From: Corey Williams, Associated Press
Published May 8, 2007 12:00 AM

Obama Says U.S. Auto Industry Must Look to Fuel-Efficient Vehicles

DETROIT -- Democratic presidential candidate Barack Obama on Monday faulted U.S. automakers for failing to do what foreign manufacturers have accomplished in producing fuel-efficient vehicles.


Uttering words not often spoken in Detroit, Obama said U.S. energy policy must change in order to help domestic automakers answer the rising global demand for efficient autos.


"For years, while foreign competitors were investing in more fuel-efficient technology for their vehicles, American automakers were spending their time investing in bigger, faster cars," the Illinois senator told business and political leaders.


Obama said his plan encourages domestic automakers to make fuel-efficient hybrid vehicles by giving them health care assistance for retirees. Federal financial assistance would cover 10 percent -- up to $7 billion -- of automakers' annual legacy health care costs through 2017, under Obama's plan, which would require automakers to invest at least half of their health care savings into technology to produce fuel-efficient cars.


As a second choice, Obama's plan would provide $3 billion to automakers over 10 years to help retool plants to make fuel-efficient cars and trucks.


It's all part of the U.S. auto industry taking necessary steps to help its own turnaround, Obama said.


"Here in Detroit, three giants of American industry are hemorrhaging jobs and profits as foreign competitors answer the rising global demand for fuel-efficient cars," he said.


"The need to drastically change our energy policy is no longer a debatable proposition. It is not a question of whether, but how; not a question of if, but when. For the sake of our security, our economy, our jobs and our planet, the age of oil must end in our time."


A Senate committee on Tuesday is expected to consider a proposal to raise fuel efficiency requirements for automakers. The measure, which would require a fleetwide average of 35 miles per gallon for cars and trucks by 2020, comes amid calls to push the industry to produce more fuel-efficient vehicles to respond to global warming and America's growing reliance on foreign oil.


Obama said focusing on the cars Americans drive and fuels used would save 2.5 million barrels of oil per day.


"It starts with our cars, because if we truly hope to end the tyranny of oil, the nation must once again turn to Detroit for another great transformation," Obama said at the sold-out Detroit Economic Club meeting.


To start, his plan calls for raising American fuel economy standards by 4 percent each year, adding about one mile per gallon. Passenger cars currently must meet a fleetwide average of 27.5 miles per gallon, while the standard for SUVs, pickups and vans is 22.2 mpg.


The Bush administration has set a similar goal of increasing the standards by 4 percent each year.


"Our goal is not to destroy the industry, but to help bring it into the 21st century," Obama said. "So, if the auto industry is prepared to step up to its responsibilities, we should be prepared to help."


Separately, a portion of Obama's energy plan that would establish a national low-carbon fuel standard drew praise from Gov. Arnold Schwarzenegger, a Republican who has proposed a similar regulation in his state.


"Climate protection, energy security and economic well-being are not partisan issues, and I hope members of Congress on both sides of the aisle will support and help pass this important legislation," the California governor said in a statement.


Monday's visit was Obama's first campaign trip to Detroit. He was introduced by Detroit Mayor Kwame Kilpatrick.


Source: Associated Press


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