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Posted by: David Kiley on March 26, 2007
I dropped into the White House today for the photo opp session with President Bush, GM CEO Rick Wagoner, Ford CEO Alan Mulally and Chrysler CEO Tom Lasorda.
The four, plus the Transportation and Energy Secretaries, talked about how the Big Three were working to raise fuel efficiency in their vehicles through technology. GM had a Flex-Fuel Impala on hand. Ford had a plug-in hybrid that has a battery and a fuel cell. And Chrysler brought a bio-diesel Grand Cherokee.
It was all nonsense. The common theme in all the rhetoric, no matter who was talking, was “less dependency on foreign oil.”
All three CEOs know, and have said privately, that the easiest, best way to get there is to levy a gasoline tax, and simultaneously pass an off-setting income tax break to middle and low income consumers to make it revenue neutral to them. In fact, according to one well placed source with knowledge of the discussion between the CEOs and the President today, the six attendees addressed this issue as the fastest, smartest way to arrive at dramatic increases in fuel economy. The President, however, immediately dismissed it on political grounds. Got that. Political grounds.
It’s the right idea, but it can’t be sold to the public. That was the answer from on high.
Former Senator Bill Bradley points out in his new book that we have all the technology we need to get America to an average fuel economy of over 40 mpg. Europe has already achieved it. And the last time I checked, GM, Chrysler and Ford sell vehicles in Europe. IN other words, we already possess the technology to dramatically increase our national fuel economy.
I thought it was ironic that VP Cheney was present at the outdoor photo opp. Remember it was Cheney, as well as former Defense Secretary Don Rumsfeld, who referred to “Old Europe” when France didn’t join the Coalition of Willing to fight in Iraq. “Old Europe” has an average fuel economy above 40 mpg.
The problem, the pols say, is two fold. Even if they pass an income tax cut that offsets the gas tax for low and middle-income people, the “optics” or the “headline” of a $1.00 a gallon gas tax would not be accepted by the public. It wouldn’t be understood, say the pols. But worse for the GOP, the states where the pickup truck and SUV culture is strongest are red states.
But don’t get the idea this is just a GOP problem. Democratic Congressman John Dingell, whose district includes The Big Three and the heart of the United Auto Workers, and who chairs the committee that will initiate any legislation about fuel economy, isn’t proposing the gas tax/tax cut solution either. Why? The UAW continues to ride a hobby-horse that they will lose tends of thousands more jobs if we move to hike the fuel economy of our fleet to European standards. Profit margins are lower on cars than they are on trucks. And by necessity, Big Three automakers would have to build more cars in low-wage places like Mexico and South America.
Something tell me that legislation would be more likely if the chairman of the commitee was from Rhode Island or New Jersey rather than Michigan.
It is so cynical to even think that the American people wouldn’t move to change their vehicle purchases if someone took the lead to change the national conversation about energy; not just schedule photo opps.
There remains a shocking, demoralizing lack of leadership on this issue. As one fatigued White House press pool photographer quipped today…”If they showed us a car that ran on bullsh*t, the cars in this town would never have to stop for gas at a filling station.”
Want the straight scoop on the auto industry? Detroit bureau chief David Welch , Dexter Roberts and Ian Rowley bring daily scoop, keen observations and provocative perspective on the auto business from around the globe. Read their take on such weighty issues as Detroit’s attempt at a comeback, Toyota’s quest for dominance and the search for an efficient car.