tv [untitled] CSPAN June 8, 2009 8:30am-9:00am EDT
877-on c-span. >> "washington journal" continues. host: dave mccurdy is president and ceo of the alliance for automobile manufacturers. the story is about the chrysler bankruptcy that the detroit free press -- one last hurdle. what can you tell us about what these dealers are trying to do? the appeal to the supreme court, correct? >> guest: the pension funds in indiana that is gone to the supreme court, that is, of the bankruptcy decision. the dealers and general motors has had, there was a hearing last week in the senate that dealt with some of the impending closure, restructuring of the dealer network. so there are two separate issues. the senate approach? host: yes. guest: obviously dealers are a
vital and important part of the industry. part of the family. it is really difficult seeing some of these choices that particular chrysler and gm are going to have to make, with their restructuring through the bankruptcy process. but i think at the end of the day the networks will be stronger. i think both companies will be stronger. host: hobby thing gm and chrysler responded to the concerns of the dealers, the concerns over inventory, been left with machinery that they are responsible for? guest: it is clear that and both of restructurings that the manufacturing has very tough decisions. and all stakeholders i think are participating in that plan. it is what they negotiated with the negotiation and i think that is what they went into bankruptcy protection for, is to be about to come out.
as far as the individual relationships, that is something of think the companies have to manage. in many respects into yoga has become the model and the standard for a number of things. i think the dealer network is one that both gm and ford and also chrysler and other companies are looking at what type of service. host: as with all major manufacturers, domestic and foreign, when you look down the road at the future of what automobile sales look like, not only models but what you see as a head for the american car buying public. a lot of great choices. this is an important industry, 4% of the u.s. gdp. what we see today is historic low. with the credit crunch and the financial crisis that occurred in this recession, it hit the
auto section particularly hard. when you have home prices be valued as much as they had over the past two years, that really had an impact on the auto sector because that is the second- largest purchase america makes. sales have dropped from historic highs of 17 million up to 16 million units a year up to 9.5 million right now. so i think we are seen the bottom and i think it is counting back. all the companies and gone through this. we are going to see a technology revolution occur. it is not just in electrification and hybrids, but you see it in advance the seoul and other kinds of technology and engines themselves, internal combustion engine. host: what sort of data it does your organization have in terms of what customers might be looking for one to are able to, once the economy bounces back,
and how much pent-up demand is there for automobiles not be satisfied now or not being able to be satisfied because of the economy? guest: i think a couple of things occurring. one is recovery from recession appeared at think there is going to be pent-up demand. but we need to prime the pump and i think congress is looking now to provide incentives for consumers. there is a bill that will be taken up in the house today, later tonight, called a fleet modernization. more widely known as cash for clunkers. nearly $4 billion incentive program that passed the committee-wide margins. host: what would it do? guest: incentive up to $4,500 for the vouchers for turning in older, less fuel-efficient vehicles. less than 18 miles a gallon -- for new vehicles, but certainly safer and cleaner.
they will be a big incentives for people to come back to the market. 45 host: hundred on top of anything? on top of what you make it trade and? guest: on the clunker's part, if it is an older vehicle, the value of the vehicle would be turned into. but there are also other incentives that manufacturers are providing for new buyers. again, the choices are incredible right now. host: dave mccurdy here until 9:30 a.m. eastern. caller: thank you critic michael. two questions, i want to know with all of the closings of factories and plants, are the parts going to come from china now to the united states at a
cheaper price? host: plant-closing is, of the cars coming from china at a cheaper price? guest: the chinese are obviously trying to enter the market. but with a restructuring of the industry, i think you will see wider options and different models. general motors will focus on four core brands. ford introduced a new taurus and others. all international brands are providing credible value for their vehicles. the chinese have yet to officially enter the market, but hummer, sold by general motors, is going to, if approved, by a chinese firm, but that is not where most people see the value in the long term. host: what do you know about the chinese from? guest: not much other event it is in the session one province
and it is a big manufacturer. they are entering the market from the upper end as opposed to those coming from smaller vehicles. there will be out placement of some vehicles. fiat, providing smaller, more efficient vehicles from the european side. so i think you will see a lot of different, small, fuel-efficient vehicles in the market. but they will make them in the u.s. as well. host: it your asks us, hummers are used by the military, but is it a good idea to sell to china? but the military are not made -- guest: when i was in the armed services committee would dealt with those issues. but that is separate. gm just have the rights to the brand. host: the commercial. guest: the h1, the version of the military one, is even
discontinued. texas host:, good morning for dave mccurdy. caller: i was self-employed and at the time was unemployed, i tried to deal with chrysler finance to get them to go down on my payments, adjusted just them a little bit more so they can afford to make the payments. why should i want to give the money to chrysler, chevrolet, everybody else, and chrysler is going up on the cars, you need more money to put a downpayment on the cars. i am for the u.s. cars, white will i help them when they don't want help me? -- why should i help them when they don't want to help me? chrysler and other companies treating people getting unemployed and laid off? host:, prepaying, what kind of car? caller: to about six during go,
and i pay $735 a month -- 2006 durango. guest: chrysler and gm were challenged with their financing arm for a while but now they have gmac that controls both of those, and that is something obviously consumers have to deal with. host: "the financial times" talks about chrysler investors try to foil the fiat deal. what is your take on the fiat deal? guest: fiat is popular in europe and has a lot of models there. also some cars that used to be in the u.s. market. they have not been in the market for a while, so the question is how long does it take for them to bring those vehicles into the u.s. market, what kinds of platforms it would be
introducing. but i think there is technology that chrysler believes it can benefit from. host: to chicago we go. been on the independent line. caller: americans need to learn much more about international automobile design and engineering. almost every country in europe is already presently deal -- building diesel cars that get over 80 miles a gallon and most americans are brainwashed about diesel. they know practically nothing about them. even here in america when clinton was the president, the united states government together but the american auto companies have a special program where they all developed diesel electric cars that get over 80 miles a gallon to 90 miles down and as soon as bush got in the whole thing was shoved under the rug. host: you talk a little bit about diesel a few months ago. guest: i'm a big fan of diesel.
the caller is correct that it is widely popular in europe, over 55 percent of the vehicles in europe are diesel, partly because of the technology but also government policy. diesel in europe is taxed nearly a dollar less and there is a large gas tax of nearly $4 a gallon. so wendy's still has a price differential, you see consumers respond. that is a fundamental point. host: is there any mission to issue? guest: it took a while to be able to meet the california standards, which is another issue that we have recently been addressing, but it is being introduced. i think there is a perception and the 1980's of american be so, which is not what diesel is today. completely different engines but both emissions are good but the performance and pork is there, combined with a hybrid variation, you could see tremendous improvements in -- efficiency.
host: on the issue of fuel standards, cafe standards, the president announced he was ramping up both the mileage and a timetable. what is your organization's view on the policy changes? caller: we went to the administration and encourage them to develop -- at the time we had three different voices on standards. we have traditionally the department transportation, that the industry's dealt with on cafe standards. the recent supreme court decision now introduced epa into tailpipe emissions. then you had third, california and 13 other states, that were introducing even a third set of standards. so it was important we harmonize, we actually approached the administration and said, look, let us go to the table work this out and they did. host: your organization was at the table?
guest: yes. we were, as individual companies, they worked very closely with the agencies in the state and pulled the stakeholders together, and shows with strong leadership you can bridge the differences. host: fort wayne, new jersey. good morning to richard. caller: for a lead, new jersey. thank you. it is fort lee, new jersey. i have a ford festiva, 1988, that a friend gave to me because he could not get anything on the trade in. so he gave it to me. and i have been driving it now for four or five years, and i get 49 miles to the gallon. that is a 1988 ford. i don't understand why there is such a difficult seem to have new cars get good mileage like i
get with an 1988. i would also like to ask very quickly, if there is a tie-in between the oil industry and automobile manufacturers, because i am very suspicious that mileage is tied into the oil companies. i appreciate your reply. thank you. guest: let me answer that second one first. absolutely night. no connection between the oil industry and the manufacturers. kind of one of the urban myths that has been out there for a long time. fuel and the technology of the vehicles are a system, so fuel is a component, but there is no concept -- control, and vice versa. as far as technology, fiesta was a small car, very fuel- efficient. ford is actually introducing a new european version that i think is going to be very popular in the u.s. so again, fuel economy is
important, and that is why we supported the increase and standards, both 2007 in congress and out of the administration, an average of 35.5 miles a gallon, which means passenger car standards will be even higher. there is technology available. it will be a real challenge, though, to get the entire fleet up to those averages because, again, consumers like choices. whether a small vehicle or a large vehicle, depending on their need. this combined average will help us get there. but i think there is, again, a lot of technology, both in the engine itself and different power trains. host: republican collar. gene from texas. caller: i am wondering if anybody is talking about this bankruptcy with chrysler and gm, flying in the face of over 100 years of bankruptcy law.
that the bondholders are ending up taking chaff, so this become and the unions are getting bailed out. i do not like the fact that my tax dollars are bailing out unions. hopefully the supreme court will go by the law, and i would like to know what this gentleman thinks of that. guest: thank you for the question beard -- for the question. again, the alliance represents manufacturers across the board -- japanese, u.s., and european. so we really have not dealt with the way government has dealt with the manufacturers. however, i would say that my understanding, and really looking at this industry in the two years i have been involved in it, unions have actually stepped up. there was a major renegotiation in 2007 that was taking u.s.-
based wages down to levels comparable to the transplants, toyota and other companies. that agreement was actually accelerated and i think they came to the table again. i think all the stakeholders have to come to the table. dealers, which we have seen recently debated, who are strong political force, unions, and bondholders. i don't know -- the bondholders i know have held out and at the end, with general motors, they got an improved position than they had going into the discussions. but the administration, looking at the options and choices, with nearly 10 percent unemployment in the united states. again, the largest manufacturing sector left in the united states. it was going through a major restructuring and reinventing when the financial crunch hit and it was the financial system that led to the recession, not the manufacturers. so they were caught there. will they survive? only time will tell.
but i think that u.s. models are world class today, both in quality and performance. no one will let 50 percent of the u.s. market the way general motors had back in the '50s, that will not happen. highly competitive, which is good for the consumer. i think ultimately the consumer will benefit but the united states will benefit, too, both with a revitalized domestic manufacturing base and also the new entrants -- the folks baden is building a brand-new plant in chattanooga, tennessee. -- the folks by then it is building a brand-new plant antennas -- volkswagen is building a brand-new plant. host: discussions over fuel economy, what sort of other role does the alliance have with current discussions on capitol hill regarding the auto industry? guest: we of the trade association of industry or
energy, environment, safety. safety is a critical component. so we work closely with congress and in a station on safety issues. and the innovation and trying to help consumers and others understand policy-makers, what new technology actually is coming to the market. host: is there a state in this country that does not have a piece of the industry, whether it is a parts plant or some other support plan? guest: the manufacturing sector -- used to be a number of the plants were in california and most of them have moved out, save one. and gm action will be closing that one coming out of that partnership. but the midwest and the south now is a major part of the manufacturing sector. the suppliers are a huge part of this. part of the concern about the domestic is that they share suppliers with both the japanese
and european manufacturers. if you saw a collapse there, it could have cascaded to other parts. so the other manufacturers, certainly concerned about the future viability. dealers are everywhere. they are in every congressional district in this country. so they are an important part of the economy and the economic -- community. yes, again, the auto makers and the auto industry is very much part of the fabric of the u.s.. host: st. augustine, florida. fred on the independent mind. caller: let me try to make a point and then a question -- the last republican collor will help me make the point of because he got his talking points straight off the fox news, that is all they have been saying. they just have the ticker running wild and hollering and screaming about rule in favor of --
host: what is your point? caller: my point is this, the way i understand it, most of the dealers, they all seem to donate, i think 10 to one to the republicans, and when are you guys going to wise up? the democrats are the ones supporting you. fox news live is making a cottage industry out of attacking you. the republicans hate the unions. they despise the unions. i have a brother who is a dealer and he has been a republican his life and he realized this and he went down and switched its registration just last week. host: fred, thank you for the call. do you want to respond? guest: as a former democratic congressman, i will not respond. host: allen on our democrats line. caller: i will try to go quickly. i had a few topics. i work in solar and in hawaii,
one of the states and the united states, along with the world, taking a look at a project and i think c-span discussing -- their plan is to do three things. build capacity -- parking lots and the home, and special statements that will remove batteries. there for the cars are cheap but the batteries cannot go with the cars, basically can leave the batteries a cheaper rate than gas. the most and portend thing is that it allows the industry, the vehicle industry to create basically gliders, as i heard them referred to in years past, vehicles and entities that would be marketing them will decide whether they use in fuel or
whether they use electrical. i have a friend that built electric vehicles, quite a few in hawaii, letters of intent with several years in detroit, but at that time that is when gm was rolling out of a ev1, and that was the problem because there was not enough funding. there is not enough venture capital unless we look at a method that makes the difficult cost-effective in a competitive marketplace. i am not sure i make sense -- but my question is how you guys feel about that. guest: a good point. actually a number of elements to his statement and question. that is, we are going to see electrification of vehicles over time and batteries are an important component of that. that is one of the biggest obstacles of really having widespread mass-market electric vehicles. the cost of batteries and actually durability of the
batteries. we have seen a transition from traditional lead-acid batteries and out lithium ion as part of the future, but the cost has been a major impediment. the federal government has stepped income over $2 billion -- stepped in, over $2 billion a stimulus bill. the caller is mentioning a better place which is -- i think there is a number of potential business models for electrification, but the important thing is that the infrastructure also has to be there. it is one thing for automakers to make electric vehicles, but seconds if the electrical infrastructure, the smart grid is not there, so that you can't plug it in at work or home, it undercuts getting widespread utilization. secondly, the cost has to come down, and the more it is produced, i think you will see
improvement in acceptance and uptake. right now the battery is, some of the popular well-known brands that are purely electric arc access of $100,000, and that is outside the reach of most consumers. but i think over time you will see a combination of hybrid and plug ins that will get down into the sub 30,000 mark range and i think it will be attractive. host: that caller mentioned venture capitalist and you mentioned $2 billion of federal money, but down the road with the financial industry going through a tough time as well, is it a difficult time to find those private industry dollars, those venture capitalists, to put money into battery research and whatever new technology? visit all going from the federal government? guest: research usually follows dollars. i think there has been from private sector, venture
capital, and governments, including steak owners -- michigan has invested a lot. a number of battery companies are into this. some companies have also had to come to the pro-government for additional help. one thing to go from the laboratory and a prototype to manufacturing and actually having a car that not only meets the rigor and requirements of being a wounded product -- because if you have one big mistake, then uh that really is a setback for the industry. so we are held to a different standard. host: is tesla part of your lines? guest: they are not -- but of the lake all companies to become many factors as they get to the stage. host: nathaniel on the republican line. caller: it points/questions or
would like to make. the first one, gm has been a staple in the united states as long as myself and my parents can remember, at least to be innovators. gm, chrysler, and ford used to be innovators and briars and the technology to the market. but for the past 20 years, we are no longer the innovators. we just put more icing on the cake. we just add more features but not new things. a lot of the new technologies are coming from overseas, being put into our industries. it is great and all, but if you or i had a company that produced the product for 20 years and never made it any better, just frosted it every five years, it would be bound that we would go out of business eventually. my second point is, why should gm and the people like you and i pay for their mistakes? guest: first of all, two parts to the question of innovation. innovation is not constrained to
the u.s. borders. this is a global industry. and all of these companies provide innovation. it may be more evolutionary and incremental that some people think, whether it is an area of safety -- which people are incredibly by order of magnitude are more safe than they have ever been. new technology brought to the marketplace every day. a lot of those innovations, though, are introduced through the higher and models first. so in many cases, yes, the luxury brands may be the first to introduce those, but they do make their way into the entire marketplace. so, i think domestics and international's bring an incredible amount of innovation to the marketplace. i am not here to represent general motors, but i think they made it very clear that, yes, there were mistakes made, however, if you look at the models they are offering an all of the domestics, i think they
will be incredibly competitive, and i think we will see some new popularity. host: you touched on this moments ago. can you speak about where state governments will come into play when it comes to giving tax extend the tax incentives to the auto industry? guest: a lot of states both from manufacturing standpoint, attracting industry, and you see some of the transplants going to a lot of states -- tennessee, alabama, and others. i know 200 that has a proposed plant in mississippi. also states like michigan and ohio are stepping up and working with the suppliers. again, looking at new technologies and innovation -- battery technology, there was an announcement recently that gm will build a battery facility in conjunction with a korean firm in michigan. another battery co. is investing in michigan. so states do
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