US Bill To Stimulate Car Sales Prompts Free-Trade Concerns
18 März 2009 - 10:05PM
Dow Jones News
U.S. House Speaker Nancy Pelosi favors the idea of a program to
stimulate car sales through consumer vouchers, her spokesman said,
appearing to boost the chances of a bill being pushed heavily by
Detroit auto makers.
But the bill has already come under fire from free-trade
advocates and some foreign auto makers who criticize a provision
precluding vouchers from going toward cars built overseas.
The bill, introduced Tuesday by Rep. Betty Sutton, D-Ohio, would
provide on-the-spot vouchers between $3,000 to $7,500 to consumers
who trade in older vehicles for new, more fuel-efficient cars and
trucks. The size of the vouchers would vary, depending on the fuel
economy of the car being purchased.
The older vehicles, required to have been built at least eight
years ago, would be scrapped and their parts recycled, while the
new vehicles would have to meet a certain fuel economy standard -
27 mpg on highways for cars, 24 mpg for light trucks, Sutton said.
Consumers could also opt to receive a $3,000 voucher toward
mass-transit fares.
Sutton said the intent is to stimulate slumping auto sales while
also reducing car pollution.
Auto-industry allies unsuccessfully pushed for a similar
program, dubbed "cash for clunkers," to be included in the recently
enacted economic stimulus plan. But supporters hope that the recent
success of a program in Germany - which they say boosted February
car sales in that country by double digits - will give the idea
added momentum.
"The speaker is supportive of this concept and looks forward to
reviewing the details of Rep. Sutton's legislation," Drew Hammill,
a spokesman for Pelosi, D-Calif., said in an email.
But Sutton's bill - strongly pushed by Ford Motor Co. (F) and
backed by the United Auto Workers - would preclude vouchers from
being used on some of the most fuel-efficient cars and trucks,
including the Toyota (TM) Prius.
The vouchers would also be limited to cars assembled in North
America. "I do not think there should be an expectation of American
taxpayers (that) we have to use our tax dollars to incent Americans
to buy foreign automobiles," said Rep. Candice Miller, R-Mich., a
co-sponsor of the Sutton bill.
At least two foreign-based auto makers, Toyota Motor Corp. and
Mazda Motor Corp. (7261.TO), have raised concerns about the
bill.
Barbara Nocera, Mazda's director of government and public
affairs, said the bill violates WTO and Nafta agreements.
"American auto dealers who sell imported international brands,
their American employees, and the American communities that benefit
from their taxes would be unfairly disadvantaged under the Sutton
bill," Nocera said in a statement.
A Toyota spokeswoman said Toyota officials share those
free-trade concerns.
"We'd prefer a fleet-modernization program that fairly treats
all manufacturers," the Alliance of Automobile Manufacturers, which
represents both U.S. and foreign auto makers, said in a statement.
"When it comes to getting cleaner, more fuel-efficient vehicles off
showroom floors and onto the roads, as an alliance, we believe that
a program that equally applies to all manufacturers does the most
good toward stimulating vehicle sales."
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637;
joshua.mitchell@dowjones.com