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Elections and Automakers by Ed Wallace

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Elections and Automakers
Posted Thursday, Aug. 02, 2012

By ED WALLACE
Does anyone remember when America's environmentalists and safety advocates claimed the sole right to use the automobile industry as a punching bag? What was truly great about that period is that those crusaders at least had a legitimate belief that engineering could correct many automotive shortcomings. And yet, in our paradoxical way of looking at things, many Americans hold safety activist Ralph Nader in scorn for his insistent "meddling" with the auto industry - while at the same time demanding the latest safety features in their personal automobile.

The environmentalists were slightly different.

It's not that their ideals were wrong, but it would take the evolution of technology to achieve the goals of nearly emission-free vehicles. GM sent its first engineers to Los Angeles to study the cause and effect of automobiles and smog in the early 1950s. And their conclusion was that the automobile was likely the primary contributor to smog, but at that time they had no idea what needed to be invented to control automotive emissions.

Junior Safety Nut

When I first entered the auto industry in 1973, it was definitely not popular to admire Ralph Nader. But I did. Like many readers, I grew up when there were no seat belts in cars that came with cheap bias-ply tires that relied on inefficient drum brakes and sported "let's hope you don't slam into this" metal dashboards. Many an emergency stop was survived thanks to the car's only safety device - your mother's right arm slamming across your chest to keep you from cannoning into the dash.

But my family survived even worse. When we moved back to the Lower 48 from Alaska in the late 50s, we drove down in the family's Pontiac station wagon. Somewhere in the backwoods of Canada a semi truck clipped us, and our car rolled over numerous times as the Pontiac careened into a ditch. No seatbelts; my little sister, still a baby, loose in the car. To this day I remember seeing my entire family bouncing from roof to seat again and again, while all the windows in the car were blown out in the rollover. Yet no one was ejected through the openings and in some sort of miracle, not one of us was seriously hurt.

When something like that happens to you as a child, you don't have any problem with people promoting better safety in automobiles.

Let the Government Spend Your Money Wisely?

Today the automobile industry seems again to be a punching bag, this time for elected officials - a sure vote-getter if they can tarnish the industry's reputation. And it is remarkable that the same politician who professes to be totally against government spending on our auto industry is typically a huge supporter of defense spending, particularly on production of military materiel. But in reality, both involve the same thing: creating or keeping manufacturing jobs in America. The only difference is the justification.

The most recent Romney ad focuses on this administration's use of "stimulus" spending for government backed loans to vehicle start-ups such as Fisker Automotive (or Tesla Motors) and other "green energy" programs. Again, I don't take any of this seriously, it's just campaign season and rhetoric is to be expected. But it's also an example of how nothing really changes in terms of the government supporting things that maybe they shouldn't. And both parties do it.

Back in 1993, then Vice President Al Gore came up with his Partnership for a New Generation of Vehicles. Paid for with "government" funds, it would have had GM, Ford and Chrysler creating a vehicle capable of delivering 80 miles per gallon. What perfect timing: Just as Gore's $250 million program was announced, University of California Davis Professor Andrew Frank and his small group of graduate students finished rebuilding a Ford Taurus that actually got 80 miles per gallon. As I recall, Professor Frank's project was completed for under $30,000.

For what it is worth, Frank is considered the father of the modern plug-in hybrid electric vehicle for his groundbreaking research. Ironically, when I interviewed him in 1994, he told me that the Ford Motor Company was one of his sponsors for that hybrid car - the one that hadn't honored its financial commitment.

Lots of Blame to Go Around

Keep in mind that Frank's 80-mpg Ford Taurus was already finished and about to tour California just as the government announced a $250 million program meant to create just such a vehicle. What a waste. And before President George W. Bush canceled that program in 2002, it had gone way over budget, spending $1.5 billion in "government" money - and all we had to show for it was, well, nothing. Sure, Toyota came up with its exceptional Prius hybrid electric in that period, but our government put no funds into that; President Bush was adamant that Mr. Gore's plan had been a waste of taxpayers' money.

That's the funny thing about Washington. Because that promised $250 million in advanced automotive technologies, which in fact became $1.5 billion before it was over, was chicken feed compared to what happened next.

On reading the story about Mr. Romney's new ad campaign targeting government waste on advanced technologies, including automobiles, I went to the George W. Bush White House archives and found the "Energy for America's Future" page. Quoting directly from it, "Since President Bush took office, the Federal Government has invested more than $44 billion for climate change and energy security programs, including more than $22 billion for technology research, development and demonstration."

But it goes on, "President Bush signed laws giving the Department of Energy the authority to provide more than $67 billion in loans and guarantees to help support innovative energy projects to reduce greenhouse gas emissions and air pollution and to retool auto plants to produce more efficient vehicles."

In fact, this part is where Fisker applied for government backed loans to build their vehicles - and their loan application came during President Bush's administration.

But Bush's Archived Energy page continues:

"$1 billion for advanced work on cellulosic ethanol made from switchgrass, wood chips and other non-food sources. $1.2 billion for hydrogen research and development to help bring hydrogen fuel cell vehicles to market. The Renewable Fuels Mandate which will require five times as much renewable fuel as the previous law [emphasis added -- Ed], and the use of 36 billion gallons of ethanol by 2025. The Vehicle Fuel Economy Mandate to increase fuel economy of vehicles by 40 percent."

And then came the flat statement that these mandated "requirements will contribute to reducing our dependence on foreign oil from 58.2 percent in 2007 to 54.8 percent in 2018." - So much for getting off foreign oil.

Taken all together, one can easily reach the conclusion that President Bush easily spent more money on pushing the future of energy-efficient automobiles than Al Gore had as Vice President. But as a point of order, we still don't have an 80-mpg automobile, or even a hydrogen fuel celled car for the mass market today. We've got so much ethanol on hand that we were forced to raise the legal limit for its use in automobiles from 10 to 15 percent. And the dream of cellulosic ethanol is as far away today as it was when the process was discovered then funded by General Motors in the mid-1920s.

Sadly, many of the issues brought up in Romney's new ad were programs put in place by Bush, not Obama. The former president's White House archive page is public proof.

Do-It-Yourself Still Works Best

There was a time when automakers paid for all of their own research. Ford spent a fortune on ethanol work in the 20s, as GM spent a small fortune trying to bring down the price of cellulosic ethanol in the same period - before creating leaded gas to improve its vehicles' mileage and horsepower. At this point it would be good to remind everyone that the incredible increase in fuel efficiency in the past 18 months came from the automakers, not "the government's" help.

And therein lies the most ironic secret of all. The automobile companies already spend billions of their own dollars every year trying to create a better, cleaner, less oil-dependent future, and their do-it-yourself programs seem to deliver the best results. If our representatives kept up with the news, they'd know that.

Car quality, safety, fuel efficiency and so on have made incredible advances in the past decade. So it's just not right to scapegoat this industry for political points. Unlike the 1990s, it's almost impossible to find bad or mediocre automotive products today. But the biggest lesson here is that no matter who wins the next election, few things change in how the government views the auto industry. They talk about all of the taxpayer money their predecessors wasted, and then raise the stakes themselves.

© Ed Wallace 2012

Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, given by the Anderson School of Business at UCLA, and is a member of the American Historical Association. He hosts the top-rated talk show, Wheels, 8 a.m. to 1p.m. Saturdays on 570 KLIF AM. E-mail: [email protected], and read all of Ed's work at www.insideautomotive.com.
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