Friday, June 06, 2008
Repair incentives for clean cars
Let's reward companies that build advanced technologies in America
by Ron Gettelfinger
Five years ago -- back when you could buy gas for $1.50 a gallon -- our union began advancing proposals for a more fuel-efficient U.S. auto industry.
Even when gas was less expensive and large-size pickups and SUVs were hot-selling vehicles, UAW members were working with other stakeholders in the auto industry to address long-range concerns about fuel economy and energy security. Consumer preferences and government regulation, after all, were bound to change in reaction to new environmental and economic challenges.
A brutal case in point is General Motors Corp.'s announcement this week that it will idle four large-vehicle plants, while adding shifts at two car factories. The economic dislocation for workers, families and communities caused by this reaction to shifts in the domestic market could have been ameliorated with better advance planning by industry, government and concerned citizens.
That's why, in 2003, when our union joined the broad-based Energy Future Coalition, we proposed a "Marshall Plan" for the U.S. auto industry. Our proposal centered around a retooling effort, with incentives for the manufacture of advanced technology vehicles and their key components here in the United States.
Incentives linked to production are crucial to creating an environmentally friendly auto industry that enhances our nation's manufacturing base. U.S. policy, which grants a tax credit to consumers who purchase gasoline-electric hybrid vehicles, does not take into account where those vehicles -- or their engines, batteries and other key components -- are produced.
That's a big mistake, because the U.S. auto industry is responsible for 13.3 million jobs -- nearly one out of 10 jobs in America.
Middle-class manufacturing jobs remain vital to the future of our economy -- which is why it's vital that the cars of the future be produced here.
Not all auto plants, however, are created equal. Fourteen companies now produce vehicles in the United States. But even after recent buyouts and voluntary retirements, it is still Chrysler, Ford and GM that provide the lion's share of U.S. auto employment
Because of the critical role that domestic auto companies play in the U.S. economy, the transition to a cleaner, greener transportation system must be carried out in an evenhanded manner. Last year -- with strong support from members of our union -- Congress passed the largest-ever increase in Corporate Average Fuel Economy regulations, requiring increases of up to 40 percent in fuel efficiency by 2020.
The U.S. Department of Transportation recently announced standards required by the new law, estimating that consumers will save $100 billion and that gasoline consumption could be reduced by 55 billion gallons. The good news comes with a price tag: $47 billion for automakers to comply with the new regulations. But this cost won't be distributed evenly.
Chrysler, Ford and GM will have to spend about $30 billion to comply with the new rules -- nearly two-thirds of the cost -- while all other automakers combined will pay just $17 billion.
It's unwise and unfair to impose an added burden on the domestic auto industry, which already suffers from years of unbalanced trade and health care policies. A well-designed incentive for the manufacture of advanced vehicles and components in the U.S. -- applied evenly to all automakers, domestic or foreign-based -- can help ease this cost burden. The concept was endorsed in December 2004 by the bipartisan National Commission on Energy Policy.
Last year's energy bill established a low-interest loan program to encourage production of advanced technology vehicles and their key components; now Congress has to appropriate money to make this program a reality. Even more important, the climate change legislation being debated this week in Congress includes a provision that would use a portion of the revenue created by the auction of carbon emission permits to fund a major retooling of the auto industry.
Providing public support for advanced automotive technologies was a good idea five years ago -- and it's an even better idea now. We don't have to compromise the economic strength of the auto industry to get more fuel efficient vehicles on the road. But we do have to plan ahead, because the future is already here.
Ron Gettelfinger is president of the UAW. This article first appeared on June 6, 2008, in The Detroit News. Reprinted with permission from the Detroit News.
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The views expressed by contributors to At Issue do not necessarily reflect the positions of the UAW.
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