November 15, 2006

Three domestic automakers meet with George W. Bush

Washington, D.C. – The CEOs of the three domestic automakers met with President George W. Bush yesterday. Tom LaSorda of Chrysler Group, Alan Mulally of Ford and Rick Wagoner of General Motors met with the president to discuss issues related to the auto industry, and to overall American manufacturing competitiveness.

According to a statement issued jointly by the three automakers, discussions included energy security, the affordability and quality of health care, the trade imbalance caused by an artificially weak yen, and the rising cost of vehicle production materials. The statement included the following points:

On energy: The automakers support the government’s call for continued development and use of renewable fuels to lessen America’s dependence on imported oil. The CEOs said they are willing to do their part to increase the use of renewable fuels, and stand ready to make half of their annual vehicle production E85 fuel-flexible or capable of running on biodiesel by 2012. Any vehicle production increase must be accompanied by continuing incentives that encourage the manufacture, distribution and availability of renewable fuels and the production of flexible-fuel vehicles.

On manufacturing competitiveness: The automakers said that their three companies are the source, directly or indirectly, of over seven million U.S. jobs, and that they have invested over US$38 billion in the U.S. in the last four years. According to the statement, “However, the economic benefits and the well-paying jobs our industry and nearly all manufacturing provide are declining in part because the competitive playing field is not level. Some of our principal foreign competitors benefit immensely from national control and subsidization of health care costs in their home countries, and from fiscal and trade policies which keep local currencies weak and make import of U.S. products difficult.”

On currency: The automakers stated that, this year, Japanese vehicle imports into the U.S. will reach 2.3 million, further exploited by the artificial weakness of the yen. The automakers asked the President to take action to address the weak yen, as “we are very willing to make difficult decisions to transform our businesses to compete successfully, but we are not in a position to counter the effects of an excessively weak yen.”

On production costs: The automakers discussed the rising cost of production materials such as domestic steel, which is currently protected from competition. In the face of higher costs for steel and supply disruptions, the automakers asked that the administration recognize that continued protection of steel from competition is harming U.S. manufacturing and is no longer needed.

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