Obama says GM, Chrysler must ‘build cars of the future’

Wednesday, April 22, 2009

Obama says GM, Chrysler must ‘build cars of the future’

David Shepardson / Detroit News Washington Bureau

Washington — President Barack Obama said today the government must create incentives for Americans to drive fuel-efficient cars, while pledging to regulate tailpipe emissions.

"We must create the incentives for companies to develop the next generation of clean energy vehicles — and for Americans to drive them," Obama said at a speech in Iowa, according to an advanced copy made available by the White House.

He didn’t discuss the status of talks with General Motors Corp. and Chrysler LLC, but his chief of staff, Rahm Emanuel, and chief economic adviser Larry Summers met with Democratic members of Michigan’s congressional delegation for more than an hour today at the White House.

"Right now, two of America’s iconic automakers are considering their future and facing difficult challenges. But one thing we know is that for automakers to succeed in the future, these companies need to build the cars of the future," Obama said.

"Yet, for decades, fuel economy — and fuel economy standards — have stagnated, leaving American consumers vulnerable to the ebb and flow of gas prices, and leaving the American economy ever more dependent on the supply of foreign oil."

Last week, the Environmental Protection Agency declared carbon dioxide and five other gases dangerous to human health because of their contribution to global climate change. It pledged to regulate tailpipe emissions unless Congress acts to set standards. In April 2007, the Supreme Court said the EPA had the authority under the Clean Air Act to regulate carbon emissions.

"Last week, in response to the U.S. Supreme Court, the EPA determined that carbon dioxide and other tailpipe emissions are harmful to the health and well-being of our people," Obama said. "There is no question that we have to regulate carbon pollution; the only question is how we do so."

Obama wants to set a limit on greenhouse gas emissions.

"We would set a cap on all of the carbon dioxide and other greenhouse gases that our economy is allowed to produce in total, combining the emissions from cars and trucks, coal-fired power plants, energy-intensive industries and other sources," Obama said. "By setting a cap, carbon pollution would become like a commodity. It would have a value as a limited resource. To determine that value, much like any other traded commodity, we’d create a market where companies could buy and sell the right to produce a certain amount. In this way, a company can determine for itself whether it makes sense to spend the money to become cleaner or more efficient, or to spend the money on a certain amount of allowable pollution."

At the White House today, Detroit’s Big Three automakers showed off energy-efficient vehicles.

The Obama administration said this month it would purchase 17,600 advanced technology vehicles, including 2,500 hybrids with $285 million in stimulus funds.

"My administration has begun to put in place higher fuel economy standards for the first time since the mid-1980s — so our cars will get better mileage, saving drivers money and spurring companies to develop more innovative products," Obama said.

But consumers aren’t buying hybrids and small cars with $2-a-gallon gasoline, prompting some auto executives to favor a gas tax increase.

The White House said technologies eligible to be funded include a number of light and heavy-duty vehicles, including hybrid, plug-in electric hybrid, hydraulic hybrid, electric, fuel cell and compressed natural gas vehicles.

Maryland Gov. Martin O’Malley said the state had accelerated its purchase of hybrid buses with stimulus funds. Last year, he pledged to convert the entire Maryland Transit Administration bus fleet to hybrid-electric buses by 2014.

Maryland has a goal of making 40 percent of state vehicle purchases alternative fuel or hybrid models by 2010.

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