Automakers press energy agenda in Congress

WASHINGTON (Reuters) -- Chief executives of struggling Detroit-based automakers will press their energy and trade agendas in congressional meetings Wednesday, days before the Senate plans to take up proposed legislation to sharply hike fuel economy standards.

Rick Wagoner of General Motors Corp., (Charts, Fortune 500) Alan Mulally of Ford Motor Co (Charts, Fortune 500)., and Tom LaSorda of Chrysler Group of DaimlerChrysler (Charts) will meet with Democratic and Republican leaders as well as attend a Democratic-sponsored summit on the state of U.S. manufacturing.

Industry representatives and their allies on Capitol Hill contend their agenda will follow broad and well worn energy, trade and health care themes. But prominent environmental groups believe the chiefs will, in private meetings, push back hard against a leading proposal to sharply increase automobile fuel standards.

"The automakers have a long history of whining that they can't improve their products," said David Friedman, research director for the clean vehicles program at the Union of Concerned Scientists.

There is growing momentum on Capitol Hill to make Detroit and other auto manufacturers reach much higher mileage targets over the long term to cut gasoline use and reduce U.S. dependence on foreign oil.

The leading Senate proposal, approved by the Commerce Committee last month, would mandate a 4 percent annual increase in fuel economy beginning in 2011. The fleet of passenger cars and light trucks, including sport utilities and pickups, would have to average 35 miles per gallon by 2020. Such a target, say proponents, also would significantly cut carbon emissions.

Light trucks, the bread and butter of domestic manufacturers, must achieve 24 mpg by 2011 while the standard for sedans, compacts and wagons has remained unchanged at 27.5 mpg for 17 years.

The auto industry, through its trade group, has called the proposal unworkable because of potential cost and technological challenges.

GM, Ford, Chrysler and other companies are resigned to some type of fuel economy increase but they prefer regulators set the goal, believing the Transportation Department -- not Congress -- will better assess the impact of any change on their business.

GM's Wagoner will address energy issues on behalf of the automakers at the manufacturing summit.

"We believe that increased use of biofuels and advanced technology offer a better approach to reduce oil consumption and greenhouse gasses," said Greg Martin, a GM spokesman. "It's a message that we've delivered consistently every time that the three CEOs have come to Washington."

The United Auto Workers, which will be represented on Capitol Hill on Wednesday by its president, Ron Gettlefinger, also has warned that steep increases in fuel economy would lead to more job cuts and plant closings at U.S. companies.

Ford, GM and Chrysler are in the midst of painful restructurings in North America, closing plants and announcing plans to cut more than 80,000 jobs in response to plummeting market share and rising healthcare, pension and other legacy costs.

Joining Michigan lawmakers looking out the interests of Detroit automakers on fuel economy is House Republican leader John Boehner, from Ohio.

"None of these priorities can be achieved through government policies that strangle the private sector, destroy American jobs and eliminate consumer choice," Boehner said in a statement.