An op-ed piece in  The Washington Post praises the wisdom of Congress that refused to renew the 45-cent-per-gallon tax credit for corn-based ethanol and the 54-cent-per-gallon tariff on imported ethanol, thereby exposing alcohol to the rough treatment of the market. Also not extended was the tax credit for installing a charger at home or in a commercial location.

The WaPo thinks killing the $6 billion incentive to turn corn into fuel, and letting EV owners buy their own charger was righteous, but only a half-measure. Congress should have finished the job and should have finished handing out $7,500 tax credits to buyers of EVs. The WaPo thinks it’s a waste, and the technology is going nowhere. Read More >

The Detroit News reports that 66 US Representatives wrote to the House Appropriations Committee today to urge a measure blocking the EPA from regulating fuel economy in the 2017-2025 period. The letter, signed by 64 Republicans and three Democrats requests

A one-year ‘time out’ is necessary as EPA and (California) are setting national fuel economy standards without explicit authorization by Congress, under laws not designed to regulate fuel economy

According to the DetN, “the proposal would let the National Highway Traffic Safety Administration go forward with setting fuel economy requirements, but under the law it could only set new requirements through 2021.” And unlike past battles over CAFE, opposition this time around does not appear to be coming from the OEMs, but from NADA, the new car dealer lobby group. The only OEM to not sign onto proposed 2017-2025 standards is Volkswagen, which is reportedly in talks with regulators over the proposal.
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A top congressional leader on Wednesday made clear his opposition to President Obama’s idea of spending $10 billion to create a national infrastructure bank (view details). The bank, part of the White House jobs bill, would offer public subsidy for the financing of “public private partnerships” — which most often would take the form of a toll road. The chairman of the US House Transportation Committee said at a hearing the president’s plan would not advance.

“A national infrastructure bank is dead on arrival in the House of Representatives,” Chairman John Mica (R-Florida) said. “If you want a recipe to put off job creation, adopt that national infrastructure bank proposal.”

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In addition to being a representative from Pennsylvania, Republican Mike Kelly is also a Chevrolet dealer whose family has sold Chevys since 1953. But in recent hearings on government fuel economy ratings, he laid into his brand’s green halo car, the Chevy Volt with surprising zeal. Or, not-so-surprising, when you realize that he decided to run for congress in the wake of the bailout-era dealer cull.

I’m a Chevrolet dealer… we have a Chevy Volt on the lot, it’s been there now for four weeks. We’ve had one person come in to look at it, just to see what it actually looks like… Here’s a car that costs $45,763. I can stock that car for probably a year and then have to sell it at some ridiculous price. By the way, I just received some additional information from Chevrolet: in addition to the $7,500 [federal] tax credit, Pennsylvania is going to throw another $3,500 to anybody foolish enough to buy one of these cars, somehow giving them $11,000 of taxpayer money to buy this Volt.

When you look at this, it makes absolutely no sense. I can stock a Chevy Cruze, which is about a $17,500 car and turns every 30 to 40 days out of inventory… or I can have a Volt, which never turns and creates nothing for me on the lot except interest costs… So a lot of these things that we’re seeing going on have a tremendous economic impact on people who are being asked to stock them and sell them. There is no market for this car. I do have some friends who have sold them, and they’re mostly to people who have an academic interest in it, or municipalities who are asking to buy these cars.

With dealers like that, who needs competitors? Seriously, Kelly even says he fired the guy who ordered a Volt for his dealership… which he then counts against the Volt’s job creation record. Hit the jump for the rest of his quote.
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The Congressional Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending held hearings this week on proposed CAFE standards, as part of Chairman Darryl Issa’s investigation of the regulations. The first panel’s testimony can be seen in its entirety in the video above (all prepared testimony can be found in PDF format here), and it’s worth watching. Though the predictable D.C. partisanship certainly shows up, Anwyl’s testimony was the highlight the hearing, being a tough but fair analysis of the standards. Hit the jump for a brief roundup.
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Remember when cars, especially Toyotas, suddenly had a mind of their own, started accelerating, leaving their drivers helpless and hapless? It was in the beginning of 2010. The media cited scores of allegedly killed people. Source: The NHTSA complaint database. When complaints skyrocketed, the media wrote about a dramatic increase of complaints. Now, have a look at the graph above. Read More >

In a report released earlier this week [PDF], the EPA Inspector General criticized the Technical Support Document for the portion of greenhouse gas regulation dealing with “Endangerment,” or the possible effects of greenhouse gasses. Inspector General Arthur A. Elkins Jr. summed up his office’s findings [PDF], writing

The OIG evaluated EPA’s compliance with established policy and procedures in the development of the endangerment finding, including processes for ensuring information quality. We concluded that the technical support document that accompanied EPA’s endangerment finding is a highly influential scientific assessment and thus required a more rigorous EPA peer review than occurred. EPA did not certify whether it complied with OMB’s or its own peer review policies in either the proposed or final endangerment findings as required. While it may be debatable what impact, if any, this had on EPA’s finding, it is clear that EPA did not follow all required steps for a highly influential scientific assessment. We also noted that documentation of events and analyses could be improved.

Oy vey. Greenhouse gas science controversy. So, what’s the problem really about?

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The Detroit News reports that the only Republican in Washington with subpoena power, Rep Darrel Issa has written a letter asking Ford CEO Alan Mulally for “a full and complete explanation of Ford’s decision” to stop running an advertisement that was critical of the TARP-funded auto bailout.

In a letter, Issa asks Ford if any White House, Treasury or other federal employee discussed the ad with any Ford employee “at any time via any manner of communication” and asks the automaker to turn over any documents connected to any discussion by Oct. 12.

Spokeswoman Meghan Keck said Ford will cooperate, but reiterated that the White House didn’t pressure the Dearborn automaker.

Ford took the ad off of Youtube after “individuals inside the White House questioned whether the copy was publicly denigrating the controversial bailout policy CEO Alan Mulally repeatedly supported in the dark days of late 2008,” according to Daniel Howes of the Detroit News. The same day Ford restored the video, and denied that White House pressure led to the takedown. Color us curious as to how Mulally is going to explain this little episode…

UPDATE: The Washington Post’s Plum Line reports

Editor’s note: When I wrote about OnStar’s latest round of privacy concerns, I didn’t realize that the chairman of the Senate Judiciary subcommittee on privacy, technology and the law had voiced his own concerns in a letter published just the day before. Here is the letter, as published at Senator Franken’s website. OnStar has already said it will respond to specifically to the concerns of Senators Franken and Coons.

Ms. Linda Marshall, President
OnStar Corporation
400 Renaissance Center
Detroit, MI 48265

Dear Ms. Marshall:

We are writing to express our serious concern with OnStar’s announcement earlier this week that it would continue to track the GPS locations of its customers’ vehicles even if those customers have affirmatively ended their contractual plans with OnStar.  In this email announcement, OnStar informs its current and former subscribers that it reserves the right to track their locations “for any purpose, at any time.”  It appears that the only way to stop this tracking is to actually call OnStar and request that the data connection between OnStar and the vehicle be terminated; this service is not available online.  OnStar further reserves the right to share or sell location data with “credit card processors,” “data management companies,” OnStar’s “affiliates,” or “any third party” provided that OnStar is satisfied that the data cannot be traced back to individual customers.  See OnStar, Privacy Statement: Effective as of December 2011.  In a nutshell, OnStar is telling its current and former customers that it can track their location anywhere, anytime—even if they cancel their subscriptions—and then give or sell that information to anyone as long as OnStar deems it safe to do so.

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With the high political drama surrounding America’s debt ceiling crisis, last Friday’s CAFE announcement received much less attention from the media than it might have. But, flying even further beneath the radar is an attempt by Republicans to undo the fuel economy agreement that was the result of long negotiations. According to the NYT, some 39 “anti environmental” riders were attached to an Interior Department and EPA appropriations bill, including one which reads

Sec. 453. None of the funds made available under this Act shall be used— (1) to prepare, propose, promulgate, finalize, implement, or enforce any regulation pursuant to section 202 of the Clean Air Act (42 U.S.C. 7521) regarding the regulation of any greenhouse gas emissions from new motor vehicles or new motor vehicle engines that are manufactured after model year 2016 to address climate change.

Though one rider, which would have prevented any new listings on the Endangered Species Act lists of threatened and endangered species, was defeated, the NYT reports that the fuel economy rider is still pending. Politico adds that the bill is scheduled to go to the House floor today, but that President Obama is already threatening to veto the bill. Having worked with California, environmental groups and the auto industry to hammer out a compromise, it’s unlikely that the White House will approve any final bill that includes a measure to gut the new 2016-2025 standard… but the fact that Republicans are trying to eliminate the EPA’s ability to regulate fuel economy indicates that someone, somewhere wouldn’t mind seeing the newly-approved CAFE standard gutted.

With congress deadlocked on the debt ceiling, President Obama used today’s ceremony announcing (although not fully revealing) a 2025 CAFE standard to contrast fuel economy standard negotiations with the chaos on Capitol Hill. ABC quotes the President saying

You are all demonstrating what can happen when people put aside differences.  These folks are competitors.  You’ve got labor and business.  But they decided:  We’re going to work together to achieve something important and lasting for the country. So when it comes to tackling the deficit or it comes to growing the economy… the American people are demanding the same kind of resolve, the same kind of spirit of compromise, the same kind of problem solving that all these folks on stage have shown. They’re demanding that people come together and find common ground… That’s what I’m fighting for.  That’s what this debate is all about.  That’s what the American people want.

But getting a bunch of auto CEOs in the same room to agree on one 2025 “number” is a lot easier than breaking a political deadlock: after all, the standard could well be changed during the 2017 review period, so nobody is agreeing to anything set in stone past 2016. And the saber-rattling continues, as industry consultants predict doom for the post-2016 period, when the truck standard hits the same 5% annual improvement rate as cars. Besides, Volkswagen and Daimler are the equivalent in this situation of holdouts in the congress, refusing to appear at today’s ceremony and protesting the proposed standard in the media. And when the final rules is announced, this coalition of exemplary compromise could fall apart, as the Sierra Club threatens

As the administration moves forward to finalize the standard, it is critical that they avoid weakening loopholes and giveaways for the industry, and we look forward to working with them to ensure the strongest 2025 fuel efficiency and pollution standards possible to benefit American families and workers.

Defections on the right and left? Continued saber rattling? No concrete agreement yet in any case? Sounds a lot like congress, actually…

Photo Credit: Autoblog Green

It’s getting a little predictable. Go to a big car event like the North American International Auto Show or the Society of Automotive Engineers (SAE) World Congress and you’re going to see politicians and government officials. I suppose that’s to be expected, but to be honest, I’m a little ticked off at how our public servants get a large megaphone at those events without bearing any of the costs that you, I, or a car company would have to pay for for the same treatment.

For the past three years particularly because of the meltdown of the domestic automakers, the bailout and the US Treasury’s subsequent stakes in GM (still held) and Chrysler (divested so that Fiat could own more), but really since the beginning of time, politicians and auto shows went together. I remember, after a press conference where Wayne County (MI) executive Robert Ficano exchanged gifts with the chairman of the People’s Army owned automaker Changfeng, asking Mr. Ficano just how many Changfeng employees voted in Wayne County. During the ’08 presidential election, most of the primary candidates on the Republican side visited the show’s press preview.

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With CAFE negotiations heating up, safety regulation coming down the pipe and the UAW pushing for another round of “retooling” loans, GM is upping its profile in the nation’s capitol with a new ad campaign aimed at policymakers. The DetN reports

A Washington-based spokesman for the automaker, Greg Martin, said the effort is to make sure policy makers “are aware of GM’s contribution to our nation’s economic and competitive strength.”

GM has a broader story than just profits and sales, he said.

“GM has started an ad campaign in select Washington publications because there’s more to GM’s resurgence than just increased sales and profitability,” Martin said. “GM is also an auto company investing heavily in America’s future, creating new jobs and inventing solutions and technologies that will make a real difference in energy and safety.”

But the waves of coming auto-related regulations may not actually have motivated the ad so much as the fact that the government is likely to sell off its remaining 26% share in GM by the end of the year (if not by the end of the Summer), and they’re facing an $11b loss at current stock prices. By emphasizing that the auto bailout created a positive corporate citizen rather than just a newly-profitable company, GM likely hopes to convince the government that the political downsides of taking a big loss on The General was ultimately worth it. And that’s an important PR step in the short term as well, as CAFE negotiations are giving rise to bailout-tinged rhetorical attacks on the automaker. For example, Ralph Nader tells the Freep

We give GM billions of dollars, and what do taxpayers get in return? Opposition to a policy that will clearly save them money and give them better cars,

An anonymous tipster has sent us a copy of a letter from the Michigan congressional delegation to President Obama [PDF here, or hit the jump for an embedded copy], which calls his proposal for a 56.2 MPG CAFE standard by 2025 “overly aggressive and not reasonably feasible.” The letter is remarkable in the sense that the major signatories are Democrats, and yet it attacks the President’s proposal with more vigor than many inside the industry. The letter also confirms that that the Detroit-based automakers already rely on CAFE’s “credit” loopholes in order to meet the 2012-2016 standard, a stunning admission of how far behind Detroit still lags in fleet fuel economy. And rather than taking responsibility for their situation, the MI representatives blame CAFE for Detroit’s low fleet efficiency, arguing that “manufacturers that produce primarily smaller vehicles will have an unfair advantage.” Moreover, the MI reps don’t just admit that Detroit is behind its competition, but even goes as far as to argue that “the overall targets currently proposed may exceed what is technologically achievable for the the US automakers that produce and sell the majority of the larger pickup trucks and sport utility vehicles that US families and businesses -and tens of thousands of autoworkers- depend on.”

In short, the letter strikes me as a shockingly old-school display of excuses and apologia that stands in sharp contrast to the “green car revival” narrative that Detroit and D.C. pushed so hard during the bailout. And frankly, I’d be embarrassed if I ran one of the largest automakers in the world and I was reduced to pleading my inability, on technological grounds no less, to achieve a 56.2 MPG fleet average (which in “window sticker” terms, translates to about 41 MPG EPA) within 15 years… even though CAFE is riddled with loopholes that make it easier to continue building thirsty trucks. If Detroit were actually leading the charge for a gas tax (or offering any kind of market-driven alternative), it might have some credibility on this issue, but as things stand this strikes me as nothing more than whining. So much for America’s “can-do” spirit…

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Well, I just wrote about 1,500 words on this topic which our post editor just obligingly disappeared into the digital void, wiping out over an hour of work. This was, perhaps, an appropriate turn of events, however, as the majority of those 1,500 words were used to describe the frustrating political stalemate that played out over the last two days of hearings on “The Lasting Implications of the GM Bailout.” The dynamics of the government’s exit from GM seem to have changed little since I wrote “Government Motors: The Exit Strategy,” and the hearings focused on the political implications of the bailout. Having determined that the bailout will help the President’s reelection in midwestern states, the White House (as represented by auto task force member Ron Bloom) sought to retrench its “things would have been worse” position, and Republicans attacked on all fronts for the very same reason. The government’s favorable treatment of UAW-represented workers, especially in comparison to Delphi’s non-UAW retirees was a major point of attack, and the committee caused Bloom deny (under oath) having ever said that “I did this all for the unions,” despite the fact that both the Detroit News’s David Shepardson and Bloom’s task force colleague  Steve Rattner have quoted him directly. Emails obtained by The Daily Caller were also presented as (more) evidence that the government intervened in a number of day-to-day decisions at GM, including the Delphi retiree issue.

Ultimately, the Republicans landed some serious body blows on the policy, although nothing radically new was presented. Bloom, meanwhile, defended the bailout by arguing that the alternative would have been much worse. In short, the political stalemate over the auto bailout continues… much to GM’s dismay. And since insiders are indicating that any collusion to boost GM’s stock price in order to improve the taxpayers’ return would be worse than a larger loss, a $10b+ loss is as good as guaranteed. Which means the Republican attacks will continue and the political trench warfare over the issue will only continue.

[Watch the bailout hearings here]