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Automakers say other industries should help on climate


DETROIT (Reuters) - With stricter U.S. rules in place to sharply improve gas mileage and reduce tailpipe emissions, domestic automakers now want Washington to look elsewhere for help in achieving climate change goals.

By John Crawley

DETROIT (Reuters) - With stricter U.S. rules in place to sharply improve gas mileage and reduce tailpipe emissions, domestic automakers now want Washington to look elsewhere for help in achieving climate change goals.

Senior company and trade group executives interviewed this week at the North American International Auto Show believe they did enough in the 2007 energy legislation and now want lawmakers and regulators to tap other industries.

They declined to name the industries but environmentalists said fuel producers and utilities needed to be on the list.


Carmakers are lobbying Congress to approve incentives worth billions to help them retool their businesses and develop or improve fuel and battery technologies. These investments, industry says, will underpin its ability to meet the new requirement to improve fuel efficiency by 40 percent by 2020.

Struggling General Motors Corp, Ford Motor Co and Chrysler would benefit substantially from government investment that could help them compete against overseas rivals much better positioned on efficiency, like Toyota Motor Corp and Honda Motor Co.

House Energy and Commerce Committee Chairman John Dingell, a Michigan Democrat, told reporters on Tuesday at the auto show that he wants to draft a climate bill as soon as possible and believes carmakers have gone far enough.

"We've had everybody else get practically a free ride and the auto industry has come up with a 40 percent increase in fuel efficiency. We'll try and see that the pain is shared evenly all around," Dingell said.

Dave McCurdy, chief executive of trade group representing major companies, agreed: "The challenge should be for Congress to look at other sectors of the economy."

Prospects are mixed that the House of Representatives and Senate will be able to finalize a climate bill in an election year. The White House opposes mandatory curbs of greenhouse gasses, arguing such steps would harm the economy.

Dingell said Congress would also consider helping U.S. automakers meet the tougher efficiency standards, but could not say if any proposals would be in his climate bill.

Automakers have said meeting the target would be costly for them and consumers. The requirements will add, on average, $6,000 to the price of GM vehicles sold in the United States, the automaker's vice chairman Bob Lutz said on Tuesday.

Potentially adding more costs and new uncertainty would be if California prevailed in its legal fight with the Environmental Protection Agency to impose its own emissions standards, a plan that would result in even more stringent mileage targets.

Dingell said U.S. carmakers could implode if that measure eventually clears the courts and regulators and is adopted by all states, a scenario he called worst case.

While campaigning for Michigan primary votes at the auto show, Republican presidential candidate Sen. John McCain of Arizona said a bill he backs would offer billions in incentives for car companies, especially beleaguered Detroit giants.

"There is a need for pure research and development funding from the federal government for hybrids and hydrogen and other areas -- pure research and development. So we intend to go back and try to help them," McCain said.

Sen. Thomas Carper, a Delaware Democrat also at the auto show, told reporters it was not enough for Congress to say to Detroit: "Eat your spinach."

"We've got to help them develop new battery technology, help them use the government's purchasing power to commercialize new technologies," Carper said.

Michigan Democrat, Sen. Debbie Stabenow, said in an interview she wants to activate a low interest loan program and free up hundreds of millions of dollars for battery research.

Jim Press, who helped make Toyota the leader in hybrid technology before becoming co-president of Chrysler last year, said in an interview with Reuters the new fuel standards were not going away and it was up to industry to respond.

"The main thing we need to do is help ourselves," Press said. "We will meet them or exceed them with the best technology."

(Additional reporting by Jui Chakravorty Das. Reporting by John Crawley, Editing by Julie Vorman and Peter Bohan)