June 14, 2007 / 12:20 AM / 12 years ago

Auto giants complain against Congress

By John Crawley

WASHINGTON, June 13 (Reuters) - Major U.S. auto companies are trying, through allies in the Senate, to weaken the leading proposal for stricter fuel-efficiency standards but fear they are being punished in Congress after years of resisting such measures.

General Motors Corp. (GM.N), Ford Motor Co. (F.N) and Chrysler Group DCX.N are lobbying lawmakers to convince them that U.S. carmakers are still vitally important to the American economy despite losing market share to foreign competition, and so still deserve special consideration.

Ford, for instance, is running advertisements in Capitol Hill publications touting its reach — more than 560,000 employees, retirees and dependents in the United States and more than 48 million vehicles on the road.

The chief executives of GM, Ford and Chrysler met with Democratic and Republican leaders last week to highlight their agenda and reinforce their economic punch, especially in the politically heavyweight states of Michigan and Ohio.

Auto company officials are skittish about antagonizing lawmakers and complained in private about the mood, especially in the Senate.

“There are a lot of people who want to vote to teach the automakers a lesson for years of blocking things,” said one senior executive about carmakers’ resistance to previous attempts by Congress to mandate tougher rules for how far cars should be required to go on a gallon of gasoline.

“We went off the tracks somewhere,” said another official from the same company. “The auto sector stopped having a huge economic impact and has become part of the problem.”

Both officials asked not to be identified.

Peter Morici, an economist at the University of Maryland, said the Big Three are still relevant despite their sliding market share. But he said Detroit has “gotten nothing but special treatment” on mileage standards and now finds itself behind the curve as government is demanding more efficiency to reduce oil consumption.

“We’re making great strides in engine technology and putting it in horsepower instead of mileage,” Morici said.

Sen. Debbie Stabenow, a Michigan Democrat trying to help carmakers with their legislative priorities, said there is some lawmaker sentiment against Detroit.

“There is a sense that they don’t want to move ahead,” Stabenow said, arguing that there is misunderstanding among her Senate colleagues about global competition and automaker intentions to cut oil use through fuel alternatives.

“If anything, the industry is not telling its story well,” Stabenow said. “They are already moving. They are already doing things. But there is not an understanding of that.”

Another Michigan Democrat, Carl Levin, and Stabenow are close to proposing alternative legislation to the chief Senate proposal that would require a 4 percent annual improvement in fuel economy beginning in 2011. Under that plan, vehicles would have to average 35 miles per gallon by 2020.

Levin and Stabenow were still working out details and mustering support among colleagues for their initiative, which would mandate a range of 36 miles per gallon for compacts, sedans and wagons by 2022 and 30 mpg for sport utilities, light trucks and vans by 2025.

Big automakers, including Japan’s Toyota Motor Corp. (7203.T), support the Levin/Stabenow alternative, even though Levin said it would be tough on them financially.

Sen. Tom Carper, a Delaware Democrat, chastised the auto chief executives last week and called the stricter Senate standard “tough love.”

But Sue Cischke, a Ford senior vice president, said the more robust proposal would break the industry. “There is nobody who can reach that target,” she said.

((Reporting by John Crawley, editing by Gary Hill; Reuters Messaging: john.crawley.reuters.com@reuters.net +1 202 898 8340)) Keywords: USA AUTOS FUEL/

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