IE 11 is not supported. For an optimal experience visit our site on another browser.

Bush tells auto leaders ‘tough choices’ ahead

President Bush told Detroit-based auto industry leaders on Tuesday that they had “tough choices” to make their companies competitive in a difficult global environment and promised a “continuing dialogue” between government and industry.
/ Source: msnbc.com news services

President Bush told U.S. auto industry leaders on Tuesday he recognized they had “tough choices” to make their companies competitive in a difficult global environment and promised a continuing dialogue between government and industry.

Bush, Vice President Dick Cheney and other administration officials met in the Oval Office for just over an hour with top executives of Ford, General Motors and DaimlerChrysler AG’s Chrysler Group.

The automakers later told reporters they’d had a good meeting. “The president clearly understands the importance of the business to the United States and the global economy,” said Ford Motor Co. Chief Executive Alan Mulally.

The auto executives said they pressed their concerns about health care and trade issues, while making clear that the troubled industry does not want a federal bailout.

“We found a lot in common,” said Bush, who met with the leaders just hours before he was to leave on a trip to Asia and a meeting in Vietnam with Asia-Pacific economic partners. The message he will give those partners, Bush said, is “just treat us like we treat you. ... Our markets are open for your products and we expect your markets to be open for ours, including our automobiles.”

“These leaders are making difficult decisions, tough choices to make sure that their companies are competitive in a global economy. And I’m confident that they’re making the right decisions,” Bush said of the U.S. executives.

The automakers made the case that Japan’s weakened yen makes imported goods from Japan cheaper and enhances profits Japanese automakers make in the U.S. On exchange rate policy, GM chairman and CEO Richard Wagoner said they discussed the automakers’ “strong conviction that the Japanese yen is systematically undervalued, which helps them to maintain significant trade balance surpluses in our industry.”

“I can’t honestly say it appears the president 100 percent saw it that way, but we had a good dialogue,” Wagoner said.

Tom LaSorda, president and chief executive officer of DaimlerChrysler AG’s Chrysler Group, said the automakers stressed that “specific issues like health care” aren’t limited to the automobile industry.

Wagoner said, “It was a very good dialogue, very open back and forth.”

The GM chief said the automakers told the president that by 2012, up to half of their vehicles could be capable of running on ethanol blends of up to 85 percent, known as E85. He said automakers would need assurances that the alternative fuel would be adequately available. Currently, only about 700 of the 170,000 gasoline stations nationally offer E85; most are in the Midwest.

The three automakers said earlier this year they would double their production of flexible-fuel vehicles by 2010.

On health care, Wagoner said they discussed the role of information technology in improving quality and reducing costs and said they would study high-cost, catastrophic cases that frequently drive up the cost of health care.

Bush cited a “mutual desire to reduce our dependance on imported oil.”

“And so we found a lot in common,” Bush said. “We’ll have a continuing dialogue that’s in our interest. In government we find out ways that we’ll be able to “work to make sure this industry is as vibrant and solid as possible. And, so it’s the beginning of a series of discussions we’ll have, not only with me, but with people in our government.”

The executives said they were not interested in a bailout similar to the 1979 measure approved by Congress that helped preserve Chrysler Corp. Instead, they said the focus should be on the spiraling costs manufacturers face on health care, the advantages Japanese automakers have because of a weak yen and their work to develop alternative fuel vehicles.

Asked of any interest in a federal bailout, Mulally said “absolutely not. Because we really believe that the actions starts with us, taking the actions that create a more competitive business going forward.”

All three automakers spend more on health care per vehicle than steel, which adds about $1,000 to the cost of a car built by the Big Three. GM, the nation’s largest private provider of health care, spent $5.3 billion on health care last year for 1.1 million employees, retirees and their dependents.

Wagoner urged Congress last summer to provide a “vigorous and robust” prescription drug market, develop national health information technology and focus on high-cost, catastrophic cases among a small number of patients.

Bush generated criticism in Michigan when he told The Wall Street Journal last January that automakers need to manufacture “a product that’s relevant.” Underscoring their work on advanced technology, Wagoner and Mulally arrived at the White House in hybrid vehicles produced by their companies.