Big Three want help from Washington

John Dimsdale and Kai Ryssdal Nov 13, 2006

KAI RYSSDAL: Two earlier meetings Detroit had lined up with the President were cancelled. Once ’cause of Katrina, to be fair. But tomorrow’s session with the CEOs of Ford, GM and Chrysler isn’t a get-together the White House has been looking forward to. Maybe because there’s only so much the Administration can do. Our Washington bureau chief John Dimsdale’s been following the story. Hey John.

JOHN DIMSDALE: Happy Monday, Kai.

RYSSDAL: Happy Monday, John. . . . The President’s a busy man. Lots to do on his plate politically. Now he’s gonna meet with the car makers’ CEOs tomorrow. What are they hoping to get out of the White House?

DIMSDALE: Well, generally, they’re asking for help to lower their costs so that they can become more competitive with these foreign companies that are basically overtaking them in this country and around the world. So, they’re looking first at health care. That’s the biggest cost for American companies. They want the government to reduce some of those costs, especially for retirees, that adds $1,400 to the price of each car. They want cheaper steel — they’ll ask the President to lower tariffs on steel imports. They’ll be looking for a better currency rate with foreign competitors, especially the Japanese. And to help speed up the switch to alternative fuels, they want more government incentives to promote gasoline stations to carry ethanol.

RYSSDAL: Yeah, you know, speaking about fuel, John . . . I’m sure the President’s going to point out to the three men who are in that room with him that Detroit keeps making cars that are big and use a whole lot of gas and the competition is being small and efficient winning market share all over the place.

DIMSDALE: Absolutely. And we got some confirmation of that today from the Consumer Federation of America. They looked at the fuel economy rankings for all the car manufacturers and found that most have lower miles-per-gallon rankings than they did 10 years ago. And that shows the growing popularity of these pickup trucks and SUVs. But even with the demand for bigger cars, the best fuel-efficient rankings come from Japanese and Koren companies, according to the Consumer Federation’s Jack Gillis.

JACK GILLIS: The bottom line is they’ve used technology to provide more efficient vehicles, namely with hybrid technology, mainly with more-efficient engine designs. And the domestic manufacturers have really stayed behind and used older technology that just made the engines larger to get more power, rather than more efficient.

RYSSDAL: I’m sure you saw that piece on the front page of the Wall Street Journal today, John. That Toyota now has this four-year plan to build its market share at the expense of Detroit and become the world’s biggest car company. Why do you think it is that foreign car makers, specifically Asian car makers, just get it so much better than Detroit does.

DIMSDALE: They seem to be reading what customers want a little better. The Consumer Federation also released a poll today that shows Americans, while they want more fuel efficiency, they want it without sacrificing size or performance. The next time they buy a car it’s going to be just as big as the one they have now, but they want to have better fuel efficiency. And, Jack Gillis says that’s where Asian competitors really excel.

JACK GILLIS: It appears that the Japanese probably have their finger on the pulse of what the American consumer wants better than the domestic car companies.

RYSSDAL: Last thing, John, before we let you go. The President’s ability to deliver on any kind of promises that his is inclined to make today are far different than they were a week ago, huh?

DIMSDALE: Absolutely. I mean, the Democrats’ new strength will cut both ways for the car industry, though. There will be a stronger push for better fuel efficiency. But they’re also more inclined to favor what they call fair trade. Not free trade but fair trade. They want more restrictions on trade agreements to give domestic manufacturers some breathing room to cope with foreign competition.

RYSSDAL: Alright, Marketplace’s Washington bureau chief John Dimsdale. Thank you, John.

DIMSDALE: Thanks, Kai.

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