Green car bailout

GELLERMAN: From the Jennifer and Ted Stanley studios in Somerville, Massachusetts, this is Living on Earth. I’m Bruce Gellerman, in for Steve Curwood.

General Motors just celebrated its 100th birthday. But GM didn’t spend much time reflecting on history – it’s busy trying to figure out its future. The company, indeed all US auto makers, have been in a skid for decades, whiplashed by quality conscious consumers who are turning from the makers of gas guzzlers to manufacturers who make more efficient models. GM, Ford and Chrysler all say alternative-powered vehicles are just down the road. But to help them make the switch the companies want American taxpayers to pony up as much as 25 billion dollars in loans. But will all those greenbacks from Uncle Sam really get Detroit to make greener cars? Living on Earth’s Jeff Young reports from Capitol Hill.

YOUNG: To mark its first hundred years GM rolled out what it hopes will be the car to lift it from disastrous sales doldrums – the Chevy Volt.

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YOUNG: The Volt is a four-passenger, plug-in electric car that could go 40 miles before any fuel is burned. It’s due in showrooms in about two years and is already generating some buzz. But GM says it needs some help to actually make the Volt and other high mileage cars. Hours after the Volt’s rollout, GM CEO Rick Wagoner was on capitol hill trying to persuade Congress to put up 25 billion dollars in loans.

WAGONER: Our industry has a real opportunity to move away from our traditional almost complete reliance on oil that powers our vehicles. And I think the 25 billion dollars included in the energy bill last year would be very helpful in enabling the industry to move more rapidly.

YOUNG: Wagoner wants Congress to come up with money it authorized but never made available last year when lawmakers approved tougher standards for fuel economy. To get industry’s agreement to make autos averaging 35 miles per gallon by the year 2020, Congress included government-guaranteed loans to help automakers retool factories. It could cost taxpayers five to seven billion dollars to back up the low interest loans. Senate Democratic leader Harry Reid says that seems like a bargain after the week’s big money bailouts on Wall Street.

REID: Five billion will give these companies the ability to retool to compete with the rest of the world. I think that’s small change and it would help.

YOUNG: But there is also skepticism and resentment among lawmakers who butted heads with car companies for years over fuel efficiency, like Florida Democratic Senator Bill Nelson.

NELSON: I believe that you really need financial incentives to retool. But I must admit it is hard for me to do that when each year I’ve been in the senate you all ­ collectively Detroit ? have opposed us and beat us every year when we tried to increase miles per gallon standards.

YOUNG: I caught up with Wagoner for a few questions. He was still bristling at criticism that Detroit had dug its own hole by fighting fuel efficiency.

WAGONER: To those critics I say for one thing we spent $103 billion in past 15 years on pensions and health care. If they look category by category GM has more vehicles that get 30 mpg than any other manufacturer in this country. We have more hybrid vehicles on the road than any other manufacturer. I think it¹s silly to say we should be punished for having done the best trucks, we’re glad we did the best trucks. And frankly all manufacturers have been hit by this radical change in the market condition, not just GM, not just Ford so I think people saying that really are not looking at the facts.

YOUNG: How do taxpayers know they’re going to get greener vehicles out of this deal?

WAGONER: Well, the legislation will call for that, and I would say not only that, they could walk into any GM showroom right now and see almost monthly a growing number of hybrid vehicles, significantly better fuel economy in each generation of products, and if they want to wait a few years they can see a Chevy volt, so they can see a lot of evidence.

YOUNG: But it’s not clear how many Volts GM plans to generate. Longtime clean car advocate Dan Becker, with the group Climate Safety Project, tracked GM’s public comments to the Department of Transportation, as the department sets the first rules to implement the new, higher fuel economy standards.

BECKER: They quietly submitted a document saying, we don’t intend to produce the Volt in significant numbers, so please don’t count it in the mix of what our new fuel economy standard will be. So out of one side of their tailpipe they’re saying this is a change-making vehicle, on the other side they’re saying we’re only going to make a few of them, so don’t count it.

YOUNG: Becker says automakers should be made to go even further than the current target of 35, to 40 mpg – something the National Academy of Sciences says is within technological reach. Instead, it appears automakers are already trying to weaken requirements. For example, last year’s energy act said companies that want loans have to put that money toward making vehicles at least 25 percent more efficient. GM’s Wagoner asked lawmakers to remove that restriction. Becker says that’s the wrong way to go.

BECKER: We need to get cleaner vehicles that pollute less, that guzzle less gas and that will cut our addiction to oil, save us money and cut global warming pollution. And that’s what we can expect from companies we help bail out.

YOUNG: Back in the 1950s, when the big three automakers were really big, a GM executive told congress “What’s good for the nation is good for GM, and vice versa.” If the leading automakers really do use taxpayer money to cut the country’s oil dependence, then that might still ring true. For Living on Earth, I’m Jeff Young in Washington.