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Obama talks tough on Detroit
date: May 14, 2008
SOURCE: Detroit Free Press
BY JUSTIN HYDE
WASHINGTON -- To hear Sen. Barack Obama tell it, his speech to the Detroit Economic Club last May pitching tougher fuel-economy standards was a Daniel-in-the-lion's-den moment, one that he has replayed for crowds from Oregon to North Carolina.
"I went to Detroit and told the automakers that they're going to have to raise fuel-efficiency standards on cars," the Democratic presidential front-runner told an Indianapolis audience earlier this month. "And I have to say that when I delivered that speech, nobody clapped. The room was really quiet. But that's OK, because that's part of what is the task of the next president."
Those refrains will echo today as Obama visits a Chrysler plant in Sterling Heights, his first foray into the suburban center of the auto industry. Such statements may have helped Obama convince voters of his political courage, but they have left many industry insiders wondering why he cast Detroit as a heavy.
And they create an opportunity for Arizona Sen. John McCain, a Republican who's running neck-and-neck with Obama in polling and fund-raising in Michigan.
McCain has criticized the industry in the past, but Obama "is going to have to show some understanding and sympathy about Michigan and the auto industry," said Bill Ballenger, editor of the Inside Michigan Politics newsletter. "It doesn't help him to go into the econ club and excoriate the industry as he did, and then go to other states and brag about it."
The Illinois senator's retelling of his story has a few flourishes. While Obama has repeatedly said "nobody clapped" and that his message was met with silence, the record from that speech from the Detroit Economic Club tells a different story. Obama won at least mild applause several times from the crowd of 2,000.
Context for the comments
When Obama gave his speech, the Senate was debating a fuel-economy increase that Detroit automakers opposed. After a version of bill passed in June, the automakers and the UAW backed a lesser increase in the House; the final energy bill -- signed by President George W. Bush and supported by Obama, N.Y. Democratic Sen. Hillary Clinton and McCain -- was a compromise forcing the industry to hit an average of 35 miles per gallon for all new vehicles by 2020.
Dave McCurdy, president of the Alliance of Automobile Manufacturers, the trade group that includes General Motors Corp., Ford Motor Co., Chrysler LLC and Toyota Motor Corp., said Monday that the industry had "taken a bit of a gasp" after federal regulators laid out last month how the new rules would go into effect.
But, he said, automakers were fully committed to meeting the goals.
"We have our hands full. We're going to do our darndest to meet it," McCurdy said during a conference of the Society of Automotive Engineers.
Not a favorite among insiders
Among the industry's executive ranks, which typically vote Republican, Obama appears to be the third-choice candidate. A March survey of 46 executives by law firm Dykema Gossett found that 70% backed McCain, with 57% saying an Obama administration would be bad for automakers.
Off the record, some say Obama has seemed condescending to the industry -- continuing to hit Detroit for lagging in fuel economy, long after the companies agreed to tougher rules. They point to his interview last week on "Meet the Press," in which he chided automakers for not spending more on fuel-saving technology before gas prices hit record highs.
"Now we're seeing a huge growth in fuel-efficient cars that is benefitting the Japanese automakers, and Detroit is getting pounded some more," Obama said.
McCain and Clinton offer little solace to insiders upset with Obama. All three have backed even tougher efficiency rules, and vowed to let California and other states set their own fuel-economy rules aimed at fighting global warming, something the industry vehemently opposes.
The difference may be more about tone than substance. Though McCain said manufacturing jobs have permanently left the state, he has also met with executives in Detroit, and talked up his economic plans for Michigan workers during the Republican primary. Clinton has visited several plants and offered praise for the UAW, which remains uncommitted.
Some support change
Obama campaign manager David Plouffe said today's visit would be the first of several to Michigan, calling the state a key battleground. He said he didn't expect voters to be upset over Obama's comments.
"This is a partnership with the auto industry, which is a critical component of our economy. We realize we need that industry to be as competitive as possible," he said.
According to the most recent federal reports, Obama has raised $1.59 million from Michiganders to McCain's $1.56 million. And in a presentation to superdelegates last month, Obama's campaign touted polls from nine battleground states -- and only in Michigan was Obama trailing McCain.
Obama does have supporters in the auto industry who say he was right to call for tougher standards.
Sanjeev Varma, a senior auto industry adviser for investment bank Duff & Phelps, canvassed for Obama in Ohio and has donated the maximum to his campaign. He said Obama's economic club speech, and his refusal to back a gasoline tax holiday, were examples of why Obama leads Clinton, and that some parts of the auto industry appreciate the need for more efficient vehicles.
Obama "does not believe in gimmicks. He's giving everyone straight-up information," Varma said. "He was very open and frank that the auto industry has to improve fuel economy. He was not pandering."
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