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Obama/McCain/GM/Ford Maneuver for Support on PHEVs
Jul 1, 2008 (From the CalCars-News archive)
This posting originally appeared at CalCars-News, our newsletter of breaking CalCars and plug-in hybrid news. View the original posting here.
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Following up on our June 23 report on McCain's proposals,­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"­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,"­2008/­06/­24/­obama-mccain-zap-each-other-on-energy-proposals/­ that otherwise doesn't cover any ground not reported elsewhere, 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 Security­informing/­news/­Speeches/­65ee015f-0eb2-46e3-b7c5-5e9da01d08d4.htm
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, Nevada­page/­community/­post/­stateupdates/­gG5RCv

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 Strieber­6256582/­government/­obama-federal-funding-needed-to-develop-green-cars/

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 Bureau­apps/­pbcs.dll/­article?AID=/­20080626/­POLITICS01/­806260453/­1148/­rss25

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 readers have posted 295 comments about this item.­wp-dyn/­content/­story/­2008/­06/­25/­ST2008062500204.html

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
Wall Street Journal June 28, 2008; Page A4­article/­SB121461489591312807.html?mod=googlenews_wsj

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:­2008/­06/­25/­mccain-energy-gimmick-part-2-

Profile of McCain advisor Jim Woolsey in the Wall Street Journal's special energy section:­article/­SB121432276099000211.html?mod=2_1586_middlebox

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