Automakers Find Few Allies in Latest Fight

Posted January 24, 2007 at 6:54pm

Car companies are buckling up for a bumpy ride this Congress.

In his State of the Union address, President Bush called for reforms to fuel economy standards and said he wants to mandate more alternative fuels. Meanwhile, corporations ranging from airlines to investment firms have thrown their lobbying support behind upping fuel standards, known as corporate average fuel economy or CAFE standards, leaving some auto lobbyists looking for ways to share the grief beyond their similarly situated, sometime foe: big oil.

“Companies are openly throwing us under the bus,” said one auto industry lobbyist for a domestic company. “This time, it’s the cut-and-run club with every industry trying to save itself. You see industries suggesting remedies that hurt other industries.”

As the CAFE fight begins to take shape, this lobbyist, only half jokingly, suggested automakers might propose that airlines comply with CAFE. “I think what you’re seeing is a potential pissing contest between these different sides,” said one longtime business lobbyist. “One side is pointing the finger at the other side. There are a lot of different splits over this.”

The Energy Security Leadership Council, which includes FedEx, Southwest Airlines, Dow Chemical, Goldman Sachs and Waste Management, is urging tougher fuel economy standards for cars and heavy trucks — a move that some auto representatives see as an attack. But Robert Hormats, vice chairman of Goldman Sachs, said the effort was not an affront to either auto or oil companies.

“Our objective is not to do this over the heads or around the backs of the auto or oil companies, but really a way to work with them,” Hormats said. “We would like to see them be a part of the solution. As the president has suggested by addressing this issue, public opinion is swinging heavily in favor of tougher fuel standards, and I think the companies can play a very constructive role in this process.”

But according to several auto lobbyists, Hormats’ group has not reached out to most, if any, auto companies.

Greg Martin, Washington director of communications for General Motors, said that “for the aviation industry to call for increased CAFE standards, well, it seems pretty expedient. They have absolutely nothing invested in that” because the standards don’t apply.

Martin, who helped show Speaker Nancy Pelosi (D-Calif.) and House Energy and Commerce Chairman John Dingell (D-Mich.) around the Washington Auto Show on Wednesday, added, “Ultimately, we believe that CAFE’s not the answer, but if we have to contend with CAFE, at a minimum we will have to make sure there’s flexibility to the program.”

At the auto show, Dingell and Pelosi checked out the Chevy Volt, an electronic vehicle, Martin said. “We’re interested in working with groups that see the potential in using other energy sources rather than reverting to decades-old policies like CAFE,” Martin said.

When it comes to the president’s energy proposals, even automakers with some of the most fuel-efficient cars called it “ambitious.” Jo Cooper, Toyota’s top lobbyist, said in a statement that her company supports the “direction of these goals” but would work with the administration and Congress to “find viable solutions.”

Charles Territo, director of communications for the Auto Alliance, which represents domestic and foreign companies, said his group supports bringing more alternative fuels to market. “Manufacturers believe that the best way to achieve energy independence and enhance energy security is by offering a wide range of diverse automobiles that are powered by diverse fuels,” he said.

On CAFE standards, Martha Voss, a Toyota representative in Washington, D.C., said her company supports Congress giving authority to the National Highway Traffic Safety Administration to reform the CAFE structure, but does not “support Congress setting the standard.”

Another auto company lobbyist, who is a Democrat, said the CAFE debate was “going to be tough” on car companies, especially when corporate-backed groups like the Energy Security Leadership Council, which also includes former military officials, get behind it. “These aren’t left-wing groups who are calling for tough CAFE standards,” this lobbyist said.