Monday 07 May 2007
White House hopeful Barack Obama on Monday rebuked giant US auto makers over gas-guzzling cars, warning they had themselves to blame for current woes after racing to build bigger, faster vehicles.
The Democratic senator traveled to the industry heartland in Detroit to warn America could no longer sustain bloated energy consumption, unveiling a plan to encourage auto companies to build more fuel-efficient cars.
"The auto industry's refusal to act for a long time has left it mired in a predicament for which there is no easy way out," Obama said.
"But 'expensive to do' is no longer an excuse for failure to do," Obama said, becoming the latest presidential candidate to call for energy policy reform.
Oil dependency corrupts emerging democracies, jeopardized US security and harms the planet, said Obama, vying with Senator Hillary Clinton for top billing in the Democratic White House field.
"For the sake of our security, our economy, our jobs and our planet, the age of oil must end in our time," he told the Detroit Economic Club, also noting that auto workers union has also resisted change.
"For years, while foreign competitors were investing in more fuel-efficient technology for their vehicles, American automakers were spending much of their time investing in bigger, faster cars."
The result was, Obama said, that while US cars typically averaged around 27.5 miles (44 kilometers) per gallon.
Japanese vehicles had surpassed American standards at an average of 45 miles (72 kilometers) to the gallon, he said.
He pledged to strike a bargain with auto manufacturers, by offering tax incentives to help them upgrade plants to produce more fuel-efficient vehicles and help defray healthcare costs for workers if firms invested in new age technology.
American consumers would also get tax breaks to encourage them to buy more fuel efficient, US-produced cars, he said.
Clinton Monday meanwhile campaigned in Obama's home town of Chicago, as a poll by the Rasmussen organization suggested she had recaptured her lead in the race.
The New York Senator had the support of 34 percent of likely Democratic voters, compared to Obama's 26 percent. The same organization reported on April 30 that Obama had a 32 to 30 percent lead in the race.
Clinton has proposed putting huge profits of oil firms into a strategic fund to invest in new kinds of energy and technologies.
Another top tier Democratic candidate, John Edwards, has call for investment in clean, renewable energy and bio fuels, and a new generation of efficient cars and trucks.
Even in Detroit, Obama Isn't Muffled
By Jennifer Hunter
The Chicago Sun-Times
Tuesday 08 May 2007
Detroit - It takes chutzpah to come here and criticize the main business of Motown - the auto industry - especially if you're a presidential candidate who may want the support of organized labor (or you may have shrugged and figured it's all going to John Edwards, anyway.)
But if you're going to puncture the story line that U.S. automakers have clung to ever since the 1973 oil crisis was banished to subliminal memory in the 1990s - that the car industry makes the kind of big, snappy vehicles Americans want and that labor costs keep them uncompetitive with the Japanese - you'd better do it out in the open in Detroit rather than in California.
Barack Obama said as much Monday as he spoke to members of the Economic Club of Detroit.
And there is no better place in this city to put a muzzle on those whiny carmaker stories than in the building where the annual Detroit Auto Show is held: Cobo Center.
Standing in one of the rooms in the center, Obama did not mince words when he said automakers need to be realistic about how they arrived at this nadir in their economic history while foreign carmakers flourished selling cars with superlative gas mileage.
"I know these are difficult times for automakers," Obama said, "and I know that not all of the industry's problems are of its own making. But we have to be honest about how we arrived at this point."
He later put it bluntly in a press conference: Carmakers need to be "yanked into the 21st century."
And, in his speech, he outlined ways to do this by making cars more fuel efficient, by giving the auto industry funds to retool, and by providing financial inducements for Americans to switch from gas guzzlers to more modest fuel imbibers.
Obama's speech was a step toward putting some more substance on his energy and economic policies.
Considering the crowd, he didn't draw cheers or bring anyone to their feet as his stump speeches often do. The audience was cordial and offered polite applause, nothing more.
The automakers have certainly heard the message about their gas guzzling creations before and have tried to respond in the past. But they haven't worked at it diligently.
'No easy way out' When Toyota unveiled its Corolla in the mid-1960s, American carmakers did not immediately follow suit.
It wasn't until the Carter administration, when the price of gasoline shot through the roof, that the U.S. industry responded with cars like the Pinto (which, unfortunately turned out to be a highway disaster).
And through all the decades since Japan became an automotive force, the Americans haven't figured out exactly what to do to compete. They've used Japanese assembly line methods; they've built smaller cars. And the Japanese continued to roll over them with better quality, more attractive vehicles. Now Toyota is the No. 1 carmaker in the world, surpassing the mighty General Motors.
Obama says American cars need to be much more fuel efficient, noting a Japanese car gets 45 miles to the gallon while U.S. cars only get 27.5 mpg - and that's a number U.S. cars have been coasting at for about two decades.
This is not just a problem for Detroit, Obama insisted, especially when one considers that one in 10 American jobs is related to the auto industry. It's a national problem, he said.
"Automakers continue to refuse to make the transition to fuel-efficient production because they say it's too expensive at a time when they're losing profits and struggling under the weight of massive health-care costs," Obama said.
"This time, they're actually right. The auto industry's refusal to act for so long has left it mired in a predicament for which there is no easy way out."
Here are some of Obama's proposals for reviving the moribund industry:
- Raise fuel standards by 4 percent a year. (Although, as one reporter noted, Michigan Sen. Carl Levin believes this will be the undoing of Chrysler Corp.)
- Provide tax incentives to help carmakers modernize their existing plants and build more fuel-efficient vehicles.
- Help defray the companies' horrendous health-care costs, but in return expect them to invest the savings back into the production of energy-saving cars.
- Expand the tax breaks for buying hybrids and ultra-efficient vehicles that use biofuels.
By transforming the cars we drive and the fuels we use, Americans could consume 2.5 million fewer barrels of oil per day and reduce pollution from 50 million cars by 2020.
Now that Obama is being chauffeured by the Secret Service, he unfortunately had to abandon his energy efficient Chevy Tahoe with flexible-fuel technology - it took ethanol or gasoline. Instead, he's being driven around in Secret Service gas guzzlers. It's something his aides say he is trying hard to change.
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