Bush can take steps to help auto industry

Detroit News November 14, 2006
Overbearing regulatory changes will cripple Big Three

Today's much anticipated meeting of the chief executives of the Big Three, President George W. Bush and some of his key advisers is good for Detroit and the American auto industry.

No definitive action will be taken today, but that's not the point. Detroit's automakers will remind the president that the auto industry not only is relevant to the nation's economy, it's also still one of the most important.

That factor has been overshadowed lately by the financial troubles that exist in the North American market for all three companies, Ford Motor Co., General Motors Corp. and the Chrysler Group. But the fact remains that the American auto industry still employs one in 10 people in the country and eight out of 10 auto jobs are held by people working for American auto companies.

That's why, in addition to the symbolism, this meeting is important.

Ford's Alan Mulally, GM's Rick Wagoner and Chrysler's Tom LaSorda are all entrenched in significant product and employee restructuring efforts. Billions of dollars in structural costs have been trimmed , and employees have made significant concessions, with more coming.

But there are areas where the president and Congress can -- and should -- step in and help without burdening the taxpayers. Chief among them is the manipulation of currency by Japan and China, primarily. Both countries unfairly control the value of their currency to give their automakers an advantage in the market.

While President Bush has urged the U.S. Treasury to pressure these countries, the progress has been too slow.

Additionally, the president needs to come out against the protectionist tariffs that are imposed on foreign corrosion-resistant steel. Revoking these tariffs, which hurt the automakers and other manufacturers, should be a priority when the U.S. International Trade Commission meets in December. Automakers say they spend an average of about $400 more on their products because of the tariffs.

Such extra costs add up, especially when combined with the legal fees the automakers pay protecting and defending themselves in regulatory matters. Here, too, the president can help. He must thwart some Democratic lawmakers' push to increase the Corporate Average Fuel Economy standards, which have been a failure since their inception in 1975.

The auto industry is one of the most highly regulated in the world but is continually battling interference by special interest groups that want every car and truck to have zero emissions and be equipped with state-of-the-art technology, but still be affordable for everyone.

Finally, it is imperative that the president not give in to environmental activists who are pushing to have carbon dioxide classified as a pollutant by the Environmental Protection Agency. The automakers are building cleaner cars and trucks than ever and have done more to eliminate greenhouse gases from the atmosphere than any other industry.

These four areas are critical to the success of the American auto industry. None require new legislation or massive federal financial help. They require the president's commitment to maintaining an environment that lets the automakers be successful.


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Big meeting

President Bush is scheduled to meet with the chief executives of the Big Three at 1:15 p.m. today.

Key issues include currency manipulation, health care, steel tariffs, environmental regulations

Other attendees include Treasury Secretary Henry Paulson and Al Hubbard, director of the National Economic Council.