Wagoner: Automakers Gain in CAFE Debate



Automakers are making some headway in the fight against radical changes in the federal fuel-economy regulations, says GM chairman and chief executive officer Richard Wagoner.

Wagoner said during an appearance at the Woodward Dream Cruise, that automakers are finally getting a fair hearing on Capitol Hill, particularly in the U.S. House of Representatives, which is expected to vote on legislation imposing new standards this fall.

"As we got into the House we were more effective," said Wagoner, who is now one of the industry's elder statesmen. "I felt there was a more balanced debate in the House," he said.

"We think the substantive reason is very simply we had something we could be 'for,' that was responsive to the issues that are clearly of concern. In the early stages of the Senate debate, we did not have an industry position on what we were for and some people viewed that as obstructionist. The lesson learned is that we need to, as an industry, get together and get behind something that responds to the issues," Wagoner said.

"If we do that we can get people behind us," added Wagoner, who noted the Hill-Terry bill, the alternative CAFE bill supported by the industry, now has over 100 sponsors in the House.

Automakers were shocked earlier this summer when an energy bill calling for tough fuel-economy standards was adopted overwhelmingly by the U.S. Senate despite some intense lobbying in recent months.

"I can't tell you it's over yet. Frankly it is a little disconcerting to continue to go down (toWashington) and find that most people's idea of an energy policy is to raise CAFE on cars and trucks," Wagoner added. "We did that in 1976 with the stated goal of reducing oil and reducing imported oil and we've got a great big 'F' on both categories. So why in the world would we think that's an energy strategy for 2007?

"We're willing to do our part. But don't for a second (fool) yourself. Higher CAFE will in no way, shape or form solve the energy (problem.) We need a much more comprehensive approach and, guess what, there is one that will work and let's do that in addition to the CAFE change," said Wagoner.

Wagoner also noted surveys showing consumers want better fuel economy are flawed because most of them don't get the vital follow-up questions beyond the obvious answer.


"By the way did they say in order to get that (higher fuel economy) you will have to buy a smaller vehicle and you will have to pay $3000 more for the vehicle?" he said. "We know the answers to these questions. We know people would like better fuel economy but we have a very good sense of where they're willing to trade off. The trade-off isn't zero. They are willing to make some trade-offs but we know that they are not willing to add $3000 to price and add 20 percent to the fuel economy," he said.

Politicians in Washington have persuaded their constituents that raising CAFE will effectively address the issue of imported oil without any real costs to consumers. "It's simply not true," Wagoner said. "We're willing to do our part. We're willing to spend a lot of money to do that and we can help fix this problem," he said.

"But let's fix the problem. Let's not play this parlor game we've been playing for 30 years," he said.

Wagoner, who indicated he favored boosting the use of alternative fuels, said one thing that needs to happen is for oil companies to provide ethanol pumps at every gas station in the U.S.


"Generally, I'm a free market guy. So I would say let's provide appropriate incentives, but eventually if it doesn't work, then I'd say we would have to have to look into that," Wagoner said.

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