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Obama/McCain/GM/Ford Maneuver for Support on PHEVs

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  • Felix Kramer
    Following up on our June 23 report on McCain s proposals, http://www.calcars.org/calcars-news/966.html here is the latest. As we had expected/hoped, the
    Message 1 of 1 , Jul 1 2:42 PM
      Following up on our June 23 report on McCain's
      proposals, http://www.calcars.org/calcars-news/966.html here is the latest.

      As we had expected/hoped, the candidates are
      paying attention to each other's statements and
      repositioning their own. They both agree that
      plug-in cars are a good idea but so far, neither
      has been as fully specific as we think is called
      for in this situation (i.e. in relation to the
      program proposed by Brooking Institution's David
      Sandalow in his book, "Freedom From Oil"
      http://www.calcars.org/calcars-news/857.html ).
      The world is watching to understand their energy
      polices; carmakers are waiting to factor in
      federal policies as they decide how quickly to
      move forward, and people looking at the business
      opportunities in converting millions of internal
      combustion engine cars, whose efforts may result
      in the most near-term social benefits, are
      watching to see if their vehicles will also be eligible for incentives.

      Certainly, the race is on. In a story, "Obama,
      McCain Zap Each Other on Energy Proposals,"
      that otherwise doesn't cover any ground not
      reported elsewhere, FOXNews.com on Tuesday, June
      24, 2008, said, "The back-and-forth underscored
      how rising gas prices are steering the political
      debate just as much as the overall economic slump
      or the war in Iraq." In the story below, the
      Washington Post chimed in on what it called "the
      latest skirmish over which presidential candidate
      is better prepared to tackle the nation's energy and environmental problems."

      In what follows, we will focus entirely on
      plug-in cars and NOT on all critiques of other
      aspects of energy policy and differences between
      the candidates on offshore drilling, biofuels,
      gas tax rebates, nuclear power, etc. Below you'll find excerpts from:

      * Remarks by McCain + Clarification from James Woolsey
      * Remarks by Obama
      * Media reports on Obama in Pittsburgh and Las Vegas
      * Media reports on McCain at Lordstown auto factory and in Santa Barbara
      * Other resources

      REMARKS BY JOHN MCCAIN on Energy Security and Our National Security
      June 23, 2008-- remarks as prepared for delivery
      at a town hall meeting in Fresno, CA:

      Ninety-seven percent of transportation in America
      runs on oil. And of all that oil, about 60
      percent is used in cars and trucks. Yet the CAFE
      standards we apply to automakers -- to increase
      the fuel efficiency of their cars -- are lightly
      enforced by a small fine. The result is that some
      companies don't even bother to observe CAFE
      standards. Instead they just write a check to the
      government and pass the cost along to you. Higher
      end auto companies like BMW, Porsche, and
      Mercedes employ some of the best engineering
      talent in the world. But that talent isn't put to
      the job of fuel efficiency, when the penalties
      are too small to encourage innovation. CAFE
      standards should serve large national goals in
      energy independence, not the purpose of small-time revenue collection.

      My administration will issue a Clean Car
      Challenge to the automakers of America, in the
      form of a single and substantial tax credit based
      on the reduction of carbon emissions. For every
      automaker who can sell a zero-emissions car, we
      will commit a 5,000 dollar tax credit for each
      and every customer who buys that car. For other
      vehicles, whatever type they may be, the lower
      the carbon emissions, the higher the tax credit.
      And these large tax credits will be available to
      everyone -- not just to those who have an accountant to explain it to them.

      Furthermore, in the quest for alternatives to
      oil, our government has thrown around enough
      money subsidizing special interests and excusing
      failure. From now on, we will encourage heroic
      efforts in engineering, and we will reward the greatest success.

      I further propose we inspire the ingenuity and
      resolve of the American people by offering a $300
      million prize for the development of a battery
      package that has the size, capacity, cost and
      power to leapfrog the commercially available
      plug-in hybrids or electric cars. This is one
      dollar for every man, woman and child in the U.S.
      -- a small price to pay for helping to break the
      back of our oil dependency -- and should deliver
      a power source at 30 percent of the current costs.

      My friends, energy security is the great national
      challenge of our time. And rising to this
      challenge will take all of the vision,
      creativity, and resolve of which we are capable.
      The good news is, these qualities have never been
      in short supply. We are the country of Edison,
      Fulton, and two brothers named Wright. It was
      American ingenuity that took three brave men to
      the moon and brought them back. Think of all the
      highest scientific endeavors of our age -- the
      invention of the silicon chip, the creation of
      the Internet, the mapping of the human genome. In
      so many cases, you can draw a straight line back
      to American inventors, and often to the
      foresighted aid of the United States government.

      CLARIFICATION: James Woolsey, energy advisor to
      Senator McCain's campaign, has further explained
      that there is not only a $5,000 credit for ZEVs
      but credits close to that for near-ZEVs - which
      include PHEVs. And his calculations for the
      battery prize result in a goal of a 70 percent
      improvement in batteries to get to 30 percent of
      current cost. (In the CalCars-News posting cited
      above, we had repeated an erroneous
      simplification about how much better the battery needs to be.)

      REMARKS BY SENATOR OBAMA as prepared for delivery
      A Serious Energy Policy for Our Future
      Tuesday, June 24th, 2008 Las Vegas, Nevada

      I commend [McCain] for his desire to accelerate
      the search for a battery that can power the cars
      of the future. I've been talking about this
      myself for the last few years. But I don't think
      a $300 million prize is enough. When John F.
      Kennedy decided that we were going to put a man
      on the moon, he didn't put a bounty out for some
      rocket scientist to win ­ he put the full
      resources of the United States government behind
      the project and called on the ingenuity and
      innovation of the American people. That's the
      kind of effort we need to achieve energy
      independence in this country, and nothing less will do....

      I have a very different vision of what this
      country can and should achieve on energy in the
      next four years ­ in the next ten years. I have
      a plan to raise the fuel standards in our cars
      and trucks with technology we have on the shelf
      today ­ technology that will make sure we get
      more miles to the gallon. And we will provide
      financial help to our automakers and autoworkers
      to help them make this transition. I will invest
      $150 billion over the next ten years in
      alternative sources of energy like wind power,
      and solar power, and advanced biofuels ­
      investments that will create up to five million
      new jobs that pay well and can't be outsourced;
      that will create billions of dollars in new
      business like you're already doing here in
      Nevada. And before we hand over more of our land
      and our coastline to oil companies, I will charge
      those companies a fee for every acre that they
      currently lease but don't drill on. If that
      compels them to drill, we'll get more oil. If it
      doesn't, the fees will go toward more investment
      in renewable sources of energy.

      When all is said and done, my plan to increase
      our fuel standards will save American consumers
      from purchasing half a trillion gallons of gas over the next eighteen years.

      Obama: Federal funding needed to develop green cars
      June 26, 2008 by Andrew Strieber

      After responding to rival John McCain's recently
      proposed $300 million battery development prize
      by calling it a "gimmick" and countering that
      more government resources will be needed to help
      domestic automakers break America's dependence on
      imported oil, Democratic presidential candidate
      Barack Obama sat down with industry leaders over
      the past two days to discuss the issue face to
      face. In two separate group meetings, Obama
      recently met with Ford CEO Alan Mulally and GM
      head Rick Wagoner to share ideas and hear their concerns.

      Though the senator's meeting with Mulally was not
      public, the Ford CEO issued a statement calling
      it "very productive," and saying "the vitality of
      our economy will depend on our government seeking
      a partnership with industry." With this in mind,
      today Obama joined an economic roundtable with
      Wagoner and other representatives at Carnegie
      Mellon University in Pittsburgh. Though in the
      past Obama has been tough on domestic automakers
      for building too many SUVs, he began the meeting
      by asking how the next president can help
      domestic automakers cope with rising gas prices
      and global warming. Wagoner responded that while
      the Big Three are putting a massive effort into
      the development of advanced powertrains, the
      "application of these new technologies is pretty
      expensive" and the government needs "to provide
      some support" to help make them affordable. After
      explaining that automakers' "relatively weak
      balance sheets" make it difficult for them to
      shift production lines and build smaller cars,
      the GM chief also brought up his company's Volt
      plug-in hybrid (PHEV) in a discussion of tax
      credits. Designing the car's revolutionary
      gas-electric system has proven more expensive
      then anticipated, and GM will reportedly struggle
      to sell the car at an affordable price. Tax
      credits would help offset the added cost of new technology.

      Noting a "surprising consensus" on fixing the
      economy, the senator agreed with Wagoner that
      federal assistance will be needed to help
      American EVs and PHEVs compete against upcoming
      products from Toyota and VW, among others. Though
      the Department of Energy recently issued grants
      to aid PHEV development, they totaled only $30
      million -- Obama has proposed creating a $150
      billion clean energy initiative, including money
      to help automakers retool factories to build alternative-fuel cars.

      Meanwhile John McCain will visit GM's Lordstown,
      Ohio assembly plant tomorrow and continue to
      discuss his own competing prescription for aiding
      the ailing Big Three. The future of the American
      auto industry has emerged as a major theme in
      this year's presidential campaign, and if gas
      prices continue their steady upward climb, no
      doubt it will only continue to gain importance.

      Thursday, June 26, 2008
      U.S. automakers need federal research money, GM's Wagoner tells Obama
      Gordon Trowbridge / Detroit News Washington Bureau

      PITTSBURGH -- U.S. carmakers need a boost in
      federal research spending and incentives for
      consumers to adopt new and expensive
      technologies, General Motors Corp.'s top executive told Barack Obama Thursday.

      Obama kicked off a forum with top business and
      academic leaders with a question to GM Chairman
      and Chief Executive Rick Wagoner, asking what the
      next president can do to help domestic automakers
      adjust to rising gas prices and increasing environmental concerns.

      "We've got a lot of smart people working" on new
      technologies such as battery-powered vehicles and
      hydrogen fuel cells, Wagoner said, but government
      support for basic research on new energy technologies is crucial.

      "We need to keep in mind ... application of these
      new technologies is pretty expensive," Wagoner
      said. "We need to provide some support to make
      sure these new technologies are affordable to consumers."

      The exchange highlighted the attention Obama and
      his Republican opponent, John McCain, have paid
      to auto issues. Obama met Wednesday with a group
      of business executives including Ford Motor Co.
      President and CEO Alan Mulally; on Friday, McCain
      will tour GM's Lordstown, Ohio, plant and meet with workers there.

      Obama sparked criticism from many in the industry
      last year when, in a speech at the Detroit
      Economic Club, he criticized automakers for
      failing to build more fuel-efficient cars -- a
      speech he has repeatedly referred to in campaign ads and appearances.

      But at Thursday's forum on the Carnegie Mellon
      University campus, Wagoner sat just to Obama's
      left on a stage with some of the nation's top
      technology and academic leaders, and Obama kicked
      off the forum by asking, basically, what he could
      do to help lift the domestic carmakers out of their massive financial losses.

      Referring to those losses and GM's recent
      decision to close a series of plants -- including
      a Wisconsin factory Obama visited during the
      primary campaign there -- Obama asked, "How do we
      shape our energy future in a way that allows GM
      to remain competitive, keeps some of the best
      workers in the world on their jobs and generates
      profits for the company and shareholders?"

      Wagoner sounded a note of optimism, noting GM's
      plan to introduce the plug-in hybrid Chevrolet
      Volt by 2010 and more advanced research on
      hydrogen fuel-cells. But he said the researchers
      developing batteries for hybrids and taking
      hydrogen power from the lab to the highway need
      federal research money. And he asked for
      government help to offset the high costs of newer
      technologies for consumers -- aid that
      traditionally has come in the form of tax credits.

      And Wagoner suggested that the carmakers'
      "relatively weak balance sheets" make it
      difficult for them to make the large capital
      investments needed to shift production lines to new vehicles.

      McCain Has Plan to Make Government More Green
      By Juliet Eilperin and Lyndsey Layton Washington Post Staff Writers
      Wednesday, June 25, 2008; Page A01
      washingtonpost.com readers have posted 295 comments about this item.

      Republican John McCain said Tuesday the federal
      government should practice the energy efficiency
      he preaches, pledging as president to switch
      official vehicles to green technologies and do the same for office buildings.

      Sen. John McCain pledged yesterday that he would
      make the federal government more environmentally
      friendly, while Sen. Barack Obama mocked his
      rival as crafting energy policies that merely
      pander to voters, in the latest skirmish over
      which presidential candidate is better prepared
      to tackle the nation's energy and environmental problems.

      In a speech in Santa Barbara, Calif., McCain
      (R-Ariz.) vowed to "put the purchasing power of
      the United States government on the side of green
      technology" by buying fuel-efficient vehicles for
      its civilian fleet of cars and trucks and by
      retrofitting federal office space. The pledge
      comes months after Obama (D-Ill.) outlined a more
      detailed and ambitious proposal on the subject,
      virtually ensuring that the next administration
      will take significant steps to lower the
      government's output of energy and pollution....

      "Every year, the federal government buys upwards
      of 60,000 cars and other vehicles, not including
      military or law enforcement vehicles," McCain
      said as he campaigned with California Gov. Arnold
      Schwarzenegger, a prominent GOP environmentalist.
      "From now on, we're going to make those civilian
      vehicles flex-fuel capable, plug-in hybrid, or
      cars fueled by clean natural gas."

      McCain Offers Aid, No 'Bailout' on Autos
      By JOHN D. STOLL and ELIZABETH HOLMES with Amy Chozick
      Wall Street Journal June 28, 2008; Page A4

      Detroit's calls for help from Washington are
      gaining some traction, as both Republican John
      McCain and Democrat Barack Obama this week let
      auto-industry executives share the spotlight in
      their presidential campaigns, and suggested they'd lend auto makers a hand.

      During a meeting Friday at a General Motors Corp.
      small-car factory in Lordstown, Ohio, Sen. McCain
      said he doesn't support a "classic" bailout of
      the ailing domestic car companies, but he laid out initiatives to help.

      "It depends on what you mean by a bailout," he
      said. "If you're talking about it in the classic terms, I'm afraid not."

      But the Arizona Republican said he would offer a
      spate of tax incentives and infrastructure
      support aimed at encouraging innovation of more
      fuel-efficient products and expanding
      availability of alternative fuel. He vowed to get
      involved in enforcing trade deals that may
      disadvantage auto companies trying to export cars and parts.

      On Thursday. Sen. Obama moderated a panel of
      business leaders that included GM Chief Executive
      Rick Wagoner. Mr. Obama, who last year scolded
      Detroit for failing to focus on fuel efficiency,
      struck a more sympathetic tone.

      "Obviously all of you realize the market has
      changed so you have every incentive to do so but
      you may need some bridges to help get there,"
      Sen. Obama said. Mr. Wagoner said he left the
      meeting encouraged by Sen. Obama's questions and
      willingness to help. The company is encouraged by
      Sen. Obama's plan to invest $150 billion in green
      technology ideas, many of which affect the U.S. auto industry.

      Sen. McCain said he'd make the
      research-and-development tax credit permanent,
      and "would like to invest American federal
      dollars" in the development of flex-fuel cars
      that run on ethanol, in hydrogen-powered cars, and electric cars.

      "I think once we develop that technology with
      pure research and development then we've got to
      hand it over to the private enterprise and the
      automotive companies. I do not think we should be
      in competition, but ... we have national
      laboratories that are capable of coming up with a
      lot of innovation and a lot of new technology."

      GM North America Chief Troy Clarke joined Sen.
      McCain for a brief plant tour before the
      town-hall meeting. Mr. Clarke, talking to
      reporters, said he is "encouraged" by the amount
      of weight being given the auto industry thus far
      in the election cycle. He said the auto maker is
      engaged in "a technology race" with foreign
      rivals and GM welcomes "a robust national debate on a solution."

      In recent years, GM has been calling for reforms
      on a laundry list of issues, from health care to
      the dollar and energy diversity. Mr. Clarke, once
      GM's labor chief, said the current focus on
      energy will open up the opportunity to eventually
      talk more in depth on all the pressures squeezing Detroit.

      He said attention to how crucial the industry is
      to fixing the energy crisis "is serving as an
      accelerant" for the auto industry's entire body
      of requests from the government.

      Discussion of the McCain program by Joseph Romm at ClimateProgress:

      Profile of McCain advisor Jim Woolsey in the Wall
      Street Journal's special energy section:

      -- -- -- -- -- -- -- -- -- -- -- --
      Felix Kramer fkramer@...
      Founder California Cars Initiative
      -- -- -- -- -- -- -- -- -- -- -- --
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