December 2007

POLICY NEWS

Historic Agreement on Fuel Economy!
Dingell, Pelosi break log-jam, craft forward looking pact

Last week, the U.S. House of Representatives passed historic new legislation to increase fuel economy standards for cars and light trucks, and to provide financial support for the industry and protections for jobs at small car production facilities. The new CAFE provisions would require automakers to meet an industry-wide average of 35 miles per gallon for cars and light trucks, including SUVs, by 2020--the first increase by Congress in car fuel efficiency in 32 years.

Rep. John Dingell, D-Mich., who helped craft the compromise legislation, said the tougher standards are "both aggressive and attainable" and include provisions that give manufacturers the needed flexibility to bring SUVs and light trucks under compliance and to avoid job losses.

"The Dingell-Pelosi fuel economy agreement ensures that the next generation of vehicles will be built here in the U.S., which is now poised to lead the automotive sector into a new era," said Charles Griffith, clean car director for the Ecology Center.

In addition to the 35 mpg requirements, the new fuel economy legislation includes a provision proposed by the UAW that helps keep small car production in the U.S., as well extends credits for the production of flex-fuel vehicles--an area where U.S.-based manufacturers have been industry leaders. The legislation also includes up to $25 billion in loan guarantees for retooling existing auto plants with new fuel-saving vehicles and components. The pact, part of a larger national energy bill, also includes new provisions to encourage renewable energy, advanced biofuels, and energy efficiency.

The energy bill currently faces opposition from Senate Republicans (and President Bush) over other aspects of the legislation, therefore requiring at least 60 votes for passage. Majority leader Harry Reid is expected to make needed adjustments as early as this week. If enacted, the 35 mpg fuel economy requirements should result in fuel savings of up to 1.1 million barrels of oil per day by 2020, with net savings to consumers of $22 billion per year.

Learn more:
Rep. Dingell on Energy Security and Climate Change
Speaker Nancy Pelosi's Bill Summary
H.R. 6: Energy Independence and Security Act of 2007

Read more:
Green Machines: Policy Solutions
UAW: About the Deal
Automakers Support Deal
Senate decides on bill this week

GM's New Labor Contract Increases Hope About Its Future
Deal cuts GM's health care costs, includes promises to build new vehicles in Hamtramck

The new labor contract ratified this September between GM and the UAW should go a long way toward ensuring GM's competitiveness. Not only does the contract include cost-savings from the transfer of GM's health care liability to a new UAW-run program, the contract has another provision that promises to improve GM's reputation: the company has committed to build several new vehicles, including the Chevy Volt, at its Detroit Hamtramck Assembly Plant.

The concept Chevy Volt premiered at the January 2007 North American Auto Show in Detroit, and has been getting loads of press attention since then. The car is technically a hybrid and contains both an electric and gasoline engine, but is never actually propelled by gasoline. Its electric engine is propelled by lithium ion batteries. Bob Lutz, GM’s vice chairman for product development, told a group of automotive journalists that the feasibility of the Chevy Volt plug-in hybrid concept will be proven by next Easter. GM is working to have the plug-in Volt on the market by 2010.

Learn more:
UAW-General Motors Labor Contract Details
GM's Chevy Volt Concept Site
Labor contracts might make Michigan better able to compete
Bob Lutz, the Chevy Volt, and the Easter Bunny

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TECHNOLOGY NEWS

Chrysler

• Chrysler debuted hybrid versions of the Dodge Durango and Chrysler Aspen, both of which—with “HEMI®-hybrid” technology—expect overall fuel economy improvements greater than 25%

Ford Motor Company

• Ford unveiled its "Blueprint for Sustainability," which aims to improve the efficiency of the company's internal combustion engines and a long-term commitment to emerging technologies such as plug-in hybrids and hydrogen
• Specifically, Ford will be rolling out more turbocharged and direct-injection engines that deliver the same power as larger engines with significantly lower fuel consumption.
• Ford also debuted the Lincoln MKS--the first vehicle next year to get Ford's new turbo-charged direct injection engine, which will give more power while being more efficient

General Motors

• GM debuted its Silverado Hybrid, which has a 25% overall fuel economy improvement using a two-mode hybrid system
• GM commits to manufacturing Saturn Vue plug-in hybrid
• Governor Schwarzenegger presented the Green Car of the Year award to GM for the Chevy Tahoe hybrid due to its improvement in city fuel economy

Learn more:
Watch to learn what Chrysler means by "HEMI-hybrid"
Ford delivers first of 20 plug-in hybrids in California
GM's Green Car of the Year: The Tahoe

In response to pressure to improve fuel economy amid ever-increasing oil prices and calls on Congress to impose tougher fuel efficiency regulations, GM launched production of the 2008 Chevrolet Tahoe Hybrid and the 2008 GMC Yukon Hybrid.  The vehicles are being produced in Arlington, TX (UAW Local 95 and 276), and the hybrid transmissions are produced at a plant just outside Baltimore (UAW Local 239) and will be on the market in early December. 

Initially, GM expects these new hybrids to account for 5% to 10% of sales volumes for the Tahoe and Yukon models, and will adjust their expectations based on consumer demand.  GM executives expect environmentally conscious consumers to appreciate the fact that the full-size SUV hybrids will have the same fuel economy in city driving as a four-cylinder Toyota Camry. (Toyota officials, however, have pointed out that hybrid powertrain engines will always get better mileage than gasoline engines in city driving.) 

Learn more:
Green Machines' GMC Tahoe & Yukon Hybrids Fact Sheet