UAW President Calls for Incentives for US Production of Flex-Fuel, Hybrid and Clean Diesel Vehicles
20 January 2006
Speaking at the Automotive News World Congress in Detroit, Ron Gettelfinger, the president of the United Auto Workers (UAW), called for the government to provide economic incentives for the production of flexible-fuel, hybrid, clean diesel, and other advanced-technology vehicles and parts in the United States.
The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) has about 640,000 active members in more than 800 local unions across a wide range of industries, not just automotive. Its representation of the workers employed at Ford, GM and the Chrysler has the highest profile, however, and is currently the most charged given the financial difficulties of two of those companies.
As some U.S. senators have pointed out, the United States dependence on oil means dependence on foreign oil, because U.S. oil reserves are less than one percent of the world’s oil reserves. We need to reduce our consumption of oil and that obviously poses a tremendous challenge for the auto industry.
It also presents a tremendous opportunity to develop bold new national policies that promote greater energy independence, improve our environment and create tens of thousands of good jobs in the auto industry.
This will make it possible for all automakers and automotive parts suppliers to move forward aggressively with investment in the domestic production of alternative fuel and advanced technology vehicles.
—Ron Gettelfinger
Although the UAW does not agree with all of the provisions in various legislation such as the “Vehicle and Fuel Choices for American Security Act” (earlier post) and various proposals to spur the development of flex-fuel and plug-in vehicles (earlier post), the union agrees with the central proposition.
We are not advocating a “bail out for Detroit’s Big Three.” We firmly believe that any incentives must be designed to establish a truly level playing field among all the automakers and automotive parts suppliers. We believe that, in the near term, the most important thing the federal government can do to reduce our nation’s dependence on foreign oil would be to aggressively promote the production, sale and use of alternative fuel vehicles.
Gettelfinger proposed the following as possible approaches:
Mandating that a certain percentage of all vehicles sold in the U.S. be flex-fuel capable by a specified date. “Indeed, there’s no reason why automakers can’t make 100 percent of their vehicles flex-fuel capable within a reasonable timeframe.”
Providing incentives to encourage the creation of more processing plants to increase the supply of alternative fuels.
Increasing and extending the tax credit that was included in the 2005 Energy Bill to encourage the conversion of existing filling stations so they have the capability to distribute alternative fuels.
Although the UAW supports incentives for cars such as hybrids, it believes that the current consumer tax credit has the effect of subsidizing overseas production at the expense of jobs in the US.
A study by the University of Michigan indicates automotive job loss will intensify by tens of thousands of U.S. jobs as gas-electric hybrids and clean diesels gain a larger share of the U.S. market because all the key components for these advanced technology vehicles are currently manufactured overseas.
The UAW believes the federal government should provide incentives to encourage the production of these advanced vehicles and their key components.
Gettelfinger proposed that assistance provided to the auto companies—whether through the existing corporate tax rate reduction or the alternative of health care relief—be expressly tied to the company’s investment in the domestic production of flex-fuel and advanced technology vehicles and their key components.
the last time Detroit received a huge grant of money to develop high mileage cars, a few years back, absolutely nothing came of it except a show car from each of the big 3. Why would it be any different this time?
Posted by: Richard Burton | 20 January 2006 at 07:03 AM
We are not going to provide sufficient alternative fuel to make a significant dent in our oil consumption. We need to focus on the demand side for all fuels. We've done that to a certain extent with hybrids but that's a limited program as it puts a cap on the number of vehicles subsidized. The next step is to levy a gas tax that will get everyone's attention and will be a wake up call for the consumer and the auto companies.
The auto companies, as part of their dna, and the nature of American business, will focus on the short term. Their narrow focus will result in being destroyed by the Japanese and the coming Chinese. China will introduce a car in 2008 for $10,000 with good gas mileage which will begin the process of blowing away our industry. Flex fuel or not, the UAW better set up shop in China if it wishes to retain any jobs.
Posted by: t | 20 January 2006 at 07:17 AM
t - I fully agree with you. The North American car industry is overdue for a drastic change if it wants to survive. Affordable low consumption Chinese $10k cars (Hybrids, PHEVs and EVs) will be around soon and our Big 3 will have nothing similar to offer. If I were a USA/Canada UAW member, I would start looking for a job at Honda or Toyota right now.
Posted by: Harvey D | 20 January 2006 at 09:29 AM
How about the incentive of keeping you job. There was a time not that long ago that the US car makers were the best in the world, now we have fallen behind and ecpecting the government and tax payers for a bailout is unreasonable. We have thousands of un and underemployeed engineers in America, hire then to get us back on track or get out of the car making industry.
Posted by: altfuelsfan | 20 January 2006 at 03:30 PM
t, I remember hearing the same thing over 10 years ago about the south korean (Daewoo, Hyundia, KIA). Even today they're cheap but their mpg is on par or worse than the Big 2.5 when comparing vehicles of the same class. Look at their "economical" four cylinders, I don't think any get 30mpg in the city. Look at their V6 midsize sedans, IIRC all are 2+ mpg less than the Accords/Camrys/Fusions/Malibus ect.
Posted by: v | 20 January 2006 at 09:57 PM
t-
Do you have any predictions on the quality of a car built in china? Have you ever bought anything from Harbor Freight?
I think you are wrong about our ability to put a dent in our oil consumption with "alternative" fuel.
I am with you on the gas tax, but unfortunately I think a politician that tries to enact such a thing will have to get out of town before the sun goes down. And please don't blame politicians, oil companies, halliburton, Dick Cheney or GWB. Blame the overwhelming majority of your neighbors.
I think Ford has been around long enough to learn to make long term plans.
I don't think there is anything wrong with Ford's engineering. I would love to be able to buy their diesel focus from Italy that gets 60mpg. You can have all the hybrids and cheap-o china cars.
I think we should have a more intelligent debate. Do americans want 300hp because that is what the big-3 make or do the big-3 make the 300hp because that is what americans want? I am sure the truth is somewhere between the two, but I think it is more because that is what people want.
JRod.
Posted by: JRod | 21 January 2006 at 11:22 PM
Blaming consumers for the miserible choices the auto cartel gives us is simply buying into big business propaganda. The reason the companies prefer making big vehicles is that it doesn't cost that much more to make big parts than small parts yet they get away with charging twice as much. If there was true competition then we'd be seeing Amory Lovins Hypercars everywhere you look.
Posted by: tom deplume | 23 January 2006 at 07:55 AM
Tom-
I think you have bought into the anti-business propaganda. Almost every vehicle sold comes with several engine options. If people cared about fuel economy the manufacturers would not be able to sell the bigger engines. People do indeed buy the v6 or v8 and pay a hefty premium(Yeah, it's got a hemi).
Are you surprised the companies make bigger parts so they can "get away with" charging twice as much? Can you name any industry that does not try to increase sales? You say "If there was true competition then we'd be seeing Amory Lovins Hypercars everywhere you look." I don't know what those are, but who is stopping them? The automobile industry is one of the most competitive I can think of.
I think your argument sucks and is full of knee-jerk logic. I am still blaming your neighbors for our vehicle selection even though it might be more fun to blame the government or big business.
Cordially,
JRod.
JRod.
Posted by: JRod | 23 January 2006 at 07:06 PM