Democratic-controlled Washington stepped in to help save Chrysler nearly 30 years ago when the automaker was on the verge of bankruptcy due to lackluster sales of its fuel-thirsty vehicles.
With the Big Three struggling again, many political leaders now are taking Detroit to task for failing to do more to reduce how much gas their vehicles use. The Democratic presidential candidates are pledging tougher gas mileage rules. Automakers say such changes would hurt an industry already down.
But the political climate is turning against the companies. Concern is increasing about global warming. Pump prices are high. People are worried about U.S. dependence on oil from the Middle East.
Kepign up with foreign automakers
"We're talking about saving the auto industry from itself," said Sen. Chris Dodd, who is proposing the highest increase of any presidential candidate.
Dodd, D-Conn., wants to double the average fuel economy for each automaker, from about 24 miles to per gallon today to 50 mpg by 2017.
"The industry just digs its heels in to fight any of these changes, but it's hard to maintain a very sympathetic ear when you realize that other (foreign) automakers are moving" in the direction of more fuel-efficient vehicles and "devouring market share in the country," Dodd said in a telephone interview. "Why aren't we doing this?"
Other Democratic candidates have talked about mileage increases, too:
- New Mexico Gov. Bill Richardson, a former energy secretary, also wants to reach 50 mpg, but his deadline would be three years later than Dodd's. Richardson plans to offer details of his proposal Thursday.
- Former North Carolina Sen. John Edwards wants 40 mpg by 2016. He has urged his audiences to consider sacrificing their gas-guzzling vehicles for the good of the country. In a campaign line that he uses often and that wins applause, the 2004 vice presidential nominee says, "It's time for Americans to be patriotic about something other than war."
- New York Sen. Hillary Rodham Clinton plans to announce her proposal for increasing fuel economy in the coming weeks. Clinton spokesman Phil Singer noted that in the past she has supported increasing fuel efficiency by 10 mpg over the next decade.
- At a speech last Monday at the Detroit Economic Club, Illinois Sen. Barack Obama lectured automakers on their home turf for investing in bigger, faster cars while dependency on oil is jeopardizing U.S. security and the global environment.
Making what Americans want
"The auto industry is on a path that is unsustainable for their business, for their workers, and for America, and America must take action to make it right," Obama said. "That's why my first proposal will require automakers to meet higher fuel standards and produce more fuel-efficient cars, while providing them the flexibility and assistance to do it."
Obama's speech irritated industry officials. They say the sentiment he expressed - while shared by other political leaders - ignores the reality that they are making the vehicles that people in the United States want to buy: Cars and trucks with big engines, towing capacity and room for passengers.
Dave McCurdy, a former Democratic congressman from Oklahoma who recently took over as president of the Alliance of Automobile Manufacturers, said Obama's presentation was "great campaign speak."
Gambling the company
"A politician talks about, 'Well we're going to help you and my pollster says this and my interest group says this,'" McCurdy said. "The executive has to make a cold, calculated decision about whether he's betting the future of his company on a technology that may or may not be there because the consumer will decide what they want to buy."
McCurdy said overhauling a vehicle's engine and powertrain takes about seven years and between $6 billion and $10 billion per manufacturer. "If you're in companies that are losing money because of market distortions and other decisions made in the past, that's a big gamble," he said.
Obama's proposal would require an increase in fuel economy standards of 4 percent each year. The government could stop the increases if it determined they were technologically unachievable, a threat to safety, or were not cost-effective. Environmentalists oppose that provision, saying it could derail progress.
Dodd criticized it, too.
"There are so many loopholes in it, you could drive a Humvee through it," Dodd said of Obama's plan. "If that's what we adopt, you will not get anywhere near the standards we are talking about. It's not going to happen, I promise you."
Obama's campaign says he is trying to reach a middle ground that will set aggressive goals while taking into an account factors that would reduce the rate of progress.
"This debate has been stuck in neutral for 20 years," said Obama spokesman, Bill Burton. "The bipartisan legislation Obama worked to produce has changed the politics of this issue."
Edwards would have no exceptions to reaching the fleet-wide standard of 40 mpg, said his spokesman, Eric Schultz.
This past week, a Senate committee approved a plan that would raise the nationwide fleet fuel economy to an average of 35 mpg by 2020.
Auto executives have said they support an increase in government standards, as long it is determined by experts at the National Highway Traffic Safety Administration.
They appear to have a more sympathetic ear among Republican presidential candidates, including Arizona Sen. John McCain. McCain has voted for some fuel economy increases in the past, but says he would negotiate with automakers on the appropriate increase if he were president.
"I'm not prepared to name a certain number," McCain said in a recent interview with The Associated Press. "I'm hopeful that the marketplace itself and the sale of hybrid cars - the (Toyota) Prius, electric cars - would address this issue in an effective fashion."
Former Massachusetts Gov. Mitt Romney opposes increasing the standards without taking other steps that include increased use of alternatives fuels such as ethanol and biodiesel and the development of hybrid technologies, said his campaign spokesman, Kevin Madden.
Sen. Sam Brownback, R-Kan., has voted against increased standards in the past, but said the threat of U.S. dependence on foreign oil has him so concerned that he would consider changing his position. He said an increase couldn't be so steep that it would endanger the U.S. auto industry while it is at financial risk.