TCS Daily


Private Promises, Public Priorities

By Duane D. Freese - April 15, 2004 12:00 AM

Michigan's Gov. Jennifer Granholm says that she has assurances from her party's standard bearer, John Kerry, that he won't pursue stiff fleet fuel economy standards on sports utility vehicles that would hurt Michigan's auto industry.

Explaining her endorsement of Kerry last month for Michigan's primary, Granholm told reporters that he'd told her privately that "he is not wedded to particular miles per gallon and wants to work with the auto manufacturers and do this in a cooperative fashion."

Having had a grandfather who worked in auto plants, a father who worked in Ford's glass house in Dearborn and worked myself as a warranty claims processor, I'd get it in writing.

It's true that Kerry has flip-flopped on another issue central to the auto economy -- the gasoline tax. Back in 1993, he supported a 50-cent a gallon hike, and he now publicly says he doesn't. Instead, he'd mortgage the nation's national security by foregoing replenishment of the national petroleum reserve to bring down prices that have increased far less than the hike he would have forced upon American consumers.

But in the case of CAFE, his remarks have been rather confusing. As The New York Times noted after Granholm made her remarks, "[T]he Kerry campaign Web site says 'we should increase our fuel economy standards to 36 miles per gallon by 2015,' and the senator's campaign staff said he was sticking to that number, which is similar to his Senate proposal."

Which Kerry do you believe?

Anyone who lived through Michigan's late 1970s and early 1980s, after CAFE was first introduced, shouldn't want a repeat. Flint became a CAFE wasteland. Downtown Detroit lost its Renaissance. Did the industry make mistakes? Sure. Lots. But federal CAFE mandates didn't help. They took away needed flexibility for how U.S. auto makers could produce and sell cars, nailing them to "fleet" averages they couldn't exceed.

Specialization and finding your niche is often the key to success in the market place. One strategy auto makers followed was to get young people into a cheap new car and then encourage them to buy up -- to the family size sedan and station wagon and then to a more luxurious vehicle. With CAFE crammed down the industry's throat it became a necessity to sell small in fierce competition with Japanese makers who specialized in it, while chopping off domestic auto makers' profit from high end, higher price vehicles, giving the Japanese an opening for sales there.

Michigan lost out as the Big Three had to push outsourcing from unionized Michigan to compete. As an editorial page editor in Battle Creek, I remember how that city desperately sought General Motors' Saturn plant, but the auto giant had to push that production south, to lower cost Tennessee, instead. Most of the foreign makers have their plants south of the Mason-Dixon Line as well, with Birmingham, Miss., now known as Detroit South.

It wasn't until SUVs and light trucks -- something Detroit definitely knows how to build -- became the rage of families looking for more space, freedom and safety that Michigan's economy rebounded. And still, overall U.S. automaker profits today amount to about $150 a vehicle -- the cost of an SUV's sideview mirror assembly. Yet, Kerry is taking aim at that.

In arguing for the CAFE bill he co-sponsored in 2002, he promised to fit the mileage increases into the industry's "production" schedules. "No one will have to drive a smaller car," he said then. "No one will have to give up their SUV," he promised. Why? Well, because, he said after having visited Nuvera Fuel Cells in Cambridge, Mass., "the technology is available today to meet the higher standard."

In fact, as most automotive experts know, the technology to raise fuel economy affordably without a loss of weight, performance and safety does not exist now. The industry, with support from the Bush administration, already is spending billions developing it, but it is many years away from being ready for the market.

Rep. John Dingell, D-Mich., opined to a reporter about Kerry: "It would be my hope that as president he would be much more friendly and solicitous of the well-being of the auto industry than his comments in the Senate would indicate."

That and a prayer are the only things Michigan may have going for it if Kerry is elected and doesn't change his mind on that issue. But it will have the rest of the nation as company if he doesn't change his tune on the rest of his energy agenda as well.

Duane Freese was an editorial writer for the Battle Creek Enquirer.


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