McCain: The Unknown for Detroit

February 25, 2008
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John McCain, the presumptive Republican presidential nominee, visited Detroit last week and met briefly with top executives from Ford, Chrysler and General Motors after touring a Ford plant outside of Detroit.

The meeting was an effort by the likes of Chrysler CEO Robert Nardelli and Ford's Alan Mulally to open up communication with a Presidential candidate who, if elected, is very likely to demand tougher fuel-economy standards and tighter emissions of carbon dioxide.

With Democratic candidates, Senators Barack Obama and Hilary Clinton, the automakers more or less know what's coming. The environmentalists will run the show, it’s presumed--or at least, the Environmental Protection Agency (EPA) will have a big voice in setting policy at the National Highway Transportation Safety Administration (NHTSA). Reversing the EPA decision in December, which nixed California's bid to control carbon dioxide emissions, will be a top priority should Obama or Clinton win in November.

The automakers fear and detest the California rules because they are much tougher and force change much faster than the federal fuel-economy standards approved in December, which raise the Corporate Average Fuel Economy (CAFE) requirement to 35 miles per gallon. The California rules represent the equivalent of a 43-miles-per-gallon fuel-economy standard that would force a radical downsizing of the vehicles that Californians and probably all Americans actually drive, according to calculations done by engineers at GM and other carmakers. Engineers working on engine projects also have also told the rules would require large reductions in horsepower.

Blocking the California rules, under a President Obama or a President Clinton, would probably be extremely difficult. The best they carmakers could hope for would be some moderation in the scheduling of specific rules.

However, on this particular issue, it is not altogether clear the outcome would be much different under a President McCain. In fact, for the automakers, supporting McCain is something of a crap shoot.

First, McCain has more or less endorsed the California position on carbon dioxide emissions and secondly there is every chance that the personnel that wind up running environmental policy in a McCain administration, will need the approval of California Governor Arnold Schwarzenegger. The Governor’s endorsement of McCain on the eve of the California primary cleared the Senator's path to the Republican nomination by putting the state out of reach of the decidedly pro-business and anti-regulation Mitt Romney.

But on environmental issues, Schwarzenegger has proven to be a whole lot closer to his Kennedy in-laws than he has to the Republican mainstream. Schwarzenegger, who famously told Detroit's executives to get up off their butts, also has vowed an all-out fight to reverse the ruling of the EPA.

General Motors chairman Rick Wagoner has already indicated that the automakers are deeply worried by what's coming when the next President takes office. In a recent speech to the National Automobile Dealers Association, Wagoner urged dealers to get involved in the fight to block individual states like California and New York from setting their own emission standards for carbon dioxide.

In his heart of political hearts, McCain seems to be a Federalist with little affinity for states’ rights. There are also plenty of bytes floating around on YouTube of McCain talking about global warming in which, if you close your eyes, he comes across sounding more or less like former Vice President Al Gore. He also has authored, with help from Joe Lieberman, the independent Senator from Connecticut, his own bill for fighting global warming, which actually is considered pretty tough by most independent observers.

The Arizona Senator also has consistently called for tougher fuel-economy standards and was one of the Senators that changed fuel economy from a strictly domestic policy issue into a national security issue. The change in the terms of the debate, coupled with rising fuel prices, left the automakers with no leverage in the fight against tougher fuel-economy standards.

McCain is clearly one of the most pro-regulation candidates to win the Republican nomination in nearly half a century. For Detroit, it's instructive to remember the President who signed the toughest environmental legislation to date wasn't John Kennedy or Lyndon Johnson--it was Richard Nixon.--Joe Szczesny

McCain tells Chris Wallace that global warming is linked to security:

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