Tie auto industry loans to fuel standards

The Associated Press
Published: September 12, 2008

WASHINGTON: Environmental and consumer groups said Thursday that funding for a federal loan program to help the U.S. auto industry should have some strings attached — in the form of higher fuel efficiency standards.
Consumer watchdog Public Citizen and several environmental groups called the support a "bailout" and in exchange for the loans, urged Congress to push the industry to meet higher fuel economy standards beyond requirements approved last year of at least 35 miles per gallon by 2020.
"The industry created the mess it's in now, and did it while laughing all the way to the bank. It's time for these companies to give back to the American people," said Joan Claybrook, president of Public Citizen.
"Are we getting the oil savings and global warming pollution reductions that we need? Those are critical issues," said Ann Mesnikoff, director of the Sierra Club's clean cars campaign.
The auto industry wants to secure up to $50 billion in government loans over three years to help it modernize its plants and develop more fuel-efficient vehicles. Congress authorized $25 billion in loans in last year's energy bill but hasn't funded the program.

General Motors Corp., Ford Motor Co. and Chrysler LLC have been working to secure funding for the loans after months of tight credit markets, tepid sales and high gasoline prices. Industry leaders say the loans are not a government bailout because it would speed up production of fuel-efficient vehicles and reduce dependence on imported oil.
GM spokesman Greg Martin said the loan program was "explicitly tied to getting more fuel efficient vehicles on the road quicker."
Members of Michigan's congressional delegation discussed the loans Thursday with industry officials and auto executives who participated by conference call, including GM Chairman and CEO Rick Wagoner, who was testifying Friday at a Senate energy summit. Ron Gettelfinger, president of the United Auto Workers, also participated on the call.
"There's a concerted bipartisan effort to make this happen," said Republican Rep. Dave Camp.