Auto lobby blitzes Senate

Key vote on tough fuel rules could come today

David Shepardson / Detroit News Washington Bureau

WASHINGTON -- Auto executives and dealers from around the country aggressively lobbied undecided senators Tuesday with a crucial vote on raising fuel economy regulations expected as early as today.

In an intense day of Capitol Hill arm-twisting, the auto industry rallied support for a compromise proposal that would soften legislation moving through the Senate that calls for dramatic increases in Corporate Average Fuel Economy, or CAFE.

A vote on the alternate proposal sponsored by a half-dozen lawmakers led by Sens. Carl Levin, D-Detroit, Mark Pryor, D-Ark., and Kit Bond, R-Mo., could happen today, although some supporters were pushing for more time to round up votes or strike a compromise.

The stakes are high for the auto industry as Congress appears determined to finally impose stricter fuel economy regulations amid concerns about global warming and America's dependence on oil.

The current Senate fuel economy proposal, part of a broader energy bill, calls for raising standards 40 percent to 35 miles per gallon for cars and trucks combined by 2020, followed by 4 percent annual increases through 2030 to 52 mpg. Detroit's automakers say it would cripple the industry, a claim that supporters of the bill and environmentalists dismiss as alarmist.

The Levin-Pryor-Bond compromise bill backed by carmakers would set minimum CAFE requirements at 36 mpg for passenger cars by 2022 and 30 mpg for light trucks by 2025.

While automakers, including Toyota Motor Corp., say it would be difficult and expensive to meet that standard, they are reluctantly backing it.

Environmentalists, automakers and senators on both sides said the vote on the compromise proposal will be tight, with its fate in the hands of 10 or 12 undecided senators, many from rural states with a lot of pickup and SUV drivers.

Automakers pulled out the stops Tuesday in Washington. Tom LaSorda, CEO of DaimlerChrysler AG's Chrysler Group, made a surprise visit to Capitol Hill. He joined Mark Fields, Ford Motor Co.'s president of the Americas; General Motors Corp. sales chief Mark LaNeve; GM environmental executive Beth Lowery; and dozens of auto dealers who crisscrossed the hill.

"The bottom line is we are counting votes," said Sen. Debbie Stabenow, D-Lansing, another sponsor of the compromise bill. "It is very, very close."

Cerberus exec joins effort

Even Steve Feinberg, the reclusive head of the private equity firm Cerberus Capital Management LP, met with an undecided lawmaker, Sen. Jon Tester, D-Mont., last week at Tester's Washington office.

"They talked about CAFE," said Tester's spokesman, Matt McKenna. Cerberus recently agreed to buy 80.1 percent of Chrysler in a $7.4 billion deal. Feinberg was joined by a Cerberus lobbyist, former Louisiana Sen. John Breaux.

Chrysler may have the most to lose from a stiff fuel economy measure because its lineup is 70 percent trucks. In a letter to employees last week, LaSorda said the alternative legislation "will cost our company $11.2 billion over the first five years," but that would be "far less than the tougher bill."

The current energy bill "puts us out of business," LaSorda wrote. "For the first five years alone, it's estimated to add up to a staggering $6,700 -- almost a 40 percent increase -- to the cost of every Chrysler vehicle."

Auto executives zeroed in on undecided senators such as Tester, Mary Landrieu, D-La., and David Vitter, R-La.

"Frankly, if the head of GM wanted a meeting this week he probably wouldn't have gotten it," said McKenna, spokesman for Tester. "But since they were with Montana GM dealers, they got in the door."

LaNeve said his meetings with senators -- including Tester, Landrieu and Vitter -- went well. "We need to be better on CAFE," he said. "We need it done in a reasonable way that still provides customer choice. You can't provide towing capability, people-hauling capability, off-road capability off a vehicle built on a car chassis."

GM's Troy Clarke, the head of North American operations, who was on Capitol Hill for meetings last week with senators, sent a letter to employees that also warned of the devastating effect the Senate energy bill would have. In a meeting Tuesday in Detroit with UAW officials, GM reiterated that the Senate bill could cost the automaker $40 billion.

Undecided Senators key

The compromise bill enjoys solid support among Republicans. The vote will likely come down to a several undecided Democrats and a few moderate Republicans.

Sen. Dick Durbin, D-Ill., who opposes the compromise bill and is the Senate's No. 2 Democrat, said between seven and nine Democrats were expected to support the measure, including the bill's four Democratic sponsors. Pryor said they would have at least nine Democratic supporters.

"We know its going to be a close vote," Pryor said.

Republicans said the compromise bill has gained support, but weren't confident. "It's catching fire from a nothing to a burn and I don't know how far it's going to burn. It's close," said Sen. Pete Domenici, R-N.M., who declined to say if he would support it.

Ford's Fields called Tuesday's meetings "very encouraging."

"Ford will continue to work with members of Congress to develop and advance aggressive -- yet economically feasible -- fuel economy increases as part of a comprehensive energy independence bill," Fields said Tuesday.

Senators said there were discussions about whether a last-minute compromise could be brokered that would split the difference between the alternative proposal and the current Senate bill.

Automakers were emphasizing that even if they lose -- there are still many steps in the process.

House delays action

The U.S. House has essentially decided to punt on the issue of fuel economy until the fall, as U.S. Rep. John Dingell, D-Dearborn, withdrew a committee draft Monday that contained the same fuel economy increase as the Pryor-Bond-Levin compromise bill. Before new fuel economy legislation could become law, the House and Senate would have to resolve their differences and pass a bill that President Bush would sign.

The Senate energy bill also faces critics on issues beyond fuel economy, so it's possible the bill could be scuttled without a vote.

Separately, congressional committees are considering tax breaks and further funding for advanced research and buying alternative vehicles. The Senate Finance Committee proposed $29 billion in new taxes for oil companies to fund tax credits for wind and solar power and significantly expand incentives for hybrid vehicles and alternative fuels.

You can reach David Shepardson at (202) 662-8735 or dshepardson@detnews.com.