like Feinstein's," says Clarence M.
Ditlow, the executive director of the Center for Auto Safety, an advocacy
group.
Peter H. Stone
National Journal
