Levin Gears Up Mileage Proposal

By: Anthony Fontanelle

Amid pressure, automakers have chosen to back a less onerous compromise bill than the Senate proposal. Michigan Sen. Carl Levin earlier released the language of his 46-page bill to raise fuel economy mandates. Meanwhile, automakers are preparing to mount a grassroots effort to support Levin's proposal.

Today, General Motors Corp.'s vice president of sales, Mark LaNeve, will be on Capitol Hill to meet with its dealers. The Ford Motor Co. is sending its president of the Americas Mark Fields. On the other hand, the Chrysler Group will gather 14 plant executives including managers from Warren and Sterling Heights.

The compromise fuel proposal drafted by Sens. Levin, Mark Pryor D-Ark. and Kit Bond, R-Mo. is to raise fuel efficiency standards to a minimum of 36 miles per gallon for passenger cars by 2025 and 30 mpg for light trucks by 2022. At present, automakers must achieve 27.5 mpg for passenger cars and 22 mpg for light trucks.

Levin's proposal also would set temporary mandates that automakers must comply with soon after 2011. The bill would also vest the National Highway Traffic Safety Administration (NHTSA) the power to go beyond those criteria if it found that a higher requirement was 'feasible.' By contrast, the Senate energy bill would require automakers to meet a combined car and truck average of 35 mpg by 2020, followed by four percent increases each year.

Detroit automakers and the Toyota Motor Corp. have endorsed the less stringent compromise proposal after years of fighting higher standards. "It's is better than the current 'Burn the village to save it' approach the Senate bill has," said a Detroit auto executive.

On Thursday night, Chrysler CEO Tom LaSorda sent a letter to employees urging them to get in touch with lawmakers and air their support for Levin's proposal. "While it will be a stretch to meet the CAFE goals of the Levin-Bond Amendment, the impact of the proposed energy bill without the amendment would cripple our business. For the first five years alone, it's estimated to add up to a staggering $6,700, almost a 40 percent increase, to the cost of every Chrysler vehicle," LaSorda wrote.

The Alliance of Automobile Manufacturers, a trade group that represents Detroit's Big Three and Toyota, will begin an ad campaign this weekend asking Americans to support the compromise bill. "Tell your U.S. Senator to support the Pryor-Bond-Levin Amendment. It requires real, attainable oil savings through clean renewable fuels and advanced technology," the radio ad said.

On Friday, the alliance announced it had hired as a consultant former Missouri Sen. Jim Talent. Talent said that the bill would require automakers "to take these trucks off the market, people shouldn't kid themselves." Gloria Bergquist, an alliance spokeswoman, called the Senate energy bill a "wildy extreme CAFE requirement that simply can't be met. Chrysler's Colin McBean said that the company supports the Levin effort, even though it figures the company will have to spend $11.2 billion over five years to comply.

The heated debate between parties is expected to intensify - not even the efficient could put it to a halt. Senators in favor of a higher fuel economy standard argue that automakers have the technology to meet the higher standards. Sen. Bond stressed that the bill gave automakers no way of avoiding raising fuel economy standards. "We're setting a standard that we expect to be met. And we don't want people playing around with, 'Well, we can get out of it this way, we can get out of it that way,'" Bond said. "We're saying, you know, you got to meet them. End of story. No off ramp; just get the job done."

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