U.S. Auto Officials Back Plan on Renewable Energy Sources

WASHINGTON _ Leaders of Detroit’s automakers Thursday endorsed a plan to require one-fourth of U.S. energy supplies to come from ethanol and other renewable sources by 2025.

After a daylong canvass of Capitol Hill, heads of General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group said their meetings with Democratic and Republican congressional leaders was not a plea for government assistance to troubled companies but a chance to present their case on energy issues along with long-standing views on advantages they claim foreign automakers unfairly enjoy.

“We weren’t interested in coming and asking for help for the domestic auto industry,” GM Chairman Rick Wagoner said. “We were interested in talking about things that would improve the competitiveness of the U.S. economy, the competitiveness of the manufacturing sector and certainly the competitiveness of the auto sector.”

The executives had been scheduled to meet with President Bush, but that meeting was delayed. Another meeting scheduled for June 2 also has been postponed.

Ethanol and energy independence have become top priorities for the Bush administration and much of Congress in recent weeks, thanks to $3-a-gallon gasoline prices that show little sign of easing ahead of midterm elections.

The plan the automakers endorsed Thursday comes from the Energy Future Coalition, a nonpartisan collection of farming, environmental and other advocacy groups that has garnered backing from several governors, state legislators and members of Congress.

While there is no specific “25 by ’25″ bill on Capitol Hill, there are 40 proposals on ethanol and other renewable fuels floating around Congress. In recent days, much of the attention has focused on providing tax breaks and other incentives to expand production and distribution of E85, the mixture of 85 percent ethanol and 15 percent gasoline.

Of some 167,000 U.S. filling stations, only about 600 have ethanol pumps. Automakers say putting ethanol pumps in just 12,000 stations would put E85 within two miles of every major U.S. metropolitan area. Some ethanol advocates have accused the oil companies that control half of the U.S. filling stations of obstructing a competing product.

“The bottleneck is distribution, and we believe the government could be very helpful in incentivizing the distribution of ethanol,” said Ford Chairman Bill Ford.

Senate Majority Leader Bill Frist, R-Tenn., said the group discussed “the importance of energy independence being a long-term goal for this country,” and “how we through policy … can encourage and promote the use of ethanol.”

Congress’ attention to ethanol plays to the Detroit automakers’ strengths, after years of knocks for lagging behind foreign automakers in fuel economy and in rolling out gasoline-electric hybrids. GM, Ford and Chrysler have been building E85-capable vehicles for years due to credits in federal fuel economy rules that help offset the mileage of their largest SUVs and pickups.

Detroit automakers and Nissan have said they would build 700,000 vehicles this year that can run on E85, adding to about 4 million such vehicles on the road already. Environmentalists and some foreign automakers have criticized the system as a loophole, since few vehicles today run on E85. Toyota Motor Co. and Honda Motor Co. have said they could build ethanol-capable models if the market demands, but that there wasn’t enough E85 available to justify them.

Wagoner, Ford and Chrysler Group President Tom LaSorda said they barely discussed proposed increases in federal fuel economy rules, moves that Bush has touted but the domestic auto industry has traditionally opposed.

The House could vote soon on a bill allowing the administration to raise the fuel economy standards for passenger cars, but Sen. Debbie Stabenow, D-Mich., said she would be surprised if a similar bill passes in the Senate this year.

“We’ve got to be careful about diverting attention away from the best opportunity we have right now to address the high level of reliance on imports and that’s the ethanol option,” Wagoner said.

The executives and lawmakers said the other topics they discussed included health care, pension costs, trade and currency issues _ problems Detroit automakers have cited for years as creating an “unlevel playing field” with foreign competitors.

Detroit has long accused the Japanese government of artificially suppressing the value of the yen to make imports from Japan to the United States less expensive, a charge that foreign automakers contend doesn’t apply to their increasingly U.S.-made vehicles.

“The worst thing Congress or the White House could do is to unlevel the playing field which is presently level,” said Tim MacCarthy, president and CEO of the Association of International Automobile Manufacturers.

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