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Nov. 12, 2008

Turn the Auto Industry Bailout Into an Investment, Public Citizen Tells Congressional Leadership

In Exchange for Loans, Public Interest Should Be Detroit’s Top Priority

WASHINGTON, D.C. – An additional $25 billion in direct loans to the U.S. auto industry should come with requirements that put the public’s interest first, Public Citizen told House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid in a letter sent today.

A mandate that the auto industry achieve excellence in fuel economy and safety while minimizing environmental impact would proffer benefits to Detroit and consumers, thereby transforming a blank check bailout into a sensible investment in the future of American transportation, Public Citizen said. The organization recommended that automakers increase fuel economy across their fleets, so companies receiving additional loans should show they can achieve fleet fuel economy of 40 miles per gallon by 2020. It also called for automakers not to use their financial situation as an excuse to undercut basic crashworthiness technologies.

Public Citizen also encouraged Congress to enact the Reducing Global Warming Pollution from Vehicles Act of 2008 (S. 2555), a bill to enforce more stringent greenhouse gas emissions standards in California and 13 other states. This would further encourage the industry to produce cleaner vehicles. Finally, the government must adopt the more realistic calculations for fuel economy standards, the organization said.

“The financial problems facing domestic manufacturers are largely a result of their failure to adapt to a changing market and their risky reliance on gas-guzzling vehicles,” Joan Claybrook, president of Public Citizen, wrote. “Before the American taxpayers come again to the rescue, the industry should show American taxpayers that they have a plan to make the best use of this money to deliver fuel economy that consumers want and need and regain a prominent position in the global automobile market.”

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