Dec. 9, 2008

Congress Must Force Big Three Automakers to Deliver Safer, More Fuel-Efficient Vehicles to a Demanding Public

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

WASHINGTON, D.C. – Before American taxpayers once again come to the rescue of the U.S. auto industry, Congress must require the industry to make vehicles that are more fuel-efficient, environmentally friendly and safer – products the public both wants and needs, Public Citizen President Joan Claybrook told a House committee today.

Americans expect a return on their investment, which can be achieved only by fundamentally changing the way the Big Three automakers do business, Claybrook told the House Select Committee on Energy Independence and Global Warming.

“It makes no sense to simply pump cash into a failed business model,” said Claybrook, who served as administrator of the National Highway Traffic Safety Administration (NHTSA) from 1977 to 1981. “The financial problems facing domestic manufacturers are largely a result of their failure to adapt to a changing market, risky reliance on gas-guzzling vehicles and lack of investment in innovative safety, fuel economy and emissions technologies until literally forced to do so by regulation or lack of sales.”

Claybrook urged lawmakers to adopt consumer safeguards as part of any bailout package, including strict accountability through an appointed oversight board led by a “car czar,” equity stakes for the federal government, government membership on the company boards, limits on executive pay and bonuses, and a ban on using taxpayer money for lobbying or campaign contributions.

While it is clear that the U.S. auto industry is in distress – and its failure would send tremors through the economy – the crisis provides Congress an opportunity to exert pressure on automakers to achieve greater fuel economy than currently required under federal law, Claybrook said. They also should not use the crisis as an excuse to roll back safety improvements. Automakers should support new safety standards including strong rollover roof crush and ejection standards to address the thousands of deaths each year in rollover crashes.

As part of the bailout, automakers also should be required to suspend litigation blocking California and other states from setting greenhouse gas emissions standards. This would further encourage the industry to produce cleaner vehicles.

Because of the auto industry’s history of breaking promises to deliver more fuel-efficient and safer vehicles, Congress must write these consumer safeguards into law or make them part of the loan conditions, Claybrook said.

“The auto industry must show American taxpayers that it has a plan to make the best use of this money and regain a prominent position in the global automobile market,” Claybrook said. “If the industry is willing under new leadrship to dramatically change how it will operate in the future, then it might just be salvageable.”

READ Claybrook’s testimony.

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